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What Is the Penalty for Not Having Workers’ Compensation in North Carolina?

Fri Feb 16th, by Workers Compensation |

For employers and employees alike, workers’ compensation laws are in place to protect workers’ rights and ensure their safety in the workplace. Unfortunately, those rights are not always lawfully upheld and can put both the employer and employees at risk should anything unexpected happen. Consulting with an experienced Concord workers’ compensation lawyer can help provide you with the clarity you need to navigate the complexities of the legal process.

Having a detailed understanding of the workers’ compensation laws in North Carolina, who is qualified or exempt, as well as the financial penalties and legal consequences involved for those individuals or entities who fail to adhere to state laws, is crucial to ensuring not only the safety and well-being of your employees but also the long-term success of your business.

What Is the North Carolina Workers’ Compensation Law?

Under state law, the North Carolina Workers’ Compensation Act requires that all businesses that employ three or more employees obtain workers’ compensation insurance with the purpose of paying workers’ compensation benefits to their eligible employees. Businesses that have one or more employees who are engaged in activities in which they are in the direct presence of radiation are also legally required to obtain workers’ comp insurance.

Sole proprietors, members of LLCs, partners, executive officers, directors, and non-profit corporation committee members are not automatically counted as employees. Corporate officers are still counted as employees when determining whether or not the business has three or more employees; however, they can elect to be excluded from coverage if they wish.

What Are the Penalties for Not Having Workers’ Compensation Insurance in North Carolina?

The penalties for qualified businesses failing to obtain workers’ comp insurance can result in steep legal penalties and financial consequences. Qualifying North Carolina employers who fail to secure workers’ comp insurance can be charged with the following penalties:

  • Class H Felony
  • Fines of up to $36,500 per year ($100 per day), even if no workplace injuries took place.
  • Liability for medical expenses and wage replacement benefits to an employee who suffered a related workplace injury.
  • Misdemeanor
  • Imprisonment

The exact amount of the fines and length of imprisonment can vary depending on the exact number of employees of the business and the severity of any workplace injuries that have taken place, as well as a number of other factors, which is why it is vital to secure workers’ comp insurance as a qualified employer in North Carolina.

Who Is Exempt From Workers’ Compensation in North Carolina?

Although the vast majority of businesses in North Carolina qualify and, therefore, are required by law to provide workers’ compensation coverage for their employees, there are a handful of exceptions.

Here is a list of individual workers who are legally exempt from mandatory workers’ comp coverage:

  • Federal government employees
  • Railroad employees
  • Agricultural workers on farms with less than ten employees
  • Casual employees – defined as employees who perform work not typically associated with the business and can leave the job at will.
  • Domestic workers
  • Corporate officers – can elect to opt out of coverage

Sole proprietors, although they are not officially counted as employees in regard to obtaining mandatory insurance coverage, may still elect to obtain coverage for themselves in order to protect themselves against the financial implications of an injury that results in a lengthy recovery and high medical bills.


Q: What Is the Fine for Not Having Workers Comp in North Carolina?

A: In North Carolina, any qualifying business that fails to obtain workers’ compensation insurance can be assessed a daily fine of anywhere between $50 and $100, which is determined by the exact number of employees. In addition to daily fines, the employer can also be given criminal charges and face potential imprisonment.

Q: Is Workers’ Comp Required in North Carolina?

A: Yes, the North Carolina Workers’ Compensation Act requires by law that all businesses that have three or more employees obtain workers’ compensation insurance in order to pay workers’ comp benefits to their eligible employees. This also includes businesses in which one or more employees are engaged in activities in which they are in the presence of radiation. Failure by qualified businesses to obtain workers’ comp insurance can result in stiff legal penalties.

Q: What Is the 90-Day Rule for Workers’ Comp in North Carolina?

A: The 90-day rule allows the employer’s insurance company to review and contest the employee’s workers’ comp claim. If the employer or their insurer does not contest the claim or their liability within the allowed 90 days from which the claim was written, then they waive their right to contest the compensability of their liability for the workers’ comp claim.

Q: What Is the Statute of Limitations for Workers’ Comp in North Carolina?

A: Under North Carolina state law, the statute of limitations for filing a workers’ compensation claim is two years after the date that the injury occurs. Failure to submit your workers’ comp claim within the statute of limitations will likely result in your claim being barred. An experienced attorney can guide you through this process.

Reach Out to M. Reid Acree, Jr., Attorney at Law

If you are an employee in North Carolina, it is vital that you secure sufficient workers’ compensation to cover all your medical expenses and lost income should you be injured in the workplace.

M. Reid Acree, Jr., Attorney at Law, has over 30 years of legal experience practicing workers’ compensation law. He can leverage that experience to provide you with effective and compassionate representation, ensure that you have a clear understanding of your rights during the aftermath of a workplace injury, and help you secure the full compensation that you are entitled to.

If you have been involved in a workplace accident and need to miss work in order to recover, please reach out and give us a call to schedule a consultation. Our team can review your case with you and discuss which options are available so that you can turn your focus back to your recovery.