Workers Compensation law started in Germany in 1884 under the name "Sickness Insurance". It paid to all private wage earners for up to 13 weeks for work related injuries. In the case of disability, wages were paid by a state guarantee fund after the first 13 weeks. The German Workers Compensation system has been taken as a model all over the world.
Maryland was the first state to pass workers compensation law in 1902 with all states having something in place by 1949. Today workers compensation is still administered on a state by state basis, but all states work with the same basic premise; to pay for the rehabilitation, recovery and medical bills of an employee work related injury. It can also pay for lost time when they are off work due to that work related injury. Workers compensation insurance is not meant to replace health or medical insurance, workers compensation insurance is only for on the job injuries.
According to the Industrial Commission in the state of North Carolina, if an employer has three or more employees (including an owner) it is the law that the employer has Workers Compensation Insurance. So what if an employer has less than three employees? What if they are hurt on the job? Does that mean the employer is not responsible? What if you are an employer and file 1099's on the people who do work for you? The employer would assume they are independent contractors and would ask why there is a need for workers compensation insurance if there are no other employees. But what does the North Carolina Workers Compensation Laws say in each of these instances? Is the employer responsible or not?
The simple answer is YES! The employer is responsible for indemnifying the employee in each of these instances. You have a small upstart business and only have one employee, what happens if they fall off the step stool while putting stock away and twist or break something? What if you are a contractor and have a 1099 person whom does not have their own workers compensation insurance and they get paint splashed in their face while doing a painting job for you? By not being informed, the medical bills could cost the small start up business their bottom line or worse.
If you have specific questions on Workers Compensation Insurance, you should contact your local independent agent for answers on how this type of insurance works.
- Amy Frobish
Workers compensation insurance is mandatory in all states nationwide. You may have heard it called 'workers comp' for short. It's insurance that will provide for medical care for an employee should they get hurt on the job.
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