Pennsylvania Workers' Comp Exemption

Sole proprietors are not required to carry coverage on themselves. Under the Pennsylvania Workers' Compensation Act §301(a), coverage obligations run to "employees," and a sole proprietor working alone isn't an employee of anyone, so they're excluded from mandatory coverage by default with no opt-out filing needed. They can voluntarily opt in through a mechanism created by Act 20 of 2011 (effective August 29, 2011).

LLC members follow the same default-exclusion logic as sole proprietors, since member-owners aren't considered "employees" of the entity. Act 20 of 2011 lets them voluntarily opt in the same way. Some non-official sources claim construction-industry LLCs face a different or mandatory-coverage rule for members, but we could not confirm that against the statute or the Department of Labor & Industry directly — treat that specific claim as unverified.

Officers are covered by default and must affirmatively exclude themselves through an "Application for Executive Officer Exception." The rules differ by entity type, confirmed directly on Pennsylvania's own compliance page: nonprofit corporations may exclude officers who serve both voluntarily and without pay; Subchapter S corporations may exclude officers who have an ownership interest as defined under the state's Tax Reform Code of 1971 (no separate percentage is stated); and Subchapter C corporations may exclude officers with at least a 5% ownership interest — a real, citable figure. We found no cap on the number of officers who can be excluded; eligibility runs per officer based on ownership and pay status, not a headcount limit.

Two paired forms apply: LIBC-509, "Application for Executive Officer Exception," filed by the employer, and LIBC-513, "Executive Officer's Declaration," executed by each individual officer. These are filed with the employer's workers' comp insurance carrier, or directly with the Pennsylvania Bureau of Workers' Compensation if the employer has no other employees to insure. We could not verify a specific fee amount or renewal period from the sources checked — confirm current requirements directly with the Bureau or the LIBC-509/513 instructions before relying on either.

Pennsylvania's default runs opposite many states covered on this site: sole proprietors and LLC members are excluded by default and must opt in if they want coverage, while corporate officers are covered by default and must opt out. The Subchapter C officer exclusion's 5% ownership threshold is unusually specific compared to most states' vaguer "any officer" language, and nonprofit officers face a distinct requirement — they must be both unpaid and serving voluntarily to qualify.