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N.C. Officials to Review Regulations After a Report that Thousands of N.C. Employers Don’t Buy Workers’ Compensation Insurance

The North Carolina Industrial Commission announced this month that it will begin a review of its own policies and procedures after the Raleigh News & Observer reported that tens of thousands of North Carolina business owners do not buy workers’ compensation insurance, leaving their employees unprotected if they are hurt on the job.

The newspaper reported this month that the state does not track lapses in coverage, even though the Industrial Commission is notified of such instances. The commission also does not usually enforce fines for these violations of the law (up to $100 per day), and cases that are brought before it rarely lead to prosecution or sentencing.

Lack of Protection

 construction worker digging into dirt and rocks while standing in a holeWorkers’ compensation was introduced in the 1930s to protect workers who were injured on the job. In North Carolina, businesses with three or more employees are required to carry the insurance, or they must certify that they have the assets to pay for their liabilities for worker injuries.

However, the report by the Raleigh News & Observer indicated that about 170,000 companies in the state meet this criteria, yet databases show that insurance carriers only covered about 140,000 businesses for workers’ compensation insurance.

When workers are hurt on the job and their employers do not carry workers’ compensation insurance, they can sue their employer or appeal to the N.C. Industrial Commission to get compensation.

In the fiscal year 2011, the commission received 62,409 such claims, and about 75 percent of them were settled through mediation.

Need for Reform

The report by the Raleigh News & Observer noted that the N.C. Industrial Commission has the power to enforce the requirement that businesses carry workers’ compensation insurance, but that it rarely checks for lapses in coverage – which can be monitored through a state-mandated reporting system.

The commission is usually not aware that a business is in breach of the law until an injured worker files a complaint.

This lack of oversight often leaves injured workers struggling to pay mounting medical bills while also being unable to work, and proceedings can go on for years before a resolution is reached. Moreover, according to the article, those businesses who choose not to purchase workers’ compensation insurance often do so in an effort to cut costs and stay afloat, so most would not have enough assets to pay for any injuries should a case be decided in a worker’s favor.

The legislature approved changes to the workers’ compensation system last year but did not address the problem with the lack of coverage. Instead, the new law focused on cutting the amount and length of payment due to injured workers so that the cost of the insurance would go down.

Sen. Doug Berger, D-Franklin, a former deputy commissioner at the Industrial Commission, and a lawyer with the Law Offices of James Scott Farrin, called on Gov. Bev Perdue to make prompt reforms. He told The Charlotte Observer that he will ask Perdue to put reforms in the budget bill for this session.

Berger also said the commission should be required to perform spot checks on workers’ compensation insurance to ensure compliance. He also suggested giving more authority to the Department of Insurance to investigate fraud.

Gov. Bev Perdue called on the commission to make immediate changes to correct the problem.

North Carolina Workers’ Compensation Lawyers

If you were injured on the job, don’t wait to find out if your employer is in compliance of the laws and will be able to provide compensation for your injuries. Call the Law Offices of James Scott Farrin at 1-866-900-7078 to find out how we may be able to help you. We have experienced North Carolina workers’ compensation lawyers who may be able to fight to get you the compensation you may deserve.