It can be extremely concerning to receive a letter from the North Carolina Industrial Commission stating that you are receiving a penalty for not having workers’ compensation insurance in North Carolina.
The North Carolina Industrial Commission is the commission who determines whether employers are in compliance with G.S. 97-94, along with other provisions related thereto. At Schehr Law PLLC, we understand how much your small business means to you. We also understand that receiving a hefty penalty for noncompliance may put you out of business and subject you to criminal charges.
Although noncompliance with G.S. 97-94 is a serious matter, there are avenues of relief that can help you reduce the penalty amount and potentially dismiss any criminal charges. If you are an employer who received a penalty for not having workers compensation insurance in North Carolina, contact Schehr law PLLC today for help.
Who must obtain Workers’ Compensation Insurance?
According to N.C.G.S. 97-94, employers who employ three or more employees must protect their employees through workers’ compensation insurance. Workers’ compensation insurance ensures that if an accident occurs during the scope of an employee’s employment, that the employee’s injuries will be covered by the employer’s workers’ compensation coverage.
The types of employers who must carry workers compensation insurance are as follows:
– Limited liability companies;
– Sole proprietors; and
Certain individuals such as sole proprietors, members of LLC’s, and partners are not automatically counted as employees. One exception for having to secure workers’ compensation insurance is if the employer qualifies as self-insured for the purpose of paying workers’ compensation employee benefits.
Can I really be charged criminally after receiving a civil penalty for not having workers’ compensation insurance in North Carolina?
Most employers are surprised to hear that they can be charged criminally for failing to secure workers’ compensation insurance for their workers. According to N.C.G.S. 97-94, an employer who is required to secure workers’ compensation insurance and willfully or negligently fails to secure workers’ compensation coverage will be guilty of a class H felony or class 1 misdemeanor.
An investigator through the Industrial Commission may issue a citation which at that time summons an employer into court for criminal charges. An experienced North Carolina attorney will understands how to handle a criminal charge that is issued along with a civil penalty.
Although a criminal penalty is a serious matter, District Attorneys in North Carolina will generally dismiss a criminal citation upon proof of an active workers’ compensation insurance policy and payment of the civil penalty. In certain rare cases will a district attorney not dismiss a criminal citation. It is important that an experienced North Carolina attorney evaluate your case before attempting to handle a criminal citation yourself. Aside from evaluating your case, an attorney can appear on your behalf so that you do not need to attend court.
What is the fine for failing to carry workers’ compensation Insurance in North Carolina?
North Carolina General Statute §97-94 states that any employer who willfully or negligently refuses to secure workers’ compensation insurance shall be punished by a penalty of one-dollar ($1) for each employee, but not less than fifty ($50) dollars, nor more than one hundred ($100) dollars for each day of such refusal or neglect. Not only will a fine be assessed, but any injury that occurs to an employee on the job may seek compensation from the employer.
As you can imagine, the penalty amount can add up quick. For example, our office received a case where the penalty amount was more than ninety thousand dollars. We were able to secure a significant reduction which allowed the employer to continue operating his business.
Can I reduce the penalty amount for not having Workers’ Compensation Insurance in North Carolina?
Reducing the penalty amount after receiving a letter from the North Carolina Industrial Commission is a daunting task. In order to successfully reduce the fine involves providing the commission with substantial amounts of required evidence.
This evidence includes, but is not limited to, compliance with an active workers’ compensation policy, payroll records for the periods during noncompliance, a list of active and prior employees, the documentation of the employers current premium amount, and other evidence that the commission may deem necessary. In addition, submitting the evidence through the North Carolina Electronic Filing System is a task in and of itself.
The North Carolina Industrial Commission uses another word for reducing the penalty which they note as an “alternative penalty.” The North Carolina Industrial Commission uses a formula used to determine the alternative penalty. The formula is stated as so:
The annual cost of the current policy divided by the number of employees covered by the current policy multiplied by the average number of employees during the period of noncompliance, plus a ten percent penalty.
A North Carolina attorney will be able to compile all of the above evidence and submit an alternative penalty request to the North Carolina Industrial commission. Generally, if the employer is eligible for an alternative penalty, the reduction in the penalty amount is substantial. If the Industrial Commission is unwilling to change the penalty amount, other litigation strategies may be worth considering.
How fast do I need to act after receiving a penalty for not having workers’ compensation Insurance in North Carolina?
Time is certainly of the essence when the Industrial Commission issues a penalty for not having workers’ compensation insurance in North Carolina. Specifically, NCGS §97-94 states that once a penalty is issued administratively, an employer has 30 days to request a hearing, request a review, and submit an appeal. It is imperative that a review and appeal is requested in order for your attorney to request the required evidence.
Failure to act quickly may result in the Industrial Commission noting your civil penalty amount as final.
How much will an attorney cost for this issue?
At Schehr Law PLLC, we do not charge anything upfront to handle your case. We work on a contingency fee basis for these types of cases. That means that we will take a percentage of the amount we were able to reduce for your civil penalty. However, we may also consider other financial agreements if inquired about.
Should I contact an attorney?
It is imperative that you contact an experienced attorney who has worked with these types of cases and understands the online filing system. Schehr Law PLLC handles these cases in volume, and we feel confident that we can reduce your penalty amount to a satisfactory level. Give us a call today to speak with a North Carolina licensed attorney.