Workers Compensation Law in North Dakota
Workers' compensation is a type of insurance that pays employees who sustain a work-related injury or illness for their medical bills, rehabilitation and part of their lost wages. Each state is responsible for enacting laws defining who must carry workers' comp, where they can obtain the insurance and how claims will be handled. In North Dakota, the agency administering workers' comp laws is Workforce Safety and Insurance, or WSI.
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Obtaining Coverage
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In North Dakota, all employers must purchase workers' compensation insurance from the WSI. State law requires an employer to apply for workers' comp before hiring any workers. Employers can complete the application online at the WSI website or download the form for mailing or faxing. If you have a genuine immediate need, you can also call WSI. The WSI underwriters will base your premium on your projected payroll if you do not have employees, or on your actual payroll if you are attempting to remedy your violation of the law.
Basis for Premiums
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The basis for calculating your premium is all remuneration paid to employees. Remuneration includes cash as well as non-monetary payments. Cash wages include any commissions, bonuses, reported tips and overtime, holiday, vacation or sick pay. If you provide meals, lodging, housing or other gratuities, include the value of such items as remuneration. Contributions to a 401k, cafeteria plan or annuity are also remuneration. The amount of remuneration is then multiplied by a risk factor that varies by the type of business you operate and your workers' compensation history.
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Payment of Premium
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North Dakota law requires employers to bear the full cost of workers' compensation. It is illegal to make payroll deductions to offset the cost or require workers to pay any portion of the premium.
Liability for Premiums
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Corporations, limited liability corporations and similar entities normally allow owners to protect personal assets from business expenses. North Dakota law, though, allows WSI to seek payment from corporate officers and directors if the entity is a corporation, partners if the entity is a limited liability partnership, governors and managers if the entity is a limited liability company, and any employee who owns at least 20 percent of the company and controls the reports to WSI. In addition, a general contractor who utilizes subcontractors or independent contractors may be held liable for their unpaid premiums.
Mandatory Coverage
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Under North Dakota law, most employers must carry workers' compensation for all employees, including part-time, occasional and seasonal workers. The law provides exceptions for certain real estate brokers, workers on ranches and farms, domestic household employees, and workers maintaining or operating a place of worship. Railroad and federal employees, news delivery personnel, and the employer's children who are 21 or younger are also exempt. The state does not require employers to carry workers' compensation insurance on independent contractors.
Penalty for Failing to Obtain Coverage
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If you have employees and do not have a workers' compensation policy, North Dakota law provides penalties. You may have to pay premiums retroactively to cover the time your employees were not insured. The state may also assess a penalty for your failure to obtain mandatory coverage. If an employee is injured while you are uninsured, he may sue you for the damages he suffered.
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