Short answer: Usually once you regularly employ four or more people. The South Carolina Workers' Compensation Commission counts part-time workers and family members toward that total. Exemptions include businesses with an annual payroll under $3,000, agricultural employees, casual employees, railroads, federal workers, and certain owner-operator drivers and commission-paid real estate agents. Nonprofits follow the same rule.
The four-employee rule
The Commission's employer FAQ says businesses that regularly employ four or more employees in South Carolina must maintain workers' compensation coverage. Its coverage and compliance FAQ confirms that part-time workers and family members count, and that nonprofits are treated the same as for-profit businesses.
What "regularly" means
The Commission's coverage requirements guide explains that courts read "regularly employed" as employing the same number of people with some constancy over a relevant period. With seasonal work, a commissioner decides from the facts whether you regularly had four. Part-time work is not "casual" and does count.
Exemptions under §42-1-360
S.C. Code §42-1-360 excludes:
- Casual employees (occasional work outside the usual course of your business)
- Employers with fewer than four regular employees, or a total annual payroll under $3,000 in the previous calendar year
- Agricultural employees and people selling agricultural products
- State and county fair associations, railroads and railway express companies, and federal employees
- Owner-operator drivers and certain commission-paid real estate agents who meet specific thresholds
The South Carolina Supreme Court held in Lester v. SCWCC (1999) that a business with no payroll in the prior year doesn't qualify for the under-$3,000 exemption. The Commission does not issue exemption certificates.
Contractors
South Carolina's statutory employer rules can make a general contractor liable for an uninsured subcontractor's injured workers. Verify subcontractor coverage before work starts.
Bottom line
Count everyone, including part-timers and relatives. Four regular workers means you need a policy. See our workers' compensation insurance overview.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in South Carolina.
Frequently asked questions
How many employees before workers' comp is required in South Carolina?
Four or more regular employees, counting part-time workers and family members.
Is there a payroll exemption in South Carolina?
Yes. Employers with total annual payroll under $3,000 in the previous calendar year are exempt.
Are nonprofits exempt in South Carolina?
No. Nonprofits with four or more employees must carry coverage.
Are farm workers covered in South Carolina?
Agricultural employees are exempt by statute.
Does the Commission issue exemption certificates?
No. South Carolina's Commission does not issue an exemption form or certificate.
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.