Short answer: Yes. With limited exceptions, North Dakota requires every employer to insure all employees, full-time, part-time, seasonal and occasional, before they start work. Coverage comes only from Workforce Safety & Insurance (WSI), the state agency that is the sole provider. Private insurers can't write it. Uninsured employers owe back premium, claim costs and penalties.
One provider, no private market
According to WSI's coverage requirements page, WSI is "the sole provider and administrator of workers' compensation in North Dakota," an employer-financed, no-fault system, and North Dakota law doesn't allow private insurers to underwrite workers' comp in the state.
The core rules
From WSI:
- All employees, before they begin. With limited exceptions, every employer must cover full-time, part-time, seasonal and occasional workers before they start working.
- Apply first. Under N.D.C.C. §65-04-33, an employer can't employ anyone in hazardous employment without first applying to WSI, describing the work and estimating the next 12 months' payroll.
- No premium deductions. It's unlawful to deduct any part of the premium from wages.
- No waivers. An employee's agreement to waive rights to compensation isn't valid.
WSI defines "employer" broadly, including corporations and their officers, partnerships and partners, and LLCs and their managers.
Who's exempt
WSI's common questions page lists employment exempt from Title 65:
| Exempt | |
|---|---|
| Owner, partner, corporate officer, or their spouse | Employer's children under 22 |
| Certain licensed real estate brokers | Newspaper delivery personnel |
| Farm and ranch labor | Certain custom farm operations |
| Household domestic workers | Workers in the operation of a place of worship |
| Federal and railroad employees |
Except for federal and railroad employees, an employer can buy elective coverage for itself and for otherwise exempt workers. It starts when WSI approves the signed application.
Out-of-state employers working in North Dakota
An out-of-state employer must buy WSI coverage if it has significant contacts with North Dakota or hires workers there. Significant contacts exist when:
- any employee earns, or is expected to earn, 25% or more of their gross annual wages from that employer for work in North Dakota; or
- 25% of the employer's gross annual payroll is for work in North Dakota.
Hiring someone in North Dakota for work there also triggers WSI coverage.
North Dakota employers working elsewhere
WSI is a state agency, not an insurance company, so it can't write coverage for exposure outside North Dakota. It may provide limited coverage for North Dakota-based employees working out of state for no more than 30 consecutive calendar days. If you hire employees to work in or from another state, including remote staff, you need workers' comp coverage in that state.
Independent contractors are presumed employees
Under N.D.C.C. §65-01-03(1), anyone performing services for pay is presumed to be an employee unless shown to be an independent contractor under the common-law test. The person claiming contractor status carries the burden of proof. A WSI determination that someone doesn't need coverage lasts no more than one year, and WSI can reconsider it at any time. WSI offers a questionnaire to verify status.
What going uninsured costs
From WSI's failure to secure coverage page:
- Back premium for the uninsured period, plus penalties and interest.
- The actual cost and reserves of any claims during that period.
- Lawsuits by injured workers for damages from injuries while you were uninsured.
- A cease and desist order, with a $10,000 penalty plus $100 per day the violation continues (N.D.C.C. §65-04-27.2).
- $5,000 plus $100 per day for a contractor that willfully uses a sub barred by a cease and desist order.
Under §65-04-26.2, workers of an uninsured sub or independent contractor are deemed employees of the general contractor, which is liable for unpaid premium and penalties for work under that contract. WSI may ask for your sub list at any time.
Staying in good standing
- Report payroll and volunteer information through myWSI.
- An account in good standing receives a Certificate of Payment, your proof of coverage.
- Employers are billed monthly for their share of medical expenses on claims, called medical assessments.
Bottom line
North Dakota coverage is mandatory and comes only from WSI. Your risk is in the gaps: remote and traveling employees, and subs. Read more about workers' compensation insurance.
Contact Alishahi Insurance or call (877) 711-4545. More on insurance in North Dakota.
Frequently asked questions
Is workers' comp required in North Dakota?
Yes. With limited exceptions, every employer must insure all employees through WSI before they begin work.
Can I buy North Dakota workers' comp from a private insurer?
No. WSI is the sole provider, and state law doesn't allow private insurers to underwrite it.
Do North Dakota business owners need workers' comp?
Owners, partners, corporate officers and spouses are exempt, but they can buy elective coverage from WSI.
Does WSI cover employees working in other states?
Only in limited cases of up to 30 consecutive days. Employees working in or from other states need coverage there.
What is the penalty for no workers' comp in North Dakota?
Back premium, penalties, interest, claim costs, possible lawsuits, and $10,000 plus $100 a day under a cease and desist order.
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.