As a general rule, Charlotte and Mecklenburg employers with three or more employees must have workers' compensation insurance. Employers may satisfy the requirements of the law by qualifying with the North Carolina Industrial Commission as self-insurers in lieu of obtaining insurance through a traditional carrier.
The three-employee rule does not apply to companies whose employees work with or in the presence of radiation. Businesses of this type must have workers' compensation to cover an injured worker as long as they employ at least one person.
Sole proprietors, partners and the members of a limited liability company are not counted as employees, but corporate officers are, even if they opt out of being eligible for workplace injury coverage.
Workers' compensation coverage rules for independent contractors are a little trickier to sort out. Even though workers get an IRS Form 1099 at the end of the year, signifying their status as independent contractors, North Carolina workers' compensation officials may still treat the worker as an employee for coverage purposes.
State officials review more than a Form 1099 to classify a worker as an employee or as an independent contractor. The determination is made by reviewing the circumstances surrounding the work performed by the individual, with particular attention given to the amount of control that is asserted by the person or company hiring the worker.
For example, an employer who controls how a contractor performs his or her job and provides the tools and equipment for doing the work might be designated as an employer for workers' compensation purposes.
How a worker is classified is important because the failure of an employer to have insurance for employees is a serious violation of state law. An injured worker might still be eligible to file a claim for workers' compensation benefits even though an employer does not have coverage.
This posting is intended as an overview of a limited topic under the North Carolina workers' compensation laws. It is not offered as legal advice on the subject of an employer's obligations or a worker's rights under the law.
Answers to questions about eligibility under workers' compensation and legal advice about filing a claim for benefits should only be obtained from an attorney.