Workers' compensation coverage requirement — applicability and exemptions
Oklahoma requires every employer to secure workers' compensation coverage under the Administrative Workers' Compensation Act (Title 85A) unless a statutory exemption applies. This coverage requirement is foundational to Oklahoma's workplace safety framework, as it ensures injured employees receive medical care and wage replacement while protecting compliant employers from civil liability for workplace injuries.
Universal coverage trigger
Under 85A O.S. § 3, every employer and every employee are subject to the Administrative Workers' Compensation Act and every employer must pay or provide benefits for accidental injury or death of an employee arising out of and in the course of employment, without regard to fault, if the employee's contract of employment was made or the injury occurred within Oklahoma. Unlike some states that tie the coverage mandate to a minimum employee count, Oklahoma imposes the requirement on employers with one or more employees — full-time or part-time — absent a specific statutory exclusion. The current version of the Act applies to injuries occurring on or after February 1, 2014, as established by the Administrative Workers' Compensation Act enacted in 2013 (Laws 2013, c. 208).
Statutory exclusions from the definition of "employee"
Title 85A § 2(18)(b) enumerates ten categories of workers excluded from the definition of "employee" and therefore not covered by the Act. These include:
- Casual workers whose employment is not in the course of the trade, business, profession, or occupation of the employer;
- Domestic servants and casual workers in and about a private home or household that had gross annual payroll in the preceding calendar year of less than $10,000;
- Agricultural and horticultural workers employed by an employer whose gross annual payroll in the preceding calendar year was less than $100,000;
- Real estate salespersons and brokers compensated solely by commission;
- Sole proprietors, partners, and members of LLCs who own at least 10% of the LLC's capital (though they may elect coverage);
- Direct sellers meeting specific statutory criteria;
- Licensed insurance agents compensated solely by commission;
- Owner-operators and drive-away owner-operators meeting criteria under subparagraphs (8) and (9) (unless they elect coverage as sole proprietors);
- Individuals convicted of a criminal offense or incarcerated who are required to perform work for a municipality, county, state, or federal government.
Employers who qualify for and claim an exemption must file an Affidavit of Exempt Status (CC-Form 36A) with the Oklahoma Workers' Compensation Commission. The affidavit costs $50, is valid for two years, and must state conspicuously that falsifying information on the form is a crime. If circumstances change such that coverage becomes required, the employer must execute and file a Cancellation of Affidavit of Exempt Status.
Penalties for failure to secure coverage
An employer required to secure compensation who fails to do so faces substantial penalties. Under 85A O.S. § 40, the Commissioner of Labor may assess a civil penalty of up to $1,000 per day for each day the employer fails to maintain coverage. After an employer is cited for two offenses of failing to obtain coverage, the Commissioner has authority to order cessation of business activities until insurance is procured. An employer who fails to secure coverage may also be charged with a misdemeanor and subjected to fines. Additionally, under 85A O.S. § 5(J), if an employer has failed to secure payment of compensation as provided in the Act, the injured employee or his or her legal representative may maintain an action in district court for damages on account of the injury — thus losing the exclusive-remedy immunity that the Act otherwise provides.
How employers secure compensation
Employers secure compensation in one of three ways: (1) purchasing workers' compensation insurance from a private carrier authorized to write coverage in Oklahoma; (2) obtaining approval from the Workers' Compensation Commission to be self-insured; or (3) joining a Commission-approved group self-insurance association. Under 85A O.S. § 38, the primary obligation to pay compensation rests on the employer, and procurement of insurance does not relieve the employer of that underlying obligation if the carrier fails to pay.
Source: 85A O.S. § 3 — Coverage and applicability Source: 85A O.S. § 2(18) — Definition of employee and exclusions Source: 85A O.S. § 40 — Failure to secure compensation penalties Source: 85A O.S. § 5(J) — Employer immunity and exception for failure to secure Source: 85A O.S. § 38 — Securing compensation