$1M in Fines Collected from NC Employers Without Workers' Comp
Posted on Jan 13, 2016
North Carolina officials have revised systems in recent years to improve administration that can help identify employers who are illegally operating without workers' compensation insurance. Depending on the industry, North Carolina employers with three or more employees are required to maintain workers' comp insurance coverage. Failing to do so could result in fines and charges.
The North Carolina Industrial Commission has gathered civil fines in excess of $1 million over the past year. Approximately 100 uninsured employers have been charged misdemeanors. Charges against uninsured employers range in severity when a worker is injured. In some cases, the employer may face jail time.
Some employers commit fraudulent acts in efforts to avoid paying for insurance. One of these methods is misclassifying employees as independent contractors. The Internal Revenue Service provides a complete breakdown of how employees and independent contractors are recognized. North Carolina lawmakers had considered new regulations that would monitor misclassifications, however, those provisions did not pass. It remains to be seen if regulations in this area will change and help minimize the number of employers carelessly operating without proper insurance coverage.
Understand that even if an employer does not have workers' comp coverage, an injured worker can still file a workers' comp claim. Although this process is more complicated and the employee should review options with an attorney, there may be local benefit programs to help offset medical costs and help cover day-to-day expenses.