CHARLOTTE, N.C. - Nearly 70,000 workers across North Carolina were hurt or killed on the job last year, and although many people assume their employers have workers' compensation insurance to cover medical bills and lost wages, an Action 9 investigation uncovered tens of thousands of businesses may not.
The magic number is three.
North Carolina law says that if you have three employees -- either full-time or part-time -- you must have workers' comp.
If the employer was negligent, it is a misdemeanor, but if willful, it's a felony.
Below is the actual legal definition of the law:
The North Carolina Workers' Compensation Act requires that all businesses that employ three or more employees, including those operating as corporations, sole proprietorships, limited liability companies and partnerships, obtain workers' compensation insurance or qualify as self-insured employers for purposes of paying workers' compensation benefits to their employees. Exceptions to this requirement include (a) employees of certain railroads; (b) casual employees, i.e., persons whose employment is both casual and not in the course of the trade, business, profession or occupation of the employer; (c) domestic servants directly employed by the household; (d) farm laborers when fewer than 10 full-time, non-seasonal farm laborers are regularly employed by the same employer; (e) federal government employees in North Carolina; and (f) "sellers of agricultural products for the producers thereof on commission or for other compensation, paid by the producers, provided the product is prepared for sale by the producer.”
"I always thought if you get into trouble you're automatically covered."
When employers don't have workers’ comp the results can be devastating.
Larry Burns was making a delivery when he slipped, fell and broke his leg.
"When I sat up straight and I looked down at my foot, I seen this foot was up and this one was turned around," he said.
Burns’ employer had more than three employees, so, legally, it should have had workers' comp insurance in North Carolina, but it didn't.
It never even crossed Burns’ mind that that he wouldn’t be covered.
“I didn't think nothing about it,” he told Action 9’s Jason Stoogenke. “I always thought if you get into trouble, you're automatically covered."
Burns told Stoogenke that his bills piled up and he couldn't pay rent. He said he lost his apartment and then his marriage.
"It can cause you to lose everything you have and leave you crippled if it's bad enough," Burns said. "I didn't know how important it was until I actually been a victim of it."
Make sure your employer has workers' comp. It may be awkward, but ask.
Don't let the business call you a "contractor" if you're an actual employee. Some do that to avoid the law. That way, it looks like they don't have the three workers required for them to have to carry workers' comp. It's a tactic called "misclassification."
How do you know which you are?
Contractor vs. Employee:
Contractor: You set your own schedule, have your own tools, get paid by the project or can work for other employers.
Employee: You have a set schedule, need permission for days off, use company equipment or get paid hourly or have a set salary.
Call 888-891-4895 to report employers breaking the law, or email FraudComplaints@ic.nc.gov.
Who is policing this?
According to a recent state audit, as many as 52,000 employers in North Carolina should have had workers' comp insurance and did not. The audit blames the agency in charge of policing it, the N.C. Industrial Commission, for not doing a better job.
Stoogenke asked the commission's director of compliance and fraud investigations, Bryan Strickland, why they aren’t catching more of the employers.
Strickland said that he joined the agency in 2013 and has made sweeping changes, the biggest being a new database that flags employers who may be skirting the law. He said that the numbers show it's working.
Before Strickland arrived, the commission charged about 10 employers with breaking the law and collected $374,000 in fines. Last year, it charged about 150 employers and collected almost $1.5 million.
Since July, the commission has already charged more than 210 employers.
"So we've already done more in six months than we did all entire last year," Strickland said.
Charlotte-area employers fined
Stoogenke filed a formal request for the list of Charlotte-area employers that the commission fined last fiscal year, and found out that there were 40.
The list was comprised of more than just factories or construction companies, and included an insurance company that sells workers' comp, a dentist, cleaning services, a towing company and a south Charlotte baker, Emma Cromedy.
Stoogenke asked Cromedy why she didn't have workers' comp insurance.
"At the time, I had it, but I let it lapse," she said. "I just couldn't afford it, so I just didn't get it."
The commission fined her $3,000.
She no longer has three employees, but told Channel 9 that she bought the insurance so she doesn't run into that problem again.
Martha Ramsay is a workers' comp lawyer and represents people hurt on the job, even Carolina Panthers players. She said that when employers should have insurance and don't, taxpayers pay.
"When my folks get injured, they have to seek, looking for free medical treatment,” she told Channel 9. ”They’re going to hospitals trying to get care. They may be applying for Medicaid. They may have to apply for Medicare."
Burns is one of her clients. They won his case, but have had trouble getting the employer to pay.
Ramsay said the employer paid $7,000, but then stopped, and that the justice system is having difficulty finding him.
They told the court that the business still owes Burns more than $100,000 in workers' comp.
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