In order to collect workers’ compensation benefits, the employer that you work for must actually pay for workers’ compensation insurance.  Under the North Carolina workers’ compensation act, all businesses that employ three or more employees must carry workers’ compensation insurance. This covers all forms of businesses ranging from corporations to sole proprietors.


Although the N.C. Workers’ Compensation Act requires workers’ compensation insurance for all businesses that employ more than three workers, there are several exceptions that exist:

  1. Certain railroad employees
  2. Casual employees
  3. Domestic servants hired directly by a household
  4. Farm laborer (as long as less than 10 laborers are employed)
  5. Federal employees
  6. Sellers of agricultural products for producers that are paid on commission

Additionally, any employer that deals with toxic or radioactive materials must have workers’ compensation insurance, regardless of the amount of employees. An employer can also not avoid paying for workers’ compensation insurance by classifying their employees as independent contractors. If this is the case, the N.C. Industrial Commission can use a test to determine whether an independent contractor actually qualifies as a full-time employee.


Although the law requires that businesses pay for workers’ compensation insurance, this does not always mean that all required businesses follow the law. Any business that is found to not carry workers’ compensation insurance in violation of the law can face the following consequences:

  1. Hefty financial penalties;
  2. Misdemeanor charges;
  3. Felony charges; or
  4. Imprisonment;

Due to the sliding scale of penalties, each individual case is handled on a case-by case-basis with punishment increasing with the severity of the infraction. If you know of a business that does not pay for Workers’ Compensation insurance, you can anonymously contact the Fraud Section of the N.C. Industrial Commission at 1-800-201-3362.

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If you or someone you know has been injured while at work, you should Contact Us for a free Workers’ Compensation consultation. By contacting an experienced Worker’s Compensation attorney, you will receive valuable legal advice and an experienced guide through the complex Worker’s Compensation process.

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