If you are an employer who recently received a Penalty Assessment Order from the North Carolina Industrial Commission, you have likely been caught by surprise and have questions. Financially crippling penalties along with the threat of criminal charges is a situation more and more NC companies are facing since the Industrial Commission has stepped up non-insurance enforcement and compliance efforts.

Most North Carolina employers are required to have workers’ compensation insurance coverage as detailed in NCGS 97-93 and 97-94, which also contains the consequences for failure to obtain such coverage. In addition to financial penalties, an employer can face criminal charges for either willful or negligent failure to secure insurance. Penalties typically run $50 each day the business is operating without workers’ comp insurance but may be as much as $100 per day under the statute. While criminal charges usually aren’t pursued against first time offenders, business owners that have faced assessments previously or have failed to bring their companies into compliance can be charged with either a Class H felony or Class 1 misdemeanor.

With some nuanced exceptions, employers with three or more either part-time or full-time employees are required to have workers’ compensation insurance on file with the state. If you are unsure about whether your business is required to have a workers’ compensation policy, you are encouraged to contact an attorney who can provide additional information. Additionally, far too many employers believe they have coverage only to learn that at some point their insurance agent failed to renew that portion of the policy.

The Industrial Commission has recently become more aggressive in its efforts to enforce these statutes. Non-insured business owners targeted by the IC will receive a Penalty Assessment Order that often demands payment of tens of thousands of dollars. The employer may request a hearing within 30 days to contest the penalty at which point the case will be docketed before a deputy commissioner for argument, which is generally held in Raleigh. In the event of a hearing request, the Attorney General’s office takes over the file and represents the State in the proceedings.

Penalty assessments and criminal charges for non-compliance can often be either challenged or resolved through negotiation, but it is in your interest to retain an attorney experienced in this specialized area. Dysart Law proudly represents North Carolina employers in these types of cases and has saved businesses hundreds of thousands of dollars in assessed penalties. Feel free to contact our office to learn more information and discuss your case.