Worker’s Compensation Laws provide a legal framework for workers to be compensated for injuries sustained in the course of their employment. Procedures for submitting claims and decision making on compensability rest with the North Carolina Industrial Commission who administers the state worker’s compensation system.
The North Carolina Workers’ Compensation Act requires that all businesses that employ three or more employees carry workers’ compensation insurance for their employees.
Exceptions to the Three-Employee Rule
N.C. Gen. Stat § 97-13 provides that the following classes of employees are not required to have worker’s compensation insurance provided by their employer:
(a) employees of certain railroads;
(b) casual employees, i.e., individuals who do not perform “work pertaining to the regular course of defendant’s business”;
(c) domestic servants directly employed by the household;
(d) farm laborers when fewer than 10 full-time, non-seasonal farm laborers are regularly employed by the same employer;
(e) federal government employees in North Carolina; and
(f) “sellers of agricultural products for the producers thereof on commission or for other compensation, paid by the producers, provided the product is prepared for sale by the producer.”
Further, any employer who provides agriculture or domestic services, with 10 or more full-time, non-seasonal workers is not required to carry worker’s compensation coverage. N.C. Gen. Stat § 97-13 (b).
However, any company with one or more employees who work with radiation must provide worker’s compensation coverage. N.C. Gen. Stat § 97-13 (b).
Casual employees are defined in N.C. Gen. Stat § 97-2 as persons whose employment is “not in the course of the trade, business, profession, or occupation of his employer“ Put simply, employment is casual when it is not permanent or when work is not assigned periodically, even if the employment is brief or isolated. Further, “employment is casual when it is irregular, unpredictable, sporadic and brief in nature. Clark v. Mills, Inc., 12 N.C.App. 535, 183 S.E.2d 855 (1971).
To be entitled to workers’ compensation benefits, the claimant must be, in fact and in law, an employee and not an independent contractor. Hicks v. Guilford County, 267 N.C. 364, 148 S.E.2d 240 (1966)
An independent contractor is defined as “one who exercises an independent employment and contracts to do certain work according to his own judgment and method, without being subject to his employer except as to the result of his work.” Cooper v. Publishing Co., 258 N.C. 578, 129 S.E.2d 107 (1963).
North Carolina courts have identified eight factors to consider in determining which party retains the right of control and, thus, whether the claimant is an independent contractor or an employee:
The person employed
(a) is engaged in an independent business, calling, or occupation;
(b) is to have the independent use of his special skill, knowledge, or training in the execution of the work;
(c) is doing a specified piece of work at a fixed price or for a lump sum or upon a quantitative basis;
(d) is not subject to discharge because he adopts one method of doing the work rather than another;
(e) is not in the regular employ of the other contracting party;
(f) is free to use such assistants as he may think proper;
(g) has full control over such assistants; and
(h) selects his own time.
Hayes v. Board of Trustees of Elon College, 224 N.C. 11, 15, 29 S.E.2d 137, 140 (1944)
N.C. Gen. Stat. § 97-19.1 requires that workers’ compensation coverage be in place to cover certain trucking owner/operators, even if the operator is deemed to be an independent contractor.
Who May Claim Worker’s Compensation Benefits
In order to receive worker’s compensation benefits an injury must be “compensable.” In North Carolina, a person must have either sustained an “injury by accident” or have an “occupational disease” to have their claim be deemed compensable. Unlike a personal injury claim, which focuses on whether an individual was injured because of a breach of the duty of care, worker’s compensation law resolves the question of liability through the concept of compensability. Compensability does not consider the employer’s conduct as determinative of compensability rather it focuses on whether an employee suffered an injury or occupations disease and whether that injury or occupational disease arose out of the course of employment.
North Carolina Courts have interpreted the Worker’s Compensation Act as requiring three elements to establish “compensability:”
- [t]hat the injury was caused by an accident;
- that the injury arose out of the employment; and
- that the injury was sustained in the course of employment.”
Further, the compensability analysis requires an injury “disabled” the employee. Hendrix v. Linn-Corriher Corp., 317 N.C. 179, 185, 345 S.E.2d 374, 378. Disability means “incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or any other employment.” N.C. Gen. Stat. § 97-2(9).
North Carolina Courts interpret the Worker’s Compensation Act as requiring the employee to prove the following in order to support a conclusion of disability. The employee must prove:
- he or she was incapable after his or her injury of earning the same wages he or she had earned before his or her injury in the same employment,
- he or she was incapable after her injury of earning the same wages he or she had earned before his or her injury in any other employment, and
- his or her incapacity to earn was caused by his or her injury.
“Injury by Accident”
The first element of compensability involves an “injury by accident” or an unusual or unexpected event that arise in the workplace. North Carolina Courts have construed this to mean an injury occurring unexpectedly from the operation of internal or subjective conditions, without the prior occurrence of any external event of an accidental character. Stokes v. First National Bank, 410 S.E.2d 248, 306 S.C. 46 (1991). Similarly, an injury that arises from normal work conditions will be treated as an injury by accident. “No matter how great the injury, if it occurred under normal working conditions and the employee was injured while performing his regular duties in the usual and customary manner, no accident has occurred.” Swindell v. Davis Boat Works, Inc., 337 S.E.2d 592, 78 N.C. App. 393 (Ct. App. 1985).
“Arises out of employment”
A compensable injury must arise from a condition that is the natural and probable consequence of the work being conducted. Gallimore v. Marilyn’s Shoes, 292 N.C. 399, 402, 233 S.E.2d 529, 531 (1977).
If the injury arises from a hazard that is common to the public and not specific to the employment, it does not arise out of the employment and thus not compensable. Roberts v. Burlington Industries, 86 N.C.App. 126, 356 S.E.2d 794 (1987).
“Sustained In the Course of Employment”
Lastly, an injury by accident must be sustained in the “course of employment.” To determine the “sustained in the course of employment” element key issue is whether, at the time of the injury, was the employee was doing what the employer hired him to do. Generally, the employee must be engaged in conduct authorized by the employer and intended to benefit the employer’s business, directly or indirectly. Gallimore v. Marilyn’s Shoes, 233 S.E.2d 529, 292 N.C. 399 (1977). Roberts v. Burlington Industries, Inc., 356 S.E.2d 794, 86 N.C. App. 126, 321 N.C. 350 (Ct. App. 1987).
Compensation for Occupational Diseases
Under the Worker’s Compensation Act, certain occupational diseases are compensable.
The list of occupational diseases is provided in N.C. Gen. Stat. §97-53. However, employees who do not suffer from one of the listed occupational diseases may still qualify for benefits under the “catch all” provision found at N.C. Gen. Stat. §97-53, which states that a compensable occupational disease may also be:
Any disease, other than hearing loss covered in another subdivision of this section, which is proven to be due to causes and conditions, which are characteristic of and peculiar to a particular trade, occupation or employment, but excluding all ordinary diseases of life to which the public is equally exposed outside of the employment.
Further North Carolina Courts have held that in order to receive workers’ compensation benefits for having contracted an occupational disease, a claimant must prove the following six elements:
(1) a disease; (2) the disease “must arise out of and in the course of the claimant’s employment”; (3) the disease is due to hazards in excess of those hazards that are ordinarily incident to employment; (4) the disease is peculiar to the occupation in which the claimant was engaged; (5) the hazard causing the disease is one recognized as peculiar to a particular trade, process, occupation, or employment; and (6) the “disease must directly result from the claimant’s continuous exposure to the normal working conditions of the particular trade, process, occupation, or employment.”
Under N.C. Gen. Stat. §97-2(18) for a hernia to be a compensable the injury must result in the sudden appearance of a hernia (or rupture) that develops immediately following an accident. The hernia must not have been there prior to the accident.
To establish a hernia claim a claimant must prove:
- an injury resulting in a hernia or
- which appeared suddenly,
- immediately following a work-related accident, and
- did not exist prior to the accident.
Types of Worker’s Compensation Benefits
The North Carolina Workers’ Compensation system pays benefits that can be classified into the following five areas of cash benefits and wage replacement benefits that apply to situations of varying severity of injury and subsequent level of disability.
Temporary Total Disability
An employee is eligible for temporary total disability when he is unable to perform suitable employment on one or more calendar days following the day of injury. N.C. Gen. Stat. §97-29
An employee who, due to a compensable injury, remains unable to earn wages after the first seven days of disability, is entitled to weekly benefits equal to two-thirds of his average weekly wage up to the maximum compensation rate. If the disability exceeds 21 days, the employee is entitled to receive compensation for the first seven days of disability. Weekend days, holidays, and any workday in which the injured employee does not earn a full day’s wages because of the injury are counted as a day of disability, even though the employee may earn some wages. Temporary total disability benefits can continue for up to 500 weeks. N.C. Gen. Stat. §97-29 (b). Benefits terminate when the employee returns to work or when the employer provides credible evidence to the North Carolina Industrial Commission that the employee is no longer disabled.
Temporary Partial Disability
An employee is eligible for temporary partial disability when he is able to work but, at a lesser rate of earnings than that of his average weekly wage of his occupation at the time of the accident. Temporary partial disability benefits provide compensation equal to two-thirds of the difference between the post-injury and pre-injury average weekly wages, so long as the amount does not exceed the statutory maximum weekly benefit. Temporary partial disability benefits may not continue beyond 500 weeks, and any number of weeks wherein temporary total disability benefits were paid will be deducted from the 500-week maximum. N.C. Gen. Stat. §97-30
Permanent Partial Disability
An employee who at the end of the healing period, also known as maximum medical improvement, is left with complete loss or loss of use of any member or part of the body may receive permanent total disability benefits notwithstanding his ability to earn wages. The rate of compensation is determined from the use of medical evidence which provides an opinion as to the percentage disability rating (loss of function) for the affected body part with 100% representing a total loss of function and 0% representing full functioning. The percentage disability rating is then compared to one of the body parts listed in the schedule of injuries contained in N.C.G.S. 97-31. Under the schedule of injuries, each body part is assigned a specific number of weeks of benefits.
Permanent Total Disability
Permanent total disability benefits are available to an employee who suffers a complete and permanent total incapacity from following any gainful occupation. According to N.C.G.S. 97-29 “the loss of both hands, both arms, both feet, both legs, both eyes, or any two thereof; spinal injury involving severe bilaterally paralysis; severe brain or head injury; and burns, constitutes total and permanent disability, and entitles the worker to weekly benefits is entitled to weekly benefits equal to two-thirds of his average weekly wage up to the maximum compensation rate and medical compensation during his or her lifetime.”
Death benefits are payable when an employee dies due to an occupational disease or due to an accident if the death occurs within six years thereafter. Death benefits amount to payment of weekly benefits equal to two-thirds of his average weekly wage up to the maximum compensation rate or the maximum compensation rate for a period of 500 weeks; $10,000.00 for actual funeral expenses, and any medical expenses incurred due to the mortal injury or disease. A minor child or disabled spouse may receive more than 500 weeks of benefits N.C.G.S. 97-38
The Claims ProcessReporting an Injury and Filing a Claim
After an injury occurs, an employee must report the injury to his employer using North Carolina Industrial Commission Form 18 (Notice of Accident to Employer and Claim of Employee) within 30 days. N.C. Gen. Stat. §97-22.
According to N.C. Gen. Stat. §97-24 Form 18 must also be filed with the North Carolina Industrial Commission “within two years after the last payment of medical compensation when no other compensation has been paid and when the employer’s liability has not otherwise been established under this Article.”
For occupational disease claims, an employee shall file Form 18 with the North Carolina Industrial Commission within two years “the employee has been advised by competent medical authority that he has the same (an occupational disease).” N.C. Gen. Stat. §97-58
Failure to file Form 18 with an employer or the North Carolina Industrial Commission effectively bars the right to claim worker’s compensation benefits.
Employer or Insurer’s Refusal to Acknowledge Claim
When liability for payment of compensation is denied the employee may request a hearing before the Industrial Commission by submitting Form 33 (Request for Hearing) with the North Carolina Industrial Commission.
When an employee submits Form 33 the North Carolina Industrial Commission will automatically issues an Order for Mediated Settlement Conference to all parties. Cases involving expedited medical motions, administrative appeals and injured workers represented by counsel, cases involving non-insured employers are generally mediated only if all parties agree to mediate and the matter including the Deputy Commissioner.
At the conclusion of the mediation, the mediator will make recommendations to the parties If the parties are unable to reach an agreement, either party may request a formal hearing before the North Carolina Industrial Commission.
A formal hearing with the North Carolina Industrial Commission is much like a trial. All parties present witnesses and evidence, and a judge makes a final determination regarding the issues.
According to 04 NCAC 10A .0611 “The Commission shall set a contested case for hearing in a location deemed convenient to witnesses and the Commission.”
Full Commission Review
According to N.C. Gen. Stat. §97-85 “If application is made to the Commission within 15 days from the date when notice of the award shall have been given, the full Commission shall review the award, and, if good ground be shown therefor, reconsider the evidence, receive further evidence, rehear the parties or their representatives, and, if proper, amend the award”
Appealing North Carolina Industrial Full Commission Decisions
Either party may appeal this decision to the North Carolina Court of Appeals as to the application of the law to the facts of the case pursuant to According to N.C. Gen. Stat. §97-86. “either party to the dispute may, within 30 days from the date of such award or within 30 days after receipt of notice to be sent by registered mail or certified mail of such award, but not thereafter, appeal from the decision of said Commission to the Court of Appeals for errors of law under the same terms and conditions as govern appeals from the superior court to the Court of Appeals in ordinary civil actions.”