Meaning of "exempted from coverage" in this context

Question

Question: What does "exempted from coverage" mean in this context?

This is in regards to Unemployment Insurance (UI). You pay UI premiums all year long. If you get laid off from work, then you claim unemployment benefits from the government.

Here is a paragraph from a book (note that I have found a number of inconsistencies in this book):

As in most other [Unemployment Insurance] schemes, the Canadian legislation began by stating that all private-sector employment and all public-sector employment (provincial employees with the consent of the provincial government), . . . were insurable. It then listed 21 specific types of employment that were exempted from coverage, the most prominent being agriculture, horticulture and forestry, fishing, most lumbering and logging, transportation by water or by air, domestic service, hospital employees, teachers, Government of Canada employees appointed under the Civil Service Act or certified as permanent, municipal and provincial employees unless their employers agreed, and generally any employment earning more than $2,000 per year. Roughly 42 per cent of the labour force was covered; the rest fell into the exempted categories.

_{Source: Pal, Leslie A. 1988. State, Class and Bureaucracy: Canadian Unemployment Insurance and Public Policy. Page 39.}

I don't understand what Pal (1988) means by "exempted from coverage".

Exempt means to excuse someone or something from a duty, payment, etc. If that is the intended meaning, then the sentence should be "exempted from paying UI premiums" which is NOT the same as "excluded".

Did Pal mean "excluded from coverage the UI program"? That is the what I feel the author meant. The first sentence says the general false truth - "we are there for everyone". I would expect the following sentence to say how that is not true and how some industries/occupations were excluded from being able to claim benefits.

Research

I am following a different source too (a very authoritative one). Here is something from Lin (1988):

The UI Act of 1940 made coverage compulsory but with broad exceptions. Certain industries, professional services, government services, casual employees, and persons with annual earnings over $2,000 were all excluded from the system.

_{Source: Lin, Zhengxi. 1998. "Employment Insurance in Canada: Recent Trends and Policy Changes." Canadian Tax Journal 46, no. 1: 58-76. https://www.ctf.ca/ctfweb/Documents/PDF/1998ctj/1998CTJ1_Lin.pdf (Page 63)}

Here is another source (but this is quite unreliable since it's essentially a website/blog):

At its outset, the new scheme was somewhat narrow in its coverage. While the Act applied to all private and federal public sector employment generally, it nevertheless did exclude a number of different types of employment, such as agriculture, forestry, fishing, logging, hospital care, education (teachers), and any employment earning more than $2,000 per year. Additionally, municipal and provincial public sector employees were excluded unless their employers agreed to participate. As a result, only about 42 percent of the labour force was covered under the new insurance scheme (Pal, 1988).

_{Source: Makarenko, Jay. 2009. Employment Insurance in Canada: History, Structure and Issues. https://www.mapleleafweb.com/features/employment-insurance-canada-history-structure-and-issues.html}

Both Lin and Makarenko state that certain industries/occupations were "excluded" (note that Makarenko cites Pal). This means that people who worked in those areas could not claim benefits even if they lost their jobs. "Exempt" would only mean they did not have to pay premiums (they could have received benefits even without paying premiums).

Answer 1

Exempting something or someone, particularly in a legal context as it is used here, means relieving them from an obligation, duty, tax, etc. that would apply if the exemption didn’t exist. It is common in legislation to impose an obligation widely in the first instance and then “exempt” or “carve out” the particular instances were the underlying government policy says that the obligation shouldn’t apply. For example, legislation might ban flashing lights on ALL vehicles but then an exemption might allow police and emergency vehicles to use them.

That seems to be what’s happening here. All public and private sector employment is covered by the insurance legislation, but then 21 specific types of employment are exempted from the operation of that legislation. Yes, you can re-phrase this using “excluded” instead of “exempted” but formally (in legal terminology and in standard usage too) the first reference you quoted is properly using the word exempted.