Warner Robins, GA
For most North Carolina workplaces the answer is yes, and the law backs it with daily penalties and criminal charges. Here is who has to carry coverage, who is exempt, and what an injured worker can do when the employer ignored the rule.
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Workers’ compensation in North Carolina is not optional for most employers. The Workers’ Compensation Act draws a line at three employees, requires coverage above it, and puts real consequences behind the requirement: a per-day, per-employee penalty, and felony exposure for the person who could have brought the business into compliance and willfully did not.
The question arrives from business owners deciding whether to buy a policy and from injured workers who just learned the employer has none. Joshua E. Palmer, Attorney at Law represents injured workers across North Carolina, and this page answers both versions: who must carry coverage, who is exempt, what the penalties are, and what an injured worker can do when the coverage is missing.
N.C. Gen. Stat. § 97-2 defines the employment the Act covers. It includes the State and its political subdivisions, and every private employment in which three or more employees are regularly employed in the same business or establishment. The threshold drops to one employee where the work involves the use or presence of radiation. The Act’s definition of employee is broad: every person engaged in employment under a contract of hire, including minors and, in most cases, part-time and family employees.
Agriculture and domestic service are the main exceptions, and even the agricultural exception has a ceiling: farm employers with ten or more regular employees are covered. Genuine independent contractors and certain casual workers are outside the definition of employee, but a mislabeled employee is still an employee; the Commission looks at the actual relationship.
| Employer | Required? | Statute |
|---|---|---|
| Private business with three or more regular employees | Yes | § 97-2(1) |
| Any business with one or more employees working with radiation | Yes | § 97-2(1) |
| State, counties, cities, and other public bodies | Yes | § 97-2(1) |
| Farm employer with fewer than ten regular employees | Generally no | § 97-2(1) |
| Domestic servants in a private home | Generally no | § 97-2(1) |
| Principal contractor using an uninsured subcontractor | Liable for the sub’s workers unless it obtained a certificate of coverage | § 97-19 |
Coverage questions are fact-specific; the Industrial Commission decides disputes about whether an employer or worker is subject to the Act.
N.C. Gen. Stat. § 97-93 gives a covered employer two choices: insure its liability with a carrier licensed in North Carolina, or prove to the Industrial Commission that it has the financial ability to pay benefits directly and be approved as a self-insurer, which is subject to the Commissioner of Insurance. The employer must also post notice of coverage at the workplace.
N.C. Gen. Stat. § 97-94 supplies the consequences. An employer that refuses or neglects to secure coverage is liable for a civil penalty of one dollar for each employee for each day of noncompliance, not less than $20 nor more than $100 per day, running until coverage is obtained. Beyond the penalty, any person with the ability and authority to bring the employer into compliance who willfully fails to do so is guilty of a Class H felony, and one who merely neglects to is guilty of a Class 1 misdemeanor.
You are not without a remedy. The Act still applies to a covered employer that failed to insure, so you can file a claim with the Industrial Commission and the employer, not an insurer, is the one who must pay the benefits. Many uninsured employers cannot pay, which is why the second path matters.
The second path is a civil lawsuit. The exclusive-remedy rule in N.C. Gen. Stat. § 97-10.1 protects only an employer that is subject to the Act and has complied with it. An employer that was required to carry coverage and did not has not complied, and the shield falls away. That means an injured worker can sue the uninsured employer for negligence in superior court, for the full measure of damages the Act does not pay, including pain and suffering. The trade-off is that a negligence suit brings back the defenses the Act removes, including North Carolina’s contributory negligence rule, so the choice between paths is a judgment call a lawyer should make with you.
Mostly no, and that is the point of the system. Benefits under the Act are paid without regard to whose negligence caused the injury, and contributory negligence, the rule that bars an injured person’s ordinary negligence claim in North Carolina, is not a defense to a compensation claim. The exceptions are narrow and statutory. Under N.C. Gen. Stat. § 97-12, no compensation is payable if the injury was proximately caused by the employee’s intoxication, by being under the influence of a controlled substance, or by a willful intention to injure or kill; and benefits are reduced ten percent for a willful failure to use a safety appliance or follow an approved safety rule, or increased ten percent for the employer’s willful failure to comply with a statutory requirement.
Fault comes back in one place. If someone other than the employer caused the injury, such as another driver, a defective machine’s manufacturer, or a different contractor on the site, N.C. Gen. Stat. § 97-10.2 preserves the worker’s negligence claim against that third party, and contributory negligence does apply there. Our North Carolina workers’ compensation lawyer page explains how the two claims run together.
Managing Partner · Joshua E. Palmer, Attorney at Law
Attorney Palmer concentrates in personal injury law and trained in North Carolina law at North Carolina Central University School of Law in Durham. These answers are the ones he gives clients across a desk, written down: direct, in plain English, and tied to the North Carolina rule that applies.
Hurt at work and told there is no coverage? Call for a free case review and we will confirm whether your employer was required to carry it and what that opens up for you.
Responsible attorney: Joshua E. Palmer, Managing Partner · 106 Moran Dr #5106, Bonaire, GA 31005 · (478) 887-3734. Attorney advertising. This page is general legal information about North Carolina law, not legal advice for your situation; contacting the firm does not create an attorney-client relationship.
Whether your employer carried coverage or not, you have a claim. Tell us what happened and we will explain which one. Free consultation, no fee unless we win.
Each case is different. Any results, settlement figures, or benefit amounts described on this page depend on the specific facts of that case and do not guarantee or predict a similar outcome in yours. Statutes and benefit rates cited are current as of September 2026; confirm current law with an attorney before relying on it.