The North Carolina Workers’ Compensation Act requires non-exempt employers with three or more employees to carry insurance for their employees or employees’ family in case they are injured or killed in the course of their duties. The North Carolina Industrial Commission is tasked with overseeing employers to make sure they are complying with the Act. Employers who do not comply can be subject to stiff financial penalties, charged with a misdemeanor, charged with a felony, and imprisoned. North Carolina’s State Auditor recently published their findings assessing whether the Industrial Commission is effectively ensuring compliance with the Act.
The audit found the Commission does not have the adequate data to identify, locate, and punish employers who are not carrying workers’ compensation insurance. Two main sources could aid the Commission in their search for non-compliant employers, but the Division of Employment Security (Employment Security) and the North Carolina Rate Bureau (Rate Bureau) have significant differences in their data. These differences prohibit the Commission’s ability to reliably match data and identify non-compliant businesses. The Commission is also failing to use the data available to track and punish businesses who have allowed their workers’ compensation insurance to lapse.
These findings are alarming because it leaves numerous North Carolina employees at risk in the event they are injured. Employees may file a notice to North Carolina’s workers’ compensation fraud department that their employer is non-compliant, but that does not help the employee or employee’s family with large medical bills or funeral expenses in the interim. Employees are left extremely vulnerable after operating under the assumption that they would be covered under the state-mandated coverage.
Before May 2012, the Commission was not assessing penalties and fines UNTIL a worker was injured. It was only used as a bargaining tool, allowing an employer to decide between payment of the worker’s medical expenses or payment of the fine, and not truly punished for allowing the circumstance to occur in the first place. After May 2012, the fines were assessed once the violation was discovered, but fines were not collected, which deprived the state of needed funds for the school system. So far, all have fallen short of pre-emptively deterring lapses in coverage that can deprive an injured worker or deceased worker’s family from needed funds. In response, the Commission has agreed to the findings and recommendations that the audit produced in its report. They have pledged to make the corrections and work with the Office of the Attorney General to enforce and collect penalties.
Normally, when a worker is injured or killed while performing an employment duty, they are generally precluded from suing the company for personal injury since the company has already provided for their expenses through workers’ compensation insurance. If an employer fails to provide coverage and an injury occurs during this period, then they may have lost their immunity to a personal injury action. With a personal injury action there is the potential for punitive damages under North Carolina law on top of compensation for lost wages, medical bills, and other expenses incurred as a result of the injury.
Auger & Auger are experienced workers’ compensation and personal injury attorneys who will pursue every avenue of legal relief. They handle North Carolina workers’ compensation claims and know what documentation must be produced so that your compensation is maximized. If your employer has neglected to maintain their state mandated insurance coverage, the attorneys at Auger & Auger will swiftly act to hold all parties accountable. If you would like to speak with one of our attorneys about your workers’ compensation or personal injury claim, call for a free consultation at (800) 559-5741.
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