North Carolina Workers’ Compensation

north carolina worker's compensation text overlaying image of charlotte north carolina If you run a business and have employees, you’ll need to purchase North Carolina workers’ compensation insurance. In fact, this type of insurance is a requirement in most states, including North Carolina, with some exceptions. It helps pay your employees’ medical bills if they sustain an injury on the job. And limits your liability for workplace accidents, is a requirement in most states, including North Carolina, with some exceptions.

In North Carolina, business owners can expect to pay, on average, $0.97 for every $100 of covered payroll. That means a business with a total annual payroll of $100,000 will pay approximately $970 per year for workers’ compensation insurance, or around $80 a month. This is only a rough estimate, since factors such as your location, the different rates for staffing types (laborers vs office workers), and your claims history can all have a significant impact on your rates.

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One of the biggest factors in determining your rates for workers’ compensation insurance is your employees’ risk, or the likelihood of a workplace injury occurring at your business. To assist insurers in determining risk exposure, and to get the best rates for your business, you can use a variety of workers’ compensation class codes. This is important because it costs more to insure certain employees. For example, office employees may have lower workers’ compensation costs than those who work outside of your office and face more risks.


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What’s Covered

If an employee sustains an injury on the job or becomes ill due to workplace conditions, workers’ compensation in North Carolina will help them with their medical bills. The average weekly wage of the employee determines the workers’ compensation benefits. The amount depends on the type of claim.

In general, workers’ compensation in North Carolina covers:

  • Accidents and injuries – If your employee needs medical attention, workers’ compensation will cover any medical expenses from a workplace injury.
  • Illness – If an employee becomes sick from exposure to allergens or other hazardous materials at work, they can also receive workers’ comp benefits to help pay for treatment.
  • Repetitive injury – It’s not just accidents that are covered: treatment for repetitive injuries, like carpal tunnel syndrome, are also covered by workers’ compensation. 
  • Ongoing care – If your employee still has medical needs as a direct result of their accident or illness, even after they return to work, they can get benefits for ongoing care. This includes additional doctor’s appointments or additional surgeries.

In addition, if their accident or illness results in permanent or temporary disability, your employee will receive weekly or lump sum payments. If they have a temporary disability, their injury prevents your employee from performing their job. But they can return to work as normal once they recover. If a doctor diagnoses them with an injury from which they will not fully recover, they have a permanent disability. 

These categories fall into the following classifications:

  1. Temporary total disability (TTD) – These payments will be made if your employee is not able to work at all while recuperating.
  2. Temporary partial disability (TPD) – TPD payments will be made if your employee can still work, but only with certain limitations, such as needing to perform lighter duties or work fewer hours. If your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
  3. Permanent total disability (PTD) – Employees who are unable to work due to an accident or illness, even after they have recovered as much as they are likely to, will be eligible for PTD payments.
  4. Permanent partial disability (PPD) – Employees who have permanent difficulties but can work with them will be eligible for PPD.


North Carolina’s Workers’ Compensation Death Benefits

If an employee dies as a result of a work injury or illness, their dependents will be eligible for workers’ compensation death benefits. 

Surviving spouses and minor children are typically wholly dependent. The employee’s spouse will be eligible for benefits as long as they lived with the deceased worker. Minor children are any children under the age of 18, including adopted children, stepchildren, and acknowledged illegitimate children, who were dependent on the worker at the time of death, and any children born after the worker’s death.

If there are no wholly dependent family members, partially dependent individuals can receive benefits depending on the amount of support that the worker had been providing them. Benefits can also be paid to next-of-kin in a lump sum. If there is no next-of-kin, workers’ compensation insurance will only cover burial expenses.

The weekly death benefit in North Carolina is two-thirds of the worker’s average weekly wage, payable for at least 500 weeks, or until a minor receiving payments reaches the age of 18. Burial costs can be reimbursed up to $10,000.

The awarding of workers’ compensation death benefits in North Carolina can be more flexible than those of other states in certain circumstances. This is because the North Carolina Supreme Court have the “Pickrell presumption,” which states that even if the exact cause of death is unknown, and the circumstances of the accident are unknown, the dependents of a worker may still be eligible for workers’ compensation benefits.


North Carolina’s Workers’ Compensation Laws

According to the North Carolina Workers’ Compensation Act (NCWCA), all businesses with three or more employees are required to carry workers’ compensation insurance. In North Carolina, there are some exceptions to this rule, based on the definition of employee. If you are self-employed, you are not considered an employee. LLC members and business partners are also exempt from the workers’ comp requirement. 

The NC Workers’ Compensation Act also exempts certain other types of employees, including:

  • Employees who are “casual,” meaning they do not work regular hours and are free to leave at any time
  • Domestic or household workers
  • Farm workers at farms with fewer than ten employees
  • Employees of the federal government
  • Employees of the railroad


How to Buy Workers’ Compensation Insurance

In most cases, you can obtain workers’ compensation coverage from a private commercial insurance company. EZ provides a simple online application for North Carolina businesses to compare quotes from top insurance carriers. As well as licensed agents with insurance expertise who can help you choose the best carrier and policy for your business.

If your company’s high-risk status makes it impossible to obtain workers’ compensation insurance through a private insurer, you can get coverage from the North Carolina assigned risk pool. The N.C. Rate Bureau administers this assigned risk pool. Many new small businesses purchase coverage from the risk pool until they have a track record that will allow them to apply for commercial insurance. It’s important to note that assigned risk workers’ compensation insurance costs more than voluntary-market insurance.

If you meet certain criteria and submit an application, you also have the option to self-insure. This means you will pay for your workers’ compensation claims out-of-pocket as they arise, instead of paying a premium and submitting a claim to an insurance company. To qualify, you have to prove you can afford to pay for any potential claims out-of-pocket.

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How to Get the Most Savings

The majority of the cost of workers’ compensation comes from factors beyond your control. However, there are still ways to save. Implementing a safety program is a great way to reduce workplace injuries and claims, which will lower your premiums. So regardless of your industry, it is important to have safety and standard operating procedures in place. Employees who have safety training are less vulnerable to injuries, lowering your workers’ compensation costs.

It is also a good idea to regularly review your claims history. Evaluating your claims history on a regular basis can help you identify and correct patterns. You might discover that certain aspects of your business operations are frequently causing claims. This allows you to adjust the operation to make it safer. You can save money by keeping an eye on potentially dangerous operations.

Correctly classifying your employees is one of the most effective ways to save money. When you apply for your workers’ compensation policy, you will classify each of your employees depending on their job’s risk. And this risk classification influences the cost of your workers’ compensation. For example, you might pay less to insure an office worker than you would a manual laborer. It’s also important to correctly classify your employees because you may receive a fine if you fail to do so.

Begin a free online application today to compare workers’ compensation insurance quotes for your small business from leading U.S. insurers. EZ’s agents specialize in insurance for a wide range of small businesses. Working with our agents can save you hundreds of dollars a year on coverage.


North Carolina Workers’ Compensation FAQs

  • Are you required to have workers’ compensation insurance in North Carolina?

Almost all employees working in the state must be covered by workers’ comp insurance. Failure to comply with North Carolina workers’ compensation law carries severe penalties, including fines and possible criminal prosecution. 

Failure to obtain coverage is punishable by a fine of one dollar per employee per day. This is imposed by the North Carolina Industrial Commission. Your fine will be a minimum of $50 per day and a maximum of $100 per day. Regardless of the number of employees. To put this into context, if you fail to carry coverage for one year, you will be fined between $18,250 and $36,500.

  • How do workers’ compensation settlements work in North Carolina?

In North Carolina, there are three types of workers’ compensation settlements:

Compromise settlement: With this type of settlement, you, your employee, and your insurer will come to a complete and final resolution of the workers’ compensation claim. In most cases, the injured worker will receive a single lump-sum payment. But they could get a structured settlement, which would not affect the finality of the settlement. A lump-sum payment will usually be given in this type of settlement when there are severe injuries with long-term care.

Form 26A settlement: In this case, the insurance company pays your employee in weekly installments for the value of your permanent disability. Your employee gives up their right to future permanent disability benefits in exchange for this.

Form 21 settlement: This is similar to the type of settlement described above, except that it is for temporary disability benefits rather than permanent disability benefits. In contrast to a lump-sum agreement, the injured worker can file a second claim after two years if treatment is still necessary.

  • What is the statute of limitations in North Carolina?

The North Carolina workers’ compensation statute of limitations is two years from the date of the injury. If the injured person does not file a Form 18 claim within that time frame, the claim will be denied.

According to North Carolina law, an employer must immediately report any work-related injury or illness to their insurance carrier. If an employee has to miss more than one day of work, or if medical expenses exceed $2,000, the employer or carrier must notify the Industrial Commission within five days. That report, as well as a blank report on which the employee can file a claim, must be provided to the employee.


Why Use EZ

We do everything in our power to make shopping for workers’ compensation insurance as easy and stress-free as possible. And we give each of our customers our undivided attention. As soon as you fill out our form, you will receive instant, free quotes from your dedicated agent. Who will give you personalized service and will work to understand your needs. We want to ensure that you get the best coverage at the best price. Our services are completely free so check out your quotes today!

If you still have questions, feel free to give us a call at 877-670-3538. You will speak to a local insurance agent who can answer all of your questions. We can also help you find the workers’ compensation policy that works best for your business.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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