Dysart Willis represents employers that have received penalties from the North Carolina Industrial Commission under NCGS 97-94 for failure to carry workers’ compensation insurance. There have been a variety of changes to this area of the law over the past twelve months. The good news for employers is that following significant revisions to the law in July 2018, these changes have generally been positive. In some situations, these changes have provided significant relief to employers from the Industrial Commission’s prior aggressive policies.
Employers with three or more employees must still carry an active workers’ compensation insurance policy. However, the revised statute has dropped the daily penalty amount that may be assessed and limits the look-back period for which an employer may be penalized. Failure to carry the necessary insurance can result in a penalty of $20 to $100 per day and may not apply a period of noncompliance occurring more than three years prior to the date of the penalty assessment. There remains the threat of either misdemeanor or felony charges against business owners that either neglect or willfully fail to bring an employer into compliance.
Helpful for most employers is the addition of an alternative penalty provision to the statute. Eligible employers that have been penalized under NCGS 97-94 may file for rescission of the original penalty amount and application of an alternate penalty. The alternate penalty is calculated pursuant to a formula that accounts for the employer’s current premium amount, the number of covered employees, the average number of employees during the alleged period of noncompliance, plus an additional 10% penalty. In most cases, this alternate penalty calculation results in a dramatic decrease as compared to the original penalty amount. Although rare, the alternate penalty may not be helpful and/or the business may not be eligible in which case more creative litigation strategies will need to be explored.
Employers who have received a penalty assessment order from the Industrial Commission are encouraged to contact an attorney experienced in handling these cases. Dysart Willis has successfully helped businesses timely respond to the sensitive deadlines imposed by the Commission, assisted business owners identify their eligibility for an alternative penalty, and taken steps to make otherwise ineligible businesses eligible to apply for an alternate penalty. Additionally, the formula used for calculating an alternate penalty can be confusing and discrepancies often result. In the event of a discrepancy, a hearing before a Deputy Commission may be necessary and it is important that a business owner takes the necessary steps to protect their right to have a hearing and have an experienced attorney advocating for the best possible result.