2009 Kentucky Revised Statutes CHAPTER 342 WORKERS' COMPENSATION 342.012 Business owners -- Election to be included as employees -- Qualified partners and members and nonqualified partners and members defined.
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342.012 Business owners -- Election to be included as employees -- Qualified
partners and members and nonqualified partners and members defined.
(1) For the purposes of this chapter, an owner or owners of a business, including
qualified partners of a partnership owning a business, or qualified members of a <br>limited liability company, whether or not employing any other person to perform a <br>service for hire, shall be included within the meaning of the term employee if the <br>owner, owners, qualified partners, or qualified members of a limited liability <br>company elect to come under the provisions of this chapter and provide the <br>insurance required thereunder. Nothing in this section shall be construed to limit the <br>responsibilities of the owners, partners, or members of a limited liability company <br>to provide coverage for their employees, nonqualified partners, or nonqualified <br>members, if any, required under this chapter.
(2) When an owner, owners, qualified partners, or qualified members of a limited
liability company have elected to be included as employees, this inclusion shall be <br>accomplished by the issuance of an appropriate endorsement to a workers' <br>compensation insurance policy.
(3) For the purpose of this section, "qualified partner" or "qualified member or
members" means, respectively, a partner who has entered into a meaningful <br>partnership agreement or a member who has entered into meaningful articles of <br>organization or a meaningful operating agreement of a limited liability company, <br>which document shows on its face that the partner will substantially participate in <br>the profit or loss of the business engaged in by the partnership or limited liability <br>company and that the partner or member has made some contribution to the <br>partnership or limited liability company which entitles him or her to participate in <br>the profits of the business as well as to participate in the decision-making process of <br>the partnership or limited liability company.
(4) For the purposes of this section, "nonqualified partner" or "nonqualified member"
means, respectively, a person who has entered into a partnership agreement, or <br>articles of organization or operating agreement of a limited liability company, which <br>document shows on its face that this person will receive regular payments in <br>exchange for work for the business engaged in by the partnership or limited liability <br>company; that the person will not participate in the decision-making of the <br>partnership or limited liability company and will not participate in the profits and <br>losses of the business engaged in by the partnership or limited liability company.
(5) Every partnership filing a partnership agreement and every limited liability
company filing articles of organization or an operating agreement for the purpose of <br>exemption pursuant to the provisions of KRS 342.340 shall, on or before April 15 <br>of each year, file with the commissioner the employer identification number <br>assigned to the partnership or limited liability company by the Internal Revenue <br>Service. On or before April 15 of each year, each partnership and each limited <br>liability company having a partnership agreement, operating agreement, or articles <br>of organization on file with the commissioner shall file a copy of the tax return of <br>the partnership or limited liability company with the commissioner. Failure to <br>comply with the provisions of this subsection shall be prima facie evidence that the
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partnership agreement or limited liability company articles of organization filed <br>with the commissioner is composed, respectively, of "nonqualified partners" or <br>"nonqualified members", respectively, as defined in this section, and the <br>commissioner shall promptly notify interested government agencies of the failure of <br>the filed partnership agreement or limited liability company articles of organization <br>or operating agreement to indicate compliance with KRS 342.340. With particular <br>reference to employers engaged in coal mining, the commissioner shall promptly <br>report the failure to comply with the provisions of this subsection to the Energy and <br>Environment Cabinet, Department for Natural Resources, Office of Mine Safety <br>and Licensing, so that appropriate action may be undertaken pursuant to KRS <br>351.175.
(6) For purposes of this section, a "limited liability company" means an entity defined
in KRS 275.015 and organized under the provisions of KRS Chapter 275.
Effective: July 15, 2010 <br>History: Amended 2010 Ky. Acts ch. 24, sec. 1779, effective July 15, 2010. --
Amended 2005 Ky. Acts ch. 123, sec. 43, effective June 20, 2005. -- Amended 1998 <br>Ky. Acts ch. 341, sec. 45, effective July 15, 1998. -- Amended 1996 Ky. Acts <br>ch. 332, sec. 1, effective July 15, 1996. -- Amended 1994 Ky. Acts ch. 181, Part 14, <br>sec. 67, effective April 4, 1994. -- Amended 1990 Ky. Acts ch. 20, sec. 1, effective <br>July 13, 1990. -- Amended 1987 (1st Extra. Sess.) Ky. Acts ch. 1, sec. 4, effective <br>October 26, 1987. -- Created 1976 Ky. Acts ch. 219, sec. 1.
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