Understanding the Oklahoma Affidavit of Exempt Status for Contractors

What 85A O.S. § 36 Requires and Why It Matters

In Oklahoma, workers’ compensation coverage is mandatory for most employers. But the law also recognizes that not every working relationship fits neatly into the traditional employer employee model. That is where the Affidavit of Exempt Status comes in.

Filed with the Oklahoma Workers’ Compensation Commission, this Affidavit allows certain individuals to formally declare that they are exempt from coverage under the Administrative Workers’ Compensation Act, specifically 85A O.S. §36. On construction job sites, workers’ compensation responsibility is not determined by job titles or contract language alone. Oklahoma law looks at who is doing to the work, who controls it, and who is insured. That is why the Affidavit of Exempt Status matters and understanding what this Affidavit requires is critical to staying compliant and avoiding costly misunderstandings.

What Is an Affidavit of Exempt Status?

An Affidavit of Exempt Status is a sworn statement submitted to the Oklahoma Workers’ Compensation Commission asserting that an individual meets the statutory criteria to be excluded from workers’ compensation coverage. Once properly filed and approved, it serves as official documentation of that exemption. Affidavits are good for two years from the filing date and must be accompanied by a nonrefundable filing fee of $50.00 payable to the Oklahoma Workers’ Compensation Commission.

Affidavit of Exempt Status becomes especially important in prime and subcontractor relationships, where responsibility for workers’ compensation is often misunderstood. The statute sets out specific requirements that must be met and affirmed under oath.

Who May Claim Exempt Status Under 85A O.S. § 36?

Under the statute, exemption eligibility generally depends on both business structure and ownership or control. Individuals who may qualify include:

• Sole proprietors who own and operate their business
• Partners in a partnership
• Members of a limited liability company
• Corporate officers who meet statutory ownership or governance thresholds
• Independent contractors

Merely holding a title or issuing a 1099 to a subcontractor is not sufficient. The individual must satisfy the legal definition set out in the Act and affirm that status in the Affidavit. The Affidavit does not automatically turn an employee into an independent contractor and does not prevent a workers’ compensation claim if the facts show employee status. Oklahoma law considers an independent contractor to be one who engages to perform certain services for another, according to their own manner and method, free from control and direction of the prime contractor. The Commission will look to several factors in determining whether someone is an employee versus an independent contractor. Those factors include:

• The nature of the contract between the sub and the prime
• The amount of control the prime contractor exercises over the work
• The type of occupation and whether the sub has a distinct business the is separate from the prime and is not the regular business of the prime
• The type of project is typically performed by a specialist without supervision
• The occupation requires special skill, license, education, or training
• The prime does not provide the supplies necessary for the sub to perform the job
• The length and duration of the job such as a set time for the project to be performed
• Whether the sub invoices the prime contractor or paid and whether the sub pays for expenses and federal income taxes for their business
• The right of either party to terminate the relationship without penalty

When an individual subcontractor files an Affidavit of Exempt Status under 85A O.S. §36, they are formally declaring they are exempt from coverage as an individual. In practice, this means the exempt individual is acknowledging they qualify for an exemption and are choosing to work without workers’ compensation coverage for themselves only. In construction terms, this usually applies to one person trades operating as sole proprietors, owner operators of small subcontracting companies, and certain LLC members or corporate officers actively working on site. It is important to note the Affidavit applies only to the individual signor and does not extend to other workers unless they independently qualify.

The Affidavit does not apply to helpers, laborers, or crew members of the subcontractor and does not replace workers’ compensation insurance. This distinction is critical in subcontracting arrangements. If a subcontractor with an Affidavit hires workers who are not exempt and does not carry workers’ compensation insurance, a prime contractor may be held responsible for workers’ compensation for uninsured subcontractors and their employees.

Core Requirements of the Affidavit

A form Affidavit of Exempt Status is available from the Oklahoma Workers’ Compensation Commission and includes the following:

1. Identification of the Individual and Business
   • The Affidavit must clearly identify the individual claiming exemption and the business entity involved, including legal names and addresses.
2. Statement of Statutory Basis for Exemption
   • The Affidavit must specify the category under 85A O.S. §36 that supports the exemption.
3. Acknowledgment of No Coverage
   • The Affidavit must acknowledge that the individual is not entitled to workers’ compensation benefits.
4. Sworn Signature
   • The Affidavit must be signed under oath.
5. Filing With the Commission
   • The Affidavit is not effective until properly filed with the Oklahoma Workers’ Compensation Commission.

Important Limitations to Understand

Filing an Affidavit of Exempt Status does not exempt the business from covering nonexempt employees, does not automatically apply to future entities, and does not override factual employment relationships. For example, an Affidavit of Exempt Status is appropriate for a framing contractor that works on a project alone. However, that Affidavit of Exempt Status does not cover a helper that the framing contractor brings on site. An on-the-job injury sustained by the helper could still trigger a claim against the prime contractor.

Best Practices for Prime Contractors

On most construction projects, the prime contractor is the last line of defense if workers’ compensation coverage is missing. To reduce risk, prime contractors should obtain copies of all Affidavits of Exempt Status before work begins and confirm whether the subcontractor works alone. Prime contractors should also require proof of workers’ compensation insurance where additional workers are involved. The Prime should also periodically confirm that the exempt status as well as any policies of workers’ compensation insurance remain valid and effective. Prime contractors should also keep records available for audits or disputes. Relying solely on an Affidavit without understanding the underlying relationship can create a false sense of security.

Best Practices for Subcontractors

Subcontractors claiming exempt status should understand that the Affidavit is a personal waiver of workers’ compensation benefits and hiring workers may immediately trigger insurance obligations regardless of exempt status. They should also understand that medical bills and lost wages are their personal responsibility if they choose not to be protected by workers’ compensation coverage. Misclassification disputes can still arise despite a filed Affidavit and an Affidavit is not a blanket shield against coverage requirements.

Final Takeaway

In prime and subcontractor relationships, the Affidavit of Exempt Status is one piece of a larger compliance picture. It can clarify individual coverage status, but it does not eliminate statutory responsibilities or replace careful risk management. Prime contractors should treat Affidavits as documentation, not guarantees. Subcontractors should treat them as serious legal declarations with real consequences. Reach out to the experienced legal team at Davis Business Law, PLLC to clarify your business relationships to ensure proper compliance with workers’ compensation requirements in Oklahoma and avoid expensive mistakes.