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North Carolina drops the ball on workers' compensation insurance

Carolina law requires employers with three or more employees to either purchase workers' compensation insurance, or certify to the state that they have the resources to cover the costs of employee injuries. While that may seem like a reasonable and effective proposition, the reality faced by more and more injured North Carolina workers is not so worker friendly.

According to a recent Charlotte News Observer analysis of Rate Bureaus insurance policy records, roughly 30,000 of the more than 170,000 North Carolina companies required to purchase workers' compensation insurance don't appear to have it and haven't certified as self-insured either.

So what happens if a worker is injured and finds out his or her employer is uninsured?

The good news is that workers who find themselves in this situation can still take their case to the North Carolina Industrial Commission, which is responsible for the oversight of workers' compensation claims and the enforcement of insurance requirements. If the worker wins at that hearing, the NCIC will likely issue an award for medical expenses and wage losses. When it comes to actually collecting such awards, however, injured workers often receive little help.

Although some employers play by the rules and voluntary pay injured workers the awards they are due, injured workers who want to collect the compensation they deserve must usually obtain a state court judgment against an employer or convince the NCIC to find the employer in contempt and demand payment.

NCIC collection efforts (if they undertake any) can go on for years and are ineffective in many cases. One reason why is that uninsured businesses tend to be smaller in size and do not have the money to pay. Instead, they will often file for bankruptcy and get NCIC awards discharged as a result -- leaving injured workers with nothing.

The question we're left with here is this: What good does it do to require employers to purchase workers' compensation insurance when the North Carolina Industrial Commission doesn't seem to want to use the power it has to enforce the state's laws or its own orders?

Source: The Charlotte Observer, "When N.C. employers dodge workers' comp costs, employees pay the price," Mandy Locke and David Rayner, April 1, 2012

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