Virtually all employers in Alabama must provide workers' compensation insurance coverage for their employees (AL Code Sec. 25-5-1). Insurance is required for all nonconstruction employers that have five or more employees and for all construction employers of any size. Counties and municipalities with a population of more than 2,000 must be covered, but cities with a population of more than 250,000 need not be covered. A few categories of employment are specifically exempted from coverage:
- Domestic servants
- Farm laborers
- Licensed real estate agents operating under licensed brokers
- Independent contractors
- Casual employees
- Employees of municipalities with populations of less than 2,000
- Corporate officers
- Sole proprietors/partners, unless they file an election to follow the workers' compensation laws
Employers that are not obligated to provide coverage may elect to be covered under the Workers' Compensation Act, thereby gaining immunity from other legal actions. Employers that do not elect coverage must inform employees in writing of that fact and must post a notice in a conspicuous place advising all employees and applicants that workers' compensation is not provided.
"No-fault" system. Workers' compensation is a "no-fault" system. Under this system, it makes no difference who is to blame for the injury: The employee receives compensation as long as the injury arose "out of and in the course of employment." This no-fault aspect distinguishes workers' compensation from ordinary "tort" law, which provides for the compensation of injured people in most other circumstances. Under tort law, a person receives compensation only if the injury was caused by someone else's carelessness. The operative legal term ...