AI Insights Key Takeaways
- Most on-the-job injuries in North Carolina are covered by workers' compensation, a no-fault system — benefits without proving your employer was negligent.
- Report the injury to your employer in writing within 30 days and file Form 18 with the NC Industrial Commission within 2 years (N.C.G.S. § 97-22, § 97-24).
- If someone other than your employer caused the injury, you may also have a separate third-party claim (generally a 3-year deadline).
- Schehr Law PLLC helps injured Charlotte workers pursue the benefits and compensation they're owed.
General information, not legal advice. Every case is different — talk to an attorney about yours.
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 determines whether employers are in compliance with G.S. 97-94, along with other related provisions. At Schehr Law PLLC, we understand how much your small business means to you. We also understand that 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. This ensures that if an accident occurs during the scope of an employee’s employment, the employee’s injuries will be covered by the employer’s workers’ compensation coverage. The types of employers who must carry workers’ compensation insurance include:
- Limited liability companies
- Sole proprietors
- Corporations
Certain individuals — such as sole proprietors, members of LLCs, and partners — are not automatically counted as employees. One exception to securing coverage is if the employer qualifies as self-insured for the purpose of paying workers’ compensation employee benefits.
Can I Be Charged Criminally After a Civil Penalty?
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 coverage and willfully or negligently fails to do so may be guilty of a Class H felony or Class 1 misdemeanor.
An investigator through the Industrial Commission may issue a citation that summons an employer into court for criminal charges. An experienced North Carolina attorney 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. Only in certain rare cases will a district attorney decline to dismiss a criminal citation. It is important that an experienced North Carolina attorney evaluate your case before you attempt to handle a criminal citation yourself. An attorney can also appear on your behalf so that you do not need to attend court.
What Is the Fine for Failing to Carry Coverage?
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 employee injured on the job may also seek compensation from the employer.
As you can imagine, the penalty amount can add up quickly. 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 that allowed the employer to continue operating his business.
Can I Reduce the Penalty Amount?
Reducing the penalty amount after receiving a letter from the North Carolina Industrial Commission is a daunting task. Successfully reducing the fine involves providing the commission with substantial required evidence. This evidence includes, but is not limited to, proof of an active workers’ compensation policy, payroll records for the periods of noncompliance, a list of active and prior employees, documentation of the employer’s current premium amount, and other evidence the commission may deem necessary. 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 it notes as an “alternative penalty.” The commission uses a formula to determine the alternative penalty:
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 can 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 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?
Time is certainly of the essence when the Industrial Commission issues a penalty for not having workers’ compensation insurance in North Carolina. Specifically, N.C.G.S. §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 are requested so that your attorney can 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?
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 — meaning we take a percentage of the amount we are able to reduce for your civil penalty. We may also consider other financial arrangements if you ask about them.
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. Call us today to speak with a North Carolina licensed attorney at (704) 900-0336 or contact us online.