Orlando Harmon
Workers' compensation insurance is a form of no-fault insurance that protects employees from injuries incurred at work. In North Carolina, businesses with three or more employees, including corporations, sole proprietorships, LLCs, and partnerships, are required to obtain workers' compensation insurance or qualify as self-insured. This policy provides medical benefits and partial wage replacement for work-related accidents, with the first payment of benefits due 14 days after the employer receives notice of the injury. While there are exceptions for certain industries and employee types, such as federal government employees and casual employees, the North Carolina Industrial Commission is responsible for administering the Workers' Compensation Act and can assist with any questions or concerns.
| Characteristics | Values |
|---|---|
| Who is required to carry workers' compensation insurance? | Businesses with three or more employees, including corporations, sole proprietorships, LLCs, and partnerships. |
| Are there any exceptions to the requirement? | Yes, some categories of workers are exempt, including certain railroad workers, casual employees, domestic servants, farm laborers (fewer than 10 full-time), and federal government employees. |
| Are businesses with fewer than three employees required to have workers' compensation insurance? | No, but it is recommended. Even sole proprietors may choose to carry coverage for protection against work-related injuries. |
| What are the benefits of workers' compensation insurance for employers? | Immunity from employee personal injury lawsuits, reimbursement for medical treatment for injured employees, and protection from financial losses. |
| What are the benefits for employees? | Medical benefits and partial wage replacement in the event of a work-related injury, reimbursement for travel and parking expenses, and protection from retaliation for filing a claim. |
| How to file a claim? | Report the injury to the employer orally and in writing within 30 days. File Form 18 and Form 33 with the North Carolina Industrial Commission if the claim is denied. |
| Additional resources | The North Carolina Industrial Commission can assist with questions and concerns about workers' compensation. |
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What You'll Learn
Requirements for workers' compensation insurance
The North Carolina Workers' Compensation Act requires businesses with three or more employees to obtain workers' compensation insurance. This includes corporations, sole proprietorships, limited liability companies, and partnerships. The Act also covers employees who are deemed independent contractors, and businesses must provide compensation for work-related injuries, even if they are subcontracted.
There are exceptions to this rule, and workers' compensation insurance is not required for the following employee types:
- Employees of certain railroads.
- Casual employees, whose work is not in the usual course of the employer's trade or business.
- Domestic servants directly employed by the household.
- Farm labourers, where fewer than 10 full-time, non-seasonal workers are employed by the same employer.
- Federal government employees in North Carolina.
- Sellers of agricultural products for the producers, where the product is prepared for sale by the producer.
Businesses that employ individuals in activities involving radiation are required to have workers' compensation coverage. Sole proprietors, members of LLCs, and partners are not automatically counted as employees.
For businesses with fewer than three employees, workers' compensation insurance is not mandatory, except in certain cases, such as trucking owner/operators, who are required to have coverage even if they are independent contractors. If they do not have this coverage, the motor carrier must provide it.
Insurance rates are developed by aggregating losses from similar employers, and there are approximately 600 classifications of employers in North Carolina, each with different rates. Insurance companies consider various factors when setting rates, including employee selection and training, first aid, medical evaluation, safety promotion, and protective clothing and equipment.
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Employees vs. independent contractors
In North Carolina, workers' compensation insurance is required for all businesses with three or more employees. This includes corporations, sole proprietorships, limited liability companies, and partnerships. However, the state makes a distinction between employees and independent contractors when it comes to workers' compensation coverage.
Employees
Employees are typically considered individuals who work directly for an employer and are subject to the employer's control in terms of work details, schedule, and workload. They are entitled to workers' compensation benefits if they are injured on the job. Employees in North Carolina are also entitled to lodging and meal expenses when medically necessary and reimbursement for certain medically necessary travel costs.
Independent Contractors
Independent contractors, on the other hand, are self-employed individuals who have more flexibility and control over their work. They are typically referred to as 1099 workers as they report their income through IRS Form 1099. While North Carolina law does not require employers to carry workers' compensation insurance for independent contractors, the state's Industrial Commission may still find that these workers are employees if the employer exerts a certain degree of control over their work. This determination is made based on various factors and can be challenging.
It's important to note that certain industries, such as trucking owner/operators, are required to have workers' compensation coverage even if they are deemed independent contractors. Additionally, if a general contractor hires a subcontractor, they are responsible for ensuring that the subcontractor has workers' compensation coverage or providing it themselves if the subcontractor cannot.
To apply for workers' compensation insurance in North Carolina, businesses can refer to the North Carolina Industrial Commission website and resources. The Commission assists both employees and employers with questions and concerns related to workers' compensation. It's important for businesses to understand the specific requirements and exemptions for their industry and worker classification to ensure compliance with the state's workers' compensation laws.
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Benefits of workers' compensation insurance
Workers' compensation insurance in North Carolina provides several benefits to both employers and employees. Firstly, it helps protect employers from liability in the event of employee injuries or illnesses incurred on the job. By providing workers' compensation, employers can shield themselves from potential lawsuits, as employees generally give up certain rights to sue in exchange for protection from work-related injuries.
For employees, workers' compensation insurance offers financial support and medical coverage in the event of a work-related injury or illness. It can help cover medical costs, including doctor visits and treatment expenses. Additionally, if an employee is unable to work due to their injury or illness, workers' compensation can provide wage replacement benefits, ensuring they receive a portion of their lost income during their recovery period. This includes both benefits for the time taken off work and future wages that may be lost due to ongoing disability.
Another advantage of workers' compensation insurance is the ability to receive compensation for travel expenses related to medical treatment. In North Carolina, injured workers can collect compensation for travel at a specified rate per mile if they travel more than 20 miles round trip for their medical care.
In cases of severe or permanent disability, workers' compensation insurance in North Carolina offers additional benefits. If an employee is unable to return to their previous job due to the extent of their injuries, they may receive compensation for future lost wages and ongoing disability. This includes Total and Permanent Disability benefits for those who can no longer work at all.
Furthermore, workers' compensation insurance in North Carolina allows for flexibility in choosing medical treatment. While the employer or their insurance company can direct the initial medical treatment by choosing the employee's doctor, the injured worker has the right to petition the Industrial Commission to change doctors if they are unsatisfied with their care. This includes the option to seek a second opinion.
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How to file a claim
If you are injured at work, you can usually seek workers' compensation benefits. North Carolina's workers' compensation system provides medical treatment for injuries and wage loss benefit payments if those injuries keep you from working. However, the workers' compensation requirements in North Carolina are complex, and filing a claim can be a complicated process. Here is a step-by-step guide on how to file a workers' compensation claim in North Carolina:
Report the Injury to Your Employer:
Notify your employer about your injury as soon as possible. This is crucial, as you are generally expected to provide your employer with notice of your claim within 30 days of your accident.
Seek Medical Attention:
Seek medical treatment for your injury. Your employer may offer to pay for your medical expenses in exchange for not filing a formal claim. However, it is important to note that you are entitled to certain benefits under North Carolina's Workers' Compensation Act, such as medical care, wage replacement, and potentially a cash payment for any permanent partial disability.
Obtain and Fill Out the Necessary Forms:
You will need to fill out Form 18, the "Notice of Accident to Employer and Claim of Employee, Representative, or Dependent." This form can be filed electronically or mailed to the North Carolina Industrial Commission. It is important to complete the form accurately and include all relevant information. You may also want to attach supporting documentation to strengthen your claim.
Additionally, your employer will need to fill out Form 19, the "Employer's Report of Employee's Injury," and submit it to the appropriate claims department.
Submit the Forms:
Submit Form 18 to the North Carolina Industrial Commission within two years of the date of your accident. You can find the contact information for the Commission on their website. Keep a copy of all forms submitted for your records.
Consider Hiring an Attorney:
The workers' compensation claim process can be complex, and having an attorney can improve your chances of having your claim accepted. They can help you prepare and file the necessary forms, ensuring all the required information is included. If your claim is denied, an attorney can assist you in requesting a hearing and representing your interests.
It is important to remember that your employer cannot retaliate against you for filing a workers' compensation claim. If you face any adverse employment action due to your claim, you should report it to the North Carolina Department of Labor as it violates the Retaliatory Employment Discharge Act (REDA).
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Exemptions
In North Carolina, workers' compensation laws cover most employers and employees, but specific exemptions exist. The North Carolina Workers' Compensation Act requires that all businesses with three or more employees obtain workers' compensation insurance or qualify as self-insured employers. However, certain categories of workers and businesses are exempt from this requirement.
- Federal Government Employees: Employees of the federal government working in North Carolina are not covered under the state's workers' compensation requirements.
- Certain Railroad Employees: Employees of specific railroads are not mandated to be covered by workers' compensation insurance. These workers are typically protected under the Federal Employers Liability Act (FELA).
- Farm Laborers: Farms employing fewer than ten full-time, non-seasonal farm workers are exempt from the requirement.
- Casual Employees: Individuals whose employment is casual and unrelated to the employer's trade, business, profession, or occupation are exempt.
- Domestic Servants: All domestic employees are exempt from workers' compensation requirements.
- Sellers of Agricultural Products: Individuals selling agricultural products on commission for producers are exempt if the products are prepared for sale by the producer.
- Sole Proprietors, Partners, and LLC Members: These individuals are not automatically counted as employees and are not required to carry workers' compensation insurance for themselves. However, if they hire three or more employees, they must obtain insurance to cover those employees.
- Independent Contractors: Independent contractors are generally not considered employees and are exempt from coverage. However, simply calling an employee an independent contractor may not be sufficient to establish this status.
- Executive Officers, Directors, and Committee Members of Nonprofits: These individuals are not automatically considered employees and are not included in the minimum count required for workers' compensation coverage. However, they can elect to be included in the insurance policy.
It is important to note that exemptions may vary, and criteria for exemptions can change, so employers and employees should carefully review North Carolina's workers' compensation laws to understand their protections and requirements. Workers' compensation insurance can be purchased from private insurance companies authorized by the state or through the Assigned Risk Pool or State Insurance Fund for businesses unable to obtain coverage from a private company.
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Frequently asked questions
No, only businesses with three or more employees are required to carry workers' compensation insurance. However, there are some exceptions, including certain railroad workers, casual employees, and domestic servants.
Workers' compensation insurance provides immunity from employee personal injury lawsuits. It also covers medical benefits in the event of a work-related accident.
Injured employees are entitled to workers' compensation benefits regardless of who caused the accident. Employees are also entitled to reimbursement for certain expenses incurred while receiving treatment.
Each employee has a class code based on the level of risk for their job. It's important to classify your employees correctly to avoid overpaying or misclassification fines.
Not every workers' compensation claim requires a lawyer. However, if you have questions about your specific situation, it's best to consult with a workers' compensation attorney.
