A Washington workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Under RCW 51.12.020, Washington leaves certain owners out of mandatory coverage automatically. They are not covered unless they choose to be.
This group includes sole proprietors and partners (RCW 51.12.020(5)); LLC members who qualify like a sole proprietor or partner (member-managed LLC) or like a corporate officer (manager-managed LLC); and qualifying corporate officers. For a non-public corporation, that means up to 8 bona fide officers who are shareholders, or any number of officers if all of them are related by blood within the third degree or by marriage.
For a public corporation, officers qualify if they have substantial control over daily management and do no manual labor. Owners who want coverage can opt in through elective coverage. Confirm with L&I and a licensed attorney. — while the law still requires coverage for employees once a business has 1 or more.
This guide explains who qualifies for the Washington workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up. Verified against Washington sources as of October 2026.
Washington at a Glance
| Coverage required at | 1 employee(s) |
| Who may elect out | Under RCW 51.12.020, Washington leaves certain owners out of mandatory coverage automatically. They are not covered unless they choose to be. This group includes sole proprietors and partners (RCW 51.12.020(5)); LLC members who qualify like a sole proprietor or partner (member-managed LLC) or like a corporate officer (manager-managed LLC); and qualifying corporate officers. For a non-public corporation, that means up to 8 bona fide officers who are shareholders, or any number of officers if all of them are related by blood within the third degree or by marriage. For a public corporation, officers qualify if they have substantial control over daily management and do no manual labor. Owners who want coverage can opt in through elective coverage. Confirm with L&I and a licensed attorney. |
| Filed with | Washington State Department of Labor & Industries (L&I), Employer Services. Owners and officers are listed when the business registers through the Business Licensing Service (dor.wa.gov) and on the L&I account. Forms: https://lni.wa.gov/forms-publications/F213-042-000.pdf and https://www.lni.wa.gov/go/F213-112-000 |
| Filing fee | Free |
| Renewal | The statutory exclusion does not expire or need renewal. It lasts as long as the owner or officer keeps qualifying. Elective coverage stays in place until cancelled in writing. For corporations, LLCs using the corporate model, and elective coverage of excluded workers, cancellation takes effect 30 days after L&I receives the written request. |
In This Washington Guide:
Who Qualifies for A Washington Workers Comp Exemption
Under RCW 51.12.020, Washington leaves certain owners out of mandatory coverage automatically. They are not covered unless they choose to be. This group includes sole proprietors and partners (RCW 51.12.020(5)); LLC members who qualify like a sole proprietor or partner (member-managed LLC) or like a corporate officer (manager-managed LLC); and qualifying corporate officers.
For a non-public corporation, that means up to 8 bona fide officers who are shareholders, or any number of officers if all of them are related by blood within the third degree or by marriage. For a public corporation, officers qualify if they have substantial control over daily management and do no manual labor. Owners who want coverage can opt in through elective coverage.
Confirm with L&I and a licensed attorney.
RCW 51.12.020(8). Public companies: a bona fide officer who is voluntarily elected or appointed under the articles or bylaws, is also a director and shareholder, has substantial control over daily management, and whose main duties are not manual labor is excluded.
Non-public corporations (as defined in RCW 23B.01.400): the company may exempt 8 or fewer bona fide officers who are voluntarily elected or appointed, have substantial control over daily management, and are shareholders, even if they do manual labor. It may exempt any number of officers if all of them are related by blood within the third degree or by marriage. Family-corporation officers do not have to be shareholders or directors.
L&I says that if a non-public corporation has more than 8 officers, the officers over 8 must be identified and reported (covered).
Sole proprietors and partners are excluded from mandatory coverage (RCW 51.12.020(5)). LLC members are exempt if (a) the members manage the LLC and the members seeking exemption would qualify as sole proprietors or partners, or (b) managers run the LLC and the members seeking exemption are managers who would qualify as corporate officers under RCW 51.12.020(8). Any of these owners can choose coverage on form F213-042-000.
How to File the Washington Workers Comp Exemption
Washington does not use a separate state form; the election is made with the insurer on the policy. It is filed with Washington State Department of Labor & Industries (L&I), Employer Services. Owners and officers are listed when the business registers through the Business Licensing Service (dor.wa.gov) and on the L&I account. Forms: https://lni.wa.gov/forms-publications/F213-042-000.pdf and https://www.lni.wa.gov/go/F213-112-000. Filing is free. Renewal: The statutory exclusion does not expire or need renewal.
It lasts as long as the owner or officer keeps qualifying. Elective coverage stays in place until cancelled in writing. For corporations, LLCs using the corporate model, and elective coverage of excluded workers, cancellation takes effect 30 days after L&I receives the written request..
Filing on the state’s own site costs nothing beyond any statutory fee — the “exemption filing services” that advertise on this search charge for the same form.
Washington Workers Comp Exemption Rules at a Glance
The exact Washington workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 1 |
| Who may elect out | Under RCW 51.12.020, Washington leaves certain owners out of mandatory coverage automatically. They are not covered unless they choose to be. This group includes sole proprietors and partners (RCW 51.12.020(5)); LLC members who qualify like a sole proprietor or partner (member-managed LLC) or like a corporate officer (manager-managed LLC); and qualifying corporate officers. For a non-public corporation, that means up to 8 bona fide officers who are shareholders, or any number of officers if all of them are related by blood within the third degree or by marriage. For a public corporation, officers qualify if they have substantial control over daily management and do no manual labor. Owners who want coverage can opt in through elective coverage. Confirm with L&I and a licensed attorney. |
| Corporate officers | RCW 51.12.020(8). Public companies: a bona fide officer who is voluntarily elected or appointed under the articles or bylaws, is also a director and shareholder, has substantial control over daily management, and whose main duties are not manual labor is excluded. Non-public corporations (as defined in RCW 23B.01.400): the company may exempt 8 or fewer bona fide officers who are voluntarily elected or appointed, have substantial control over daily management, and are shareholders, even if they do manual labor. It may exempt any number of officers if all of them are related by blood within the third degree or by marriage. Family-corporation officers do not have to be shareholders or directors. L&I says that if a non-public corporation has more than 8 officers, the officers over 8 must be identified and reported (covered). |
| LLC members and partners | Sole proprietors and partners are excluded from mandatory coverage (RCW 51.12.020(5)). LLC members are exempt if (a) the members manage the LLC and the members seeking exemption would qualify as sole proprietors or partners, or (b) managers run the LLC and the members seeking exemption are managers who would qualify as corporate officers under RCW 51.12.020(8). Any of these owners can choose coverage on form F213-042-000. |
| Where to file | Washington State Department of Labor & Industries (L&I), Employer Services. Owners and officers are listed when the business registers through the Business Licensing Service (dor.wa.gov) and on the L&I account. Forms: https://lni.wa.gov/forms-publications/F213-042-000.pdf and https://www.lni.wa.gov/go/F213-112-000 |
| Fee | Free |
| Renewal | The statutory exclusion does not expire or need renewal. It lasts as long as the owner or officer keeps qualifying. Elective coverage stays in place until cancelled in writing. For corporations, LLCs using the corporate model, and elective coverage of excluded workers, cancellation takes effect 30 days after L&I receives the written request. |
What A Washington Workers Comp Exemption Gives Up
An excluded owner or officer gets no Washington industrial insurance benefits if injured on the job: no time-loss pay, no medical coverage through L&I, no pension. Elective coverage is the only way to get them. The exclusion does not change the employer’s immunity from lawsuits by covered employees (RCW 51.04.010, 51.32.010). Confirm with L&I and a licensed attorney.
One honest paragraph on the “ghost policy”: a minimum-premium policy with no employees sold to owners who need a certificate of insurance. It is legal in many states, but it is not a Washington workers comp exemption — it is coverage with nobody on it. If you add a worker, it must be reported, or the audit will find them.
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Workers Exempt by Law in Washington
Separate from the owner’s election, Washington law exempts some classes of workers from coverage — commonly domestic workers below a threshold, casual labor, some farm labor and licensed real-estate agents paid by commission. A worker who does not fit a listed class counts toward the threshold, no matter what the 1099 says.
Proving A Washington Workers Comp Exemption or Coverage
General contractors and clients in Washington ask for proof before work starts: a certificate of insurance for covered employers, or the filed exemption certificate for exempt owners. Many states also run a public coverage-verification lookup on the agency site.
Why the Washington Workers Comp Exemption Matters
The Washington workers comp exemption is a trade: lower cost today against no safety net if you are hurt. The second half of the trade is the one the search results never lead with. Washington is one of four monopolistic states. Coverage must come from the State Fund through L&I or from L&I-approved self-insurance, and no private workers’ comp policies are sold.
Owners are excluded by default and opt in with F213-042-000, which is the reverse of most states, where owners file to opt out. Corporations that choose officer coverage must cover all officers doing the same type of work. L&I says “substance is more important than form” when deciding whether an officer qualifies. Penalty amounts are adjusted for inflation every 3 years, most recently on July 1, 2026.
Confirm with L&I and a licensed attorney. If the Washington workers comp exemption rules above leave any doubt about whether a worker counts, ask the state agency before you decide — the answer is free, and the penalty for guessing wrong is not.
Employer side: the Washington requirements guide covers the threshold, who counts and the penalties in full. Hurt while exempt? You may still have a claim against a third party — a licensed attorney can say.
Frequently Asked Questions
Who can file a workers comp exemption in Washington?
Under RCW 51.12.020, Washington leaves certain owners out of mandatory coverage automatically. They are not covered unless they choose to be. This group includes sole proprietors and partners (RCW 51.12.020(5)); LLC members who qualify like a sole proprietor or partner (member-managed LLC) or like a corporate officer (manager-managed LLC); and qualifying corporate officers.
For a non-public corporation, that means up to 8 bona fide officers who are shareholders, or any number of officers if all of them are related by blood within the third degree or by marriage. For a public corporation, officers qualify if they have substantial control over daily management and do no manual labor. Owners who want coverage can opt in through elective coverage.
Confirm with L&I and a licensed attorney.
What form is the Washington workers comp exemption?
The election is made on the policy or with the agency — see the table. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in Washington still collect benefits if hurt?
No. An exemption removes the owner from coverage, so there is no claim for medical care or lost wages. That is the trade.
Official Washington Sources & Resources
- Washington Washington State Department of Labor & Industries (L&I). Appeals go to the Board of Industrial Insurance Appeals.: https://www.lni.wa.gov/insurance/insurance-requirements/do-i-need-a-workers-comp-account/corporate-officers
- Washington Workers’ Comp Statute: https://app.leg.wa.gov/rcw/default.aspx?cite=51.12.020
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This Washington workers comp exemption guide was last verified against official Washington sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.