North Carolina HOAs Not Required to Have Workers' Comp
Posted on Jan 18, 2016
Homeowners associations (HOAs) are usually run by members and directors. These organizations can be set up as corporations. Previous provisions under the North Carolina Workers' Compensation Act required corporations to maintain workers' comp insurance. (Employers with three or more workers, in most industries, are required to maintain the insurance.) Although many HOAs are non-profit corporations run entirely on a volunteer basis, no exemptions were provided the way the law was written. The technical definition of an employee fit the role of someone volunteering or elected to an HOA board position.
Definition of 'Employee'
Concerned about liability and a deficit in appropriate insurance options, public comments were made to legislators. Lawmakers drafted House Bill 765, a piece of legislation that, among other items, redefines 'employee' in the Workers' Compensation Act. One section sets forth to "AMEND DEFINITION OF "EMPLOYEE" UNDER THE WORKERS' COMPENSATION ACT TO EXCLUDE VOLUNTEERS AND OFFICERS OF CERTAIN NONPROFIT CORPORATIONS AND ASSOCIATIONS." Visit Page 7 of the ratified bill to read the new definition of 'employee,' which now explicitly exempts individuals in standard HOA structures. The bill was signed into law by the governor in October 2015.
Hurt at Work and Uninsured Employer
For workers in other fields, learning an employer does not carry workers' comp insurance is startling. Learn about what you can do if you work in North Carolina and find out your employer is not insured with a workers' comp carrier.