What businesses are required to carry workers’ comp insurance in SC, and how do you know if your employer is one?
Below, we will go over the basics of employers’ responsibility to carry workers’ compensation insurance, including:
- Which businesses are required to carry workers’ comp insurance,
- Exceptions to SC’s workers’ comp requirements, and
- How you can get compensation for on-the-job injuries if your employer is not insured.
Who is Required to Carry Workers’ Compensation Insurance?
SC Code § 42-1-150 requires all employers to carry workers’ compensation insurance if they are:
- The State,
- A political subdivision of the State,
- A public or quasi-public corporation, or
- A private employer with four or more employees.
Exceptions, found in SC Code § 42-1-360, include:
- Employment of “casual employees,”
- Employers with less than four regular employees or whose payroll in the previous calendar year was less than $3000 regardless of the number of employees,
- State and county fair associations unless they voluntarily elect to carry workers’ compensation insurance,
- Agricultural employers unless they voluntarily elect to carry workers’ compensation insurance,
- Railroad or railway express employers,
- Employers “engaged in selling any agricultural product for a producer of them on commission or for other compensation, paid by a producer, when the product is prepared for sale by the producer,”
- Employers of “a licensed real estate sales person engaged in the sale, leasing, or rental of real estate for a licensed real estate broker on a straight commission basis and who has signed a valid independent contractor agreement with the broker,”
- Federal employees, and
- Employers of “an individual who owns or holds under a bona fide lease-purchase or installment-purchase agreement a tractor trailer, tractor, or other vehicle, referred to as “vehicle”, and who, under a valid independent contractor contract provides that vehicle and the individual’s services as a driver to a motor carrier.”
If a Policy is Issued to the Employer…
SC Code § 42-5-80 states that if an insurer issues a workers’ compensation policy to an employer, the insurance company must pay valid claims, and they are liable to the person who is entitled to compensation (the employee) as opposed to the employer:
(A) No policy of insurance against liability arising under this title may be issued unless it contains the agreement of the insurer that it will promptly pay to the person entitled thereto all benefits conferred by this title, and all installments of the compensation that may be awarded or agreed upon, and that the obligation shall not be affected by any default of the insured or by any default in giving notice required by such policy or otherwise.
(B) Such agreement must be construed to be a direct promise by the insurer to the person entitled to compensation enforceable in his name.
(C) Any insurer who issues a policy of compensation insurance to an employer not subject to this title may not plead as a defense that the employer is not subject to this title and is estopped to deny coverage.
Even if your employer was not required to carry workers’ comp insurance, that is not a defense that would allow the insurance company to get out of paying your claim.
The insurance company is also required to pay your claim even if your employer has defaulted on their premium payments or if your employer failed to give proper notice to the insurance company – although your employer is contractually required to pay the premiums to the insurance company, the insurance company is liable to you, the employee.
What Can You Do if Your Employer Does Not Have Workers’ Comp Insurance?
What if your employer does not have workers’ compensation insurance even though it is required under state law?
How Do You Get Compensation if There is no Workers’ Comp Insurance?
There are two ways that you may be able to get compensation for on-the-job injuries if your employer does not carry workers’ compensation insurance.
A personal injury lawsuit. If your employer carries workers’ comp insurance, they are protected from lawsuits for on-the-job injuries.
SC Code § 42-1-540 says that the rights and remedies granted by SC’s workers’ comp laws “exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer, at common law or otherwise, on account of such injury, loss of service or death.”
If your employer does not carry workers’ comp insurance, however, they are not protected from lawsuits, and you are free to pursue all available remedies under SC law including a personal injury lawsuit for negligence.
Even if there is no cause of action for negligence on the part of the employer, the employee can still seek payment from the employer under SC Code § 42-5-40 for payment of compensation that the employee would have been entitled to under SC workers’ compensation laws.
The SC Uninsured Employer’s Fund (UEF). In some cases, you may be able to seek compensation from the UEF when your employer does not have the required workers’ comp policy.
The UEF can deny your claim just as your employer and their insurance company can deny claims, in which case you will need to request a contested case hearing and present evidence to the Workers’ Compensation Commission.
Penalties for Employers Who Do Not Carry Workers’ Compensation Insurance
Employers who do not secure payment of compensation for injured employees when they are required to do so by SC law can be punished by fines or even jail time, and they are subject to employee lawsuits for compensation.
SC Code § 42-5-40 says that:
Any employer required to secure the payment of compensation under this title who refuses or neglects to secure such compensation shall be punished by a fine of one dollar for each employee at the time of the insurance becoming due, but not less than ten dollars nor more than one hundred dollars for each day of such refusal or neglect, and until the same ceases, and he shall be liable during continuance of such refusal or neglect to an employee either for compensation under this title or at law in an action instituted by the employee or his personal representative against such employer to recover damages for personal injury or death by accident…
In addition to fines and the potential for employee lawsuits, SC Code § 42-5-45 makes willfully refusing to secure compensation a misdemeanor offense punishable by a fine of up to $1000 or no less than 30 days and up to six months in jail.
Your workers’ comp attorney on the Axelrod team can help you to determine whether your employer is required to carry workers’ compensation insurance and how to get compensation if your employer does not carry workers’ comp insurance. We are also available to help you prepare and file your workers’ comp claim and to represent you in any appeals before the Workers’ Compensation Commission and courts.