For years Dysart Willis has been at the forefront in representing North Carolina businesses who have received a Penalty Assessment Order from the Industrial Commission for failure to carry workers’ compensation insurance. Generally, NCGS § 97-93 requires that any employer with three of more employees have workers’ comp coverage and NCGS § 97-94 allows for a $50 to $100 per day penalty if an employer fails to have such insurance. Additionally, the statute permits potential criminal charges and contempt proceedings. A focused effort by the Industrial Commission to enforce compliance has been in effect since roughly 2013. As discussed on this blog before, beginning in early 2017 the Industrial Commission adopted a punitive approach to these cases which has unnecessarily and unfairly threatened small businesses and business owners.
Fortunately, there appears to be some relief in sight for employers. This afternoon, the NC General Assembly gave final approval to the Senate Bill 99, also referred to as the Appropriations Act of 2018 or “Budget Bill.” While the bill mainly deals with budgetary matters, it revises major portions of NCGS § 97-94. If the bill becomes law, these changes should prove favorable for small businesses facing a penalty from the Industrial Commission for failure to carry workers’ compensation insurance. Of note, the revisions to the statute lower the minimum daily penalty from $50 down to $20. Additionally, the look-back period for which an employer may be penalized is capped at three years. Most importantly, employers who have never been penalized by the Industrial Commission before and, upon notice of noncompliance has obtained the necessary insurance coverage, an alternative penalty structure exists which takes into account payroll information and the cost of the new insurance premium.
The bill will now be presented to Governor Cooper for approval or veto. If passed into law, the bill should provide a common sense approach to the issue of ensuring businesses have the necessary insurance coverage while also allowing for a reasonable penalty formula that doesn’t financially ruin small businesses. The statute contains specific deadlines and submission requirements in addition to potential criminal charges, so employers are encouraged to contact an attorney experienced in handling these types of cases.
If you are a business facing a penalty from the Industrial Commission or have questions regarding your workers’ compensation insurance obligations, contact Dysart Willis. It would be our firm’s privilege to discuss your case and how we can help.