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Am I Covered Under Workers’ Comp?

Workers’ compensation is insurance that covers employees while they are at work. Many business owners are required by law to provide workers’ comp insurance for their Mooresville employees. Employers must know whether they are required to provide workers’ comp insurance and employees need to know whether they are adequately covered by workers’ comp from their employer. When a company is required to provide this type of insurance but fails to do so, it could face severe financial penalties.

Types of Businesses that Must Provide Workers’ Comp Insurance

The rules regarding workers’ comp insurance are complex. The way a business is structured provides some indication of whether they need to provide workers’ comp insurance. Certain rules apply to specific types of businesses. It is helpful to know the types of businesses that may exist.

  • Sole Proprietorship: This is a business that is owned by one person.
  • Partnership: A business owned by a more than one party. This can include two individuals or a group of individuals, another company, or a corporation.
  • Limited Liability Company: An LLC or LLP is a business structure that is similar to a partnership but offers some additional legal benefits in some cases.
  • Corporation: A company that is a separate entity through the laws of incorporation.

The rules for workers’ compensation insurance requirements can be complex. In general, sole proprietorships, partnerships, and LLCs or LLPs must carry workers’ compensation insurance if they have three or more employees, not including the company owners. This is true even if the employees are family members, or whether they work full time, part time, or seasonally.

Corporations must have workers’ comp insurance if they have three or more employees, including corporate officers. However, if the corporation carries workers’ comp insurance, corporate officers may choose to opt out of coverage for themselves. In addition, any companies that handle radioactive materials must carry workers’ compensation insurance. Agricultural companies need to carry workers’ comp insurance if they have at least 10 full time non-seasonal employees.

What Employees are Covered?

In addition to the type of business structure a company utilizes and the number of employees they have, the type of worker must be identified for purposes of workers’ compensation insurance coverage. Full time, part time, and seasonal workers are all considered employees.

The North Carolina Workers’ Compensation Act also includes minors, apprentices, undocumented workers and unlawfully employed workers as employees. Under the law, if you are an employee, you must be covered by workers’ compensation insurance if the company is required to provide coverage.

There are often questions regarding contractors, subcontractors, and independent contractors. Some employers may utilize these types of workers in order to reduce their tax obligations and to eliminate the need to provide workers’ comp insurance. However, simply because a person does not work directly for the company does not mean that he or she is not considered an employee for purposes of workers’ compensation insurance requirements.

General contractors must carry their own workers’ compensation insurance if they have three or more employees. Subcontractors do not have to supply their own workers’ comp insurance if they work on their own. A general contractor may require a subcontractor to have his or her own workers’ comp insurance as part of their hiring stipulations.

Independent contractors usually do work directly for a company. Although they are not considered actual employees, the company may still be responsible for providing workers’ comp insurance coverage for them. This is a somewhat grey area of the law and depends mainly on how much control the employer has over the independent contractor.

What Happens to Companies That do Not Carry Workers’ Comp Insurance?

The law requires most companies to carry workers’ compensation insurance. When a company is required to carry insurance but fails to comply, they could face severe penalties. The company may be fined up to $100 per day for each employee that is not properly covered by insurance. If a worker is hurt, the company may be held liable for the employee’s medical expenses, lost wages, and other damages that were incurred.

The North Carolina Industrial Commission (NCIC) administers the Workers’ Compensation Act, along with other acts. If you want to know whether a particular company has workers’ compensation insurance, you can look it up online on the NCIC Insurance Coverage Search System. Employers may also verify with the NCIC whether they must carry workers’ comp insurance.

If you were hurt while on the job, you may be entitled to workers’ compensation benefits. These typically include coverage of your medical expenses related to the injury and payment of a portion of regular wages while you are recovering from your injury. At Arnold & Smith, PLLC we understand workers’ compensation cases in Mooresville. We are here to help you get the benefits and payments that you deserve if you were injured at work. Contact Arnold & Smith, PLLC to schedule a consultation today.