North Carolina Workers’ Compensation Law
The North Carolina Workers’ Compensation Act (NCWCA) states all businesses with three or more employees must carry workers’ compensation insurance.1
This includes businesses operating as:
- Sole proprietorships
- Limited liability companies (LLCs)
There are exceptions to what counts as an employee in North Carolina. Sole proprietors, LLC members and business partners are not considered employees. They can choose to be covered if they meet certain requirements.
Certain types of employees are also exempt from the NC Workers’ Compensation Act. These include:2
- “Casual” employees or employees that do not participate in regular business or trade. A casual employee does not work regular hours and can leave the job without notice.
- Domestic, “household” employees
- Farm workers where there are fewer than 10 employees
- Federal government employees
- Railroad employees
- A corporate officer can choose to be excluded from workers’ comp coverage. If they do, they’re still counted as an employee to determine if a business has three or more employees.
Workers’ comp provides benefits to workers who get sick or injured because of their job. Workers’ compensation insurance can help if:
- An employee requires a trip to the emergency room after tripping over a rug in the office. She needs weeks of recovery time. Workers' comp insurance can help replace some of her lost wages. So while she’s recovering, she can still receive an income.
- An employee is injured while lifting a box in your Ashville business. He needs medication and recurring physical therapy. Workers' comp can help cover the medical costs and physical therapy sessions.
- An employee is injured in a car accident while visiting a client in the Raleigh airport. They’re taken to the hospital to receive medical care. Workers' compensation coverage can help pay for their medical services.
- An employee develops carpal tunnel after typing on a computer for months. Due to this injury, he is unable to work in his current role. A doctor tells him to take off a few weeks from work to recover. Workers' comp can help replace some of the employee's lost wages.
If your business must have workers’ comp coverage, you can buy it from a private insurance company, like The Hartford.
Workers’ Compensation North Carolina Coverage
Workers’ comp insurance helps employees that are hurt or sick from a job-related cause. It can help cover an employee’s medical costs and replace some of their lost income if they miss work.
Coverage Requirements – In NC, every employer with over three employees needs workers’ comp. One of the most basic costs of operating your business is ensuring your employees are safe on the job.
What’s Covered – Employees who get hurt or sick because of a job can receive workers' comp benefits. Other coverage includes:
- Lost wages – If an injured employee is unable to return to work, they can receive some of their lost wages. If they miss work longer than seven days, they can receive temporary disability benefits for up to 500 weeks.3
- Medical treatment – The medical costs to treat a work-related injury or illness. The employer or insurance company can choose the health care provider for treatment.
- Death benefits – There is an employee death due to a work-related accident. Workers' comp can cover medical and hospital expenses. It can also include burial costs and provide death benefits to the family.4
Proof of Coverage – This is also known as a certificate of insurance. It can prove that you have workers’ comp coverage in North Carolina. It also explains which kinds of injuries are covered under the policy. Learn more about a certificate of insurance by getting a quote.
What North Carolina Workers’ Compensation Covers
Workers’ compensation insurance from The Hartford can help cover:
Ongoing Care – A work-related illness or injury can require an employee to receive ongoing care. For example, an injured employee needs physical therapy after breaking his leg at a job site. Or a worker gets sick because of their job and needs rehabilitation services. Workers’ comp can help cover these costs for sick or injured workers.
Missed Wages – A work-related injury or illness can cause an employee to miss work. Workers’ comp can help provide some of their missed wages during this recovery time.
Illness – Working conditions may expose employees in the Tar Heel State to harmful chemicals or allergens. This can lead to illness. If an employee becomes sick because of their job, workers’ comp can help provide benefits to the employee.
Funeral Costs – If an employee passes away due to a work-related incident, this coverage can help cover funeral costs.
Repetitive Injury – Not all work-related injuries happen in one isolated incident. Repetitive injuries can take months or even years to develop. This coverage can help provide benefits to employees to receive treatment and recover.
Accident or injury – Workers’ compensation insurance can help cover medical costs if an employee gets injured while at work.
Disability – Some work injuries are so severe that employees may never be able to return to work. In some cases, they may be able to return to work, but in a different capacity. Workers’ comp can help pay for medical bills and replace some lost wages for disabled employees.
North Carolina Workers’ Compensation & Independent Contractors
Independent contractors in North Carolina could count as employees. This means businesses with independent contractors may still need workers’ compensation coverage.
The North Carolina Industrial Commission may use different factors to determine if an independent contractor is an employee. This includes how much of a say the employer has in what the contractor does. You could also be liable for employee injuries if you subcontract work. For example, say a subcontractor doesn't have workers' comp coverage. If one of their employees gets hurt or sick, you could be responsible for their medical costs.5
The NCWCA defines “employee” as any person engaged in employment. This can be through contract of hire or apprenticeship, express or implied, oral or written. This term also includes: 6
- Unlawfully employed persons
- Temporary employees
- Part-time employees
- Seasonal workers
North Carolina Workers’ Compensation & Agricultural Employers
There is no requirement to carry workers' comp insurance for agricultural employers. If there are 10 or more non-seasonal employees, they do need have workers’ comp.7
Where Can North Carolina Employers Get Workers’ Compensation Insurance?
Most businesses in North Carolina can choose their own workers' comp insurance provider. The Hartford is one option for businesses. Employers having a hard time obtaining insurance will need to use the assigned risk pool. This assigned risk pool is administered by the N.C. Rate Bureau and matches a business with an insurance company to provide workers’ comp coverage.8
North Carolina Workers’ Compensation Rates
In North Carolina, the cost of workers’ comp depends on numerous factors. These can include:
- Number of employees and size of payroll
- Type of work your business is in
- Claims history
- How long your business has been in operation
There are different rates for each type of employee. This is also called a classification code. They're also known as workers' comp class codes. These are applied on a percentage basis per $100 of payroll.9
The North Carolina Workers’ Compensation Act & Workers’ Compensation Claims
In 1929, The North Carolina Industrial Commission was created. This commission administered the North Carolina Workers’ Compensation Act (NCWCA).10 The NCWCA requires employers with over three employees to buy workers’ compensation insurance.
When an employee is sick or hurt because of their job, they must:
- Report the accident to their employer within 30 days.11
- They can also file a workers’ compensation claim with the state Industrial Commission.
To file a claim, an employee completes a Form 18. This form has to be filed within two years of the date of injury or disease.12 When filing a claim, the employee has to be able to show:
- An employment relationship with the employer.
- The injury or sickness was caused by their work.
- The injury or illness caused losses covered under the NCWCA.
Medical bills from a claim are processed by the North Carolina Industrial Commission. The Commission also oversees the NC Workers’ Compensation Medical Fee Schedule. The NC workers’ compensation fee schedule details how much providers can charge for services.
Employer Penalties & North Carolina Workers’ Compensation Law
North Carolina law states the penalties for not having workers’ compensation include:
- Being charged with a misdemeanor
- Being charged with a felony
- Being imprisoned
North Carolina Workers’ Compensation Claims
To file a claim for workers’ compensation in your state, visit our claims page today.
This article provides general information, and should not be construed as specific legal, HR, financial, insurance, tax or accounting advice. As with all matters of a legal or human resources nature, you should consult with your own legal counsel and human resources professionals. The Hartford shall not be liable for any direct, indirect, special, consequential, incidental, punitive or exemplary damages in connection with the use by you or anyone of the information provided herein.
1, 2, 5 North Carolina Industrial Commission, “Employers’ Requirement to Carry Workers’ Compensation Insurance”
3 North Carolina Industrial Commission, “Workers’ Compensation Act: Rates and duration of compensation for total incapacity”
4 North Carolina Industrial Commission, “Workers’ Compensation Act: Where death results proximately from compensable injury or occupational disease; dependents; burial expenses; compensation to aliens; election by partial dependents”
7, 8, 9 North Carolina Industrial Commission, “Understanding Your Workers’ Compensation Obligations”
11, 12 North Carolina Industrial Commission, “Notice of Accident to Employer and Claim of Employee, Representative, or Dependent”