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Do all employers have to carry workers' compensation insurance?

Most employees in North Carolina receive the benefit of workers' compensation coverage -- even most undocumented immigrants. However, it's important for all workers to understand that some categories of employers are exempt from the need to insure or qualify as self-insured when it comes to workers' compensation.

Here is a brief overview of workers' compensation coverage requirements in the state of North Carolina:

The legal requirement for workers' compensation insurance

The law in North Carolina requires all businesses that employ at least three or more workers -- with some exceptions listed below -- to cover their workers with a qualifying workers' compensation policy. Alternatively, businesses with sufficient assets can self-insure their workers.

In some cases, the three worker rule will not apply to a business. Here are some examples in which the three-worker rule does not apply:

  • Businesses that use radiation or businesses that maintain workplaces in which at least one employee could be exposed to radiation must have workers' compensation insurance.
  • Companies that perform logging work and run sawmills do not need to have workers' compensation insurance if they employ fewer than 10 workers, engage in logging and sawmilling activities for fewer than 60 days within a six-month period and have a principal business that isn't related to logging and sawmilling.
  • Federal government employers are exempt from this requirement because federal workers are covered by workers' compensation via the Department of Labor.

Employees who qualify for workers' compensation benefits

Any worker classified as an "employee" must receive workers' compensation coverage and benefits. North Carolina law classifies the following as employees:

  • Anyone engaged in employment through appointments, apprenticeships and contracts for hire that are expressed, implied, written or oral.
  • Employees also include people who are unlawfully employed, such as undocumented workers and minors.
  • Employees include people performing part-time, temporary and seasonal jobs.

Workers don't qualify for workers' compensation benefits

Some workers will not qualify as employees and cannot receive workers' compensation benefits. These individuals include:

  • Workers' classified as "casual employees," which covers those who are employed casually and not engaged in doing the primary work of the company that employs them, will not be covered by workers' compensation.
  • Domestic servants performing childcare, cleaning and other services for a household will not receive the benefit of workers' compensation.
  • Some railroad employees are disqualified from receiving workers' compensation benefits. Often, railroad workers receive other injured worker coverage and benefits.

Do you want to know if you're covered by workers' compensation benefits?

It's important to understand before you take on a new job whether you are covered by workers' compensation benefits. If there is any question about your eligibility for this vital employee medical benefits coverage, investigate your employment rights carefully before you take on a new employment position.

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