Understanding Workers Comp in South Carolina

Who Needs Workers’ Comp in South Carolina?

South Carolina employers are required to carry workers’ compensation if they have 4 or more employees, whether full or part-time. This applies when payroll is at least $3,000.00 annually. However, there are limited exclusions to this rule for some employees listed below:

  • Agricultural employees and persons selling agricultural products
  • Railroad employees
  • Licensed real estate agents

A business or company may self-insure if they can meet the financial requirements. They can also self-insure under the State’s Insurance Comp Fund or obtain insurance from a private insurance carrier. An employer can become self-insured, or become a member of a group self-insurer authorized by the Board. The majority of businesses purchase standard workers compensation through a licensed insurance agent.

Does South Carolina Allow Workers’ Comp Exemptions for Owners?

Business owners including sole-proprietorships, partnerships, corporate officers and LLC members are all excluded from the requirement for workers comp but may elect to be included, if they are actively engaged in the operation of the business.

If they choose to be included, they must give notice to the Insurance Carrier by filing a Notice of Election or Rejection of Coverage Form.

What are the Penalties for not Having Workers’ Comp in South Carolina?

South Carolina does not have a set fee or fine for an employer’s failure to carry workers’ compensation. Failure to carry coverage is not a criminal offense.

South Carolina has a very novel approach to making sure the injured employee is taken care of and ensuring that employers pay back every penny paid on behalf of an injured worker. In essence, the Uninsured Employers Fund which is administered by and through the 2nd Injury fund kicks in and pays the employees claim, if valid, for all benefits he or she should receive under the workers’ compensation statutes. This gives the Uninsured Employers Fund a lien against the all of the assets of the employer which is satisfied by payment of all the sums paid by the 2nd Injury Fund to the injured employee, or on his behalf, and the costs of any court proceedings. The fund may file a lien against any and all of the employer’s assets both as a property lien in the counties where the employer has assets and a lien under the UCC. The lien has the same impact as a tax lien and cannot be quashed by bankruptcy of the business owner(s). That lien remains in effect until all the cost, fees, expenses etc. are paid.

The South Carolina Department of Revenue has the right and obligation under the statutory scheme set out at Section 42-7-200 to pursue collections against the uninsured employer. The employer may try to reach an agreement or resolution with the State Department of Revenue which can then release the lien. If no agreement is reached the owner’s assets can be levied on and sold to satisfy the full lien. For instance assume the only asset a construction company owns is equipment. So a UCC lien is filed against the equipment which is then sold at auction. The equipment sales price exceeds the amount of the lien. The lien is paid back to the 2nd injury fund. Costs and attorney’s fees are paid to the Department of Revenue. Any secured creditors debts are paid and the owner gets the remainder. In most cases, it would have been far less expensive for the owner to carry the insurance or enter into a settlement agreement and make payments.

When Do I Get an EMR Rating in South Carolina?

All businesses start without an experience modification rate. Their effective EMR Rating is 1.00, which is neutral because it does not increase or decrease premium and makes no adjustment to an insurance carriers’ workers comp rates. In South Carolina the Department of Insurance determines the experience rating formula once an employer has generated $9000.00 of premium, during the last year or two years. Or the EMR will be set at the time the employer reaches an average of $4500.00 in premium annually over a period of more than 2 years.

How long do You Have to Report an Injury at Work in South Carolina?

Generally, employees have 90 days to report an injury to the Employer. If this is a repetitive trauma situation the employee must report the injury within 90 days of discovery of the injury. For instance, a worker is diagnosed with carpel tunnel by a doctor. He then has 90 days from that date. There are additional exceptions which includes a situation where a worker has an occupational disease. The worker has 2 years from the date of diagnosis in this case. Employers are then required to file an Employer’s First Report of Injury with their insurance carrier within 10 days after a work-related injury or death or receipt of Notice of Occupational Disease. The injury must also be reported to the S. Carolina Department of Labor by Filing a First Report of Injury but this is typically handled by your insurance carrier. If an employer refuses to file a claim with the carrier, then the employee can file the claim with the Division of Workers Compensation or obtain an attorney.

How Long can an Employee Remain on Workers’ Comp after a Claim?

The general rule is that an injured worker can draw temporary disability payments for up to 500 weeks while on temporary total disability or until they reach Medical Maximum Improvement (MMI). If an employee becomes a paraplegic, quadriplegic or is brain damaged they can receive benefits for life.

South Carolina Workers’ Compensation Commission

PO Box 1715
1612 Marion Street
Columbia, SC 29202-1715

What is Workers’ Compensation?

The basic purpose of the Workers’ Compensation is to provide wage replacement benefits and medical treatment for employees who have been injured or become ill due to a work-related injury or illness. It prevents the employer from bearing the costs of injuries that occur during normal business operations.

South Carolina Work Comp Commission

The South Carolina Workers Compensation Uninsured Employer’s Fund was established to ensure payment of benefits to uninsured employees. SC has paid out tens millions of dollars for uninsured claims since 2008. As a result, the state is making greater efforts to enforce coverage.

How does workers’ comp help my employee?

Employees benefit from workers’ comp coverage by having lost wages covered while they are hurt or sick and not able to work. It also pays for medical costs they might incur as a result of the sickness or injury.

South Carolina No-fault system

South Carolina provides a no-fault workers’ comp system designed to limit employers liability to benefits provided by the SC Workers Compensation Act. Coverage in SC is the exclusive remedy for on-the-job injuries in South Carolina.

How does workers’ comp help my business?

Your business benefits from workers’ comp coverage by not being liable for injuries that occur as a part of normal business operations. This applies whether the injury was the fault of the business or was caused by negligent actions of the employee.

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