Penalty for Lack of Workers' Compensation Insurance Determined by Law in North Carolina

Margaret Embry

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A former employee of a car wash in North Carolina has sued the car wash business for workers' compensation benefits for injuries sustained in a slip-and-fall accident, according to Risk & Insurance Online. After the accident, the worker was awarded disability benefits and medical benefits, but the employer never obtained a valid workers' compensation insurance policy. This insurance policy is required in North Carolina for all employers with more than three full-time employees. If the employer fails to obtain workers' compensation insurance, a mandatory monetary penalty of $50 per day from the date of the accident is to be collected.

The employee injured at the car wash argued that the penalty should go back to when the business was established in 1988 when the employer initially failed to obtain workers' compensation insurance, as opposed to the Industrial Commission's ruling that the monetary penatly only goes back to the date of the accident. The case was taken to the Court of Appeals which agreed with the employee that the Commission had made an improper calculation and the penalty should go back to 1988. The Court of Appeals noted

that the monetary penalty for failure to secure workers' comp coverage is not within the discretion of the court but is determined by the law. It noted the employer admitted that he never secured workers' compensation insurance for his business.