gtag('config', 'AW-1029898234');
Businesses Without Workers’ Compensation Insurance Beware!

Businesses Without Workers’ Compensation Insurance Beware!

Ryan McNeil|Generally speaking, in North Carolina an employer must provide workers’ compensation insurance coverage for its employees if it regularly employs three or more people. This coverage kicks in if the employee is injured on the job. Some small business owners do not realize they must provide the required coverage for their employees. Others make a conscious decision to avoid the related expense hoping they are not caught. What is Workers’ Compensation? The North Carolina Workers’ Compensation Act (§ 97, the “Act”) provides protection for employees injured by a specific event, afflicted by occupational disease, or killed during the course of their employment. This Act outlines the procedures the employee must follow to report the injury to the employer and the North Carolina Industrial Commission (NCIC, the state agency responsible for administering the Act). The Act also details required compensation for medical expenses and lost wages during the recovery period, payment for a permanent disability, or the award for lost wages and burial expenses to beneficiaries if the individual is killed on the job. The Three Employee Rule The biggest risk for small business owners is not understanding the three employee rule that triggers the requirement to maintain workers’ compensation insurance. Consider these requirements: You must include part-time employees in the count.Use caution when you classify someone as an independent contractor and issue a 1099.  If the North Carolina Industrial Commission determines the individual should be properly categorized as an employee and not a contract worker, then you may be penalized for not having workers’ compensation insurance.Owners of an LLC or partnership are not treated as employees in the...