An Alabama workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Corporate officers and individual LLC members may elect to exclude themselves (§25-5-50; LLC members were added by Act 2017-390, effective August 1, 2017). Sole proprietors and partners are not covered automatically. They can choose to come under the Act (opt in) on Form WC14 Part I.
No ownership-percentage or officer-count limit was found in the sources. An officer or member who opts out still counts toward the 5-employee threshold. — while the law still requires coverage for employees once a business has 5 (Ala. Code §25-5-50(a): the Act does not apply to an employer that regularly employs fewer than 5 employees in any one business.
Full-time and part-time employees count, and so do corporate officers and LLC members.) or more. This guide explains who qualifies for the Alabama workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up. Verified against Alabama sources as of October 2026.
Alabama at a Glance
| Coverage required at | 5 (Ala. Code §25-5-50(a): the Act does not apply to an employer that regularly employs fewer than 5 employees in any one business. Full-time and part-time employees count, and so do corporate officers and LLC members.) employee(s) |
| Who may elect out | Corporate officers and individual LLC members may elect to exclude themselves (§25-5-50; LLC members were added by Act 2017-390, effective August 1, 2017). Sole proprietors and partners are not covered automatically. They can choose to come under the Act (opt in) on Form WC14 Part I. No ownership-percentage or officer-count limit was found in the sources. An officer or member who opts out still counts toward the 5-employee threshold. |
| Exemption form | Corporate Officer Exclusion, Form WC15 (also called the “Officer Exemption Notice”), for corporate officers and LLC members. Affidavit of Exemption, Form WC40, for residential-construction independent contractors with fewer than 5 employees. Form WC14 Part I is the opt-in form for sole proprietors and partners. |
| Filed with | WC15 goes to the employer’s workers’ comp insurance carrier. Since August 1, 2017 (Act 2017-390), it no longer has to be filed with the state. Form: https://labor.alabama.gov/wc/wc_corp_off_exmp_wc15.pdf. WC40 goes to the Alabama Department of Workforce, Workers’ Compensation Division. Only an original, notarized affidavit on a Division-issued form is accepted; copied or faxed pages are denied. It takes effect on the date the Division first receives it. Form: https://labor.alabama.gov/docs/forms/wc_form_40.pdf. Division phone: 1-800-528-5166 or 334-956-4044. |
| Penalty for being uninsured | Ala. Code §25-5-8(e). Failing to secure coverage when required is a misdemeanor with a fine of 100 to 1000. The employer is also liable for 2 times the compensation that would otherwise have been payable for the employee’s injury or death. The Secretary may also seek a court injunction, and the court may impose civil penalties of up to 100 per day. (Some private insurer websites say 1000 per day per employee. That figure does not match the statute text and was not used here.) |
In This Alabama Guide:
Who Qualifies for An Alabama Workers Comp Exemption
Corporate officers and individual LLC members may elect to exclude themselves (§25-5-50; LLC members were added by Act 2017-390, effective August 1, 2017). Sole proprietors and partners are not covered automatically. They can choose to come under the Act (opt in) on Form WC14 Part I. No ownership-percentage or officer-count limit was found in the sources. An officer or member who opts out still counts toward the 5-employee threshold.
Ala. Code §25-5-50. A corporate officer or individual LLC member may elect to be exempt by filing a written certification of that election with the employer’s insurance carrier. The election does not relieve the employer of coverage for its other eligible employees. It also does not change the officer’s status as an employee when counting toward the 5-employee threshold.
The exemption can be revoked at the end of any calendar year by filing a written certification with the carrier. A revocation at any other time also requires an affidavit stating the officer has had no employment accident, exposure, or injury since the exemption date.
LLC members follow the same election as corporate officers under §25-5-50 (Act 2017-390, effective August 1, 2017). Sole proprietors and partners are excluded by default and may elect coverage on Form WC14 Part I.
How to File the Alabama Workers Comp Exemption
The form is Corporate Officer Exclusion, Form WC15 (also called the “Officer Exemption Notice”), for corporate officers and LLC members. Affidavit of Exemption, Form WC40, for residential-construction independent contractors with fewer than 5 employees. Form WC14 Part I is the opt-in form for sole proprietors and partners.. It is filed with WC15 goes to the employer’s workers’ comp insurance carrier.
Since August 1, 2017 (Act 2017-390), it no longer has to be filed with the state. Form: https://labor.alabama.gov/wc/wc_corp_off_exmp_wc15.pdf. WC40 goes to the Alabama Department of Workforce, Workers’ Compensation Division. Only an original, notarized affidavit on a Division-issued form is accepted; copied or faxed pages are denied. It takes effect on the date the Division first receives it. Form: https://labor.alabama.gov/docs/forms/wc_form_40.pdf. Division phone: 1-800-528-5166 or 334-956-4044..
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.
Alabama Workers Comp Exemption Rules at a Glance
The exact Alabama workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 5 (Ala. Code §25-5-50(a): the Act does not apply to an employer that regularly employs fewer than 5 employees in any one business. Full-time and part-time employees count, and so do corporate officers and LLC members.) |
| Who may elect out | Corporate officers and individual LLC members may elect to exclude themselves (§25-5-50; LLC members were added by Act 2017-390, effective August 1, 2017). Sole proprietors and partners are not covered automatically. They can choose to come under the Act (opt in) on Form WC14 Part I. No ownership-percentage or officer-count limit was found in the sources. An officer or member who opts out still counts toward the 5-employee threshold. |
| Corporate officers | Ala. Code §25-5-50. A corporate officer or individual LLC member may elect to be exempt by filing a written certification of that election with the employer’s insurance carrier. The election does not relieve the employer of coverage for its other eligible employees. It also does not change the officer’s status as an employee when counting toward the 5-employee threshold. The exemption can be revoked at the end of any calendar year by filing a written certification with the carrier. A revocation at any other time also requires an affidavit stating the officer has had no employment accident, exposure, or injury since the exemption date. |
| LLC members and partners | LLC members follow the same election as corporate officers under §25-5-50 (Act 2017-390, effective August 1, 2017). Sole proprietors and partners are excluded by default and may elect coverage on Form WC14 Part I. |
| Form | Corporate Officer Exclusion, Form WC15 (also called the “Officer Exemption Notice”), for corporate officers and LLC members. Affidavit of Exemption, Form WC40, for residential-construction independent contractors with fewer than 5 employees. Form WC14 Part I is the opt-in form for sole proprietors and partners. |
| Where to file | WC15 goes to the employer’s workers’ comp insurance carrier. Since August 1, 2017 (Act 2017-390), it no longer has to be filed with the state. Form: https://labor.alabama.gov/wc/wc_corp_off_exmp_wc15.pdf. WC40 goes to the Alabama Department of Workforce, Workers’ Compensation Division. Only an original, notarized affidavit on a Division-issued form is accepted; copied or faxed pages are denied. It takes effect on the date the Division first receives it. Form: https://labor.alabama.gov/docs/forms/wc_form_40.pdf. Division phone: 1-800-528-5166 or 334-956-4044. |
What An Alabama Workers Comp Exemption Gives Up
An exempt owner who is hurt on the job in Alabama has no workers’ comp claim: no medical coverage from the policy, no wage replacement and no disability award. Health insurance may exclude work injuries. Most owners who physically work the job keep themselves covered for that reason.
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 an Alabama 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.
Workers Exempt by Law in Alabama
Separate from the owner’s election, Alabama 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.
📨 Get Free Workers Comp Guides Alerts
Free · No spam · Unsubscribe anytime
Proving An Alabama Workers Comp Exemption or Coverage
General contractors and clients in Alabama 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 Alabama Workers Comp Exemption Matters
The Alabama 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. Exempt officers and LLC members still count toward the 5-employee threshold. Since August 1, 2017, the officer/member exclusion is filed only with the insurer, not the state.
For residential construction, a WC40 is only accepted as an original, notarized affidavit on a Division-issued form, signed by all partners with their SSNs. A contractor with employees must have an active unemployment compensation number. Confirm details with the Workers’ Compensation Division and a licensed attorney.
If the Alabama 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 Alabama 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 Alabama?
Corporate officers and individual LLC members may elect to exclude themselves (§25-5-50; LLC members were added by Act 2017-390, effective August 1, 2017). Sole proprietors and partners are not covered automatically. They can choose to come under the Act (opt in) on Form WC14 Part I. No ownership-percentage or officer-count limit was found in the sources. An officer or member who opts out still counts toward the 5-employee threshold.
What form is the Alabama workers comp exemption?
Corporate Officer Exclusion, Form WC15 (also called the “Officer Exemption Notice”), for corporate officers and LLC members. Affidavit of Exemption, Form WC40, for residential-construction independent contractors with fewer than 5 employees. Form WC14 Part I is the opt-in form for sole proprietors and partners.. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in Alabama 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 Alabama Sources & Resources
- Alabama Alabama Department of Workforce, Workers’ Compensation Division (formerly the Alabama Department of Labor and, before that, the Department of Industrial Relations): https://workforce.alabama.gov/employers/workers-compensation/insurance-compliance/
- Alabama Workers’ Comp Statute: https://alison.legislature.state.al.us/code-of-alabama (Ala. Code §25-5-50; a mirror of the full text is at https://law.justia.com/codes/alabama/title-25/chapter-5/article-3/section-25-5-50/)
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This Alabama workers comp exemption guide was last verified against official Alabama sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
You May Also Like
More Alabama Workers’ Comp Guides
- How to File an Alabama Workers’ Comp Claim
- Alabama Workers’ Comp Settlements
- Alabama Workers’ Comp Requirements (Employers)
- Workers’ Comp Guides for All 50 States
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.