Short answer: Usually once you regularly employ three or more people. The North Carolina Industrial Commission says corporate officers count toward that total, so two officers plus one employee triggers coverage. Any business with radiation exposure must cover even one employee, and farms are covered at 10 full-time nonseasonal workers. Sole proprietors and LLC members don't automatically count.
The three-employee rule
N.C. Gen. Stat. §97-2 and §97-13 apply the Workers' Compensation Act to private employers that regularly employ three or more employees in the same business in the state. The Industrial Commission's employer page says those employers must buy insurance or qualify to self-insure.
Who counts
- Corporate officers count. The Commission gives the example that a corporation with two officers and one employee must carry coverage. Officers can exclude themselves from the policy, but they still count.
- Sole proprietors, partners and LLC members don't automatically count, though they can elect coverage for themselves.
- Part-time employees who work regularly count toward the three.
Exceptions to the three-employee rule
- Radiation: an employer with even one employee whose work involves the use or presence of radiation must have coverage.
- Farms: agricultural employers are exempt unless they regularly employ 10 or more full-time nonseasonal farm workers.
- Sawmill and logging: operators with fewer than 10 employees who saw and log fewer than 60 days in any six consecutive months, and whose main business is something else, are exempt.
- Domestic workers and casual employees are excluded, as are federal employees.
Contractors and trucking
Principal contractors should collect a certificate of coverage from every subcontractor, regardless of headcount. Under the statute, a contractor that hires an uninsured subcontractor can become liable for that subcontractor's injured workers. The Commission's employer presentation highlights a specific rule for trucking: a contractor that hires an owner-operator who hasn't insured himself can be treated as the employer for that driver's injuries.
Voluntary coverage
An employer below the threshold that buys a policy is presumed to have accepted the Act while the policy is in force. That gives small employers the same lawsuit protection larger ones have.
Bottom line
Count officers, watch for radiation or contractor exposure, and don't rely on the three-employee rule if you hire subcontractors. See our workers' compensation insurance overview.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in North Carolina.
Frequently asked questions
How many employees before workers' comp is required in North Carolina?
Generally three or more regular employees, counting corporate officers.
Do corporate officers count in North Carolina?
Yes. Officers count toward three even if they exclude themselves from coverage.
Are farms required to carry workers' comp in North Carolina?
Only when they regularly employ 10 or more full-time nonseasonal farm workers.
Is there an exception for radiation work?
Yes. Any employer with one or more employees whose work involves radiation must have coverage.
Can a contractor be liable for an uninsured subcontractor?
Yes. Contractors should get certificates of coverage from subcontractors to avoid liability for their injured workers.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.