North Carolina Governor: Workers’ Comp Problems Will Be Fixed

Gov. Beverly Perdue said Tuesday that the state will fix problems that have led to injured workers lacking coverage to make up for lost wages and provide other benefits because North Carolina companies aren’t purchasing workers’ compensation insurance.

Perdue said she was briefed Monday by North Carolina Industrial Commission Chairwoman Pam Young on her plan to review the workers’ compensation system following a report by The News & Observer of Raleigh.

The paper reported that tens of thousands of North Carolina businesses are violating state law by failing to buy workers’ compensation insurance or by showing they are self-insured. The report said the state doesn’t track employer coverage and often finds out about lapsed coverage when an injured worker seeks help through the commission.

“The General Assembly is aware of this and we will fix the problem,” Perdue told reporters after a meeting of the Council of State. “I don’t know how it got to be this way but clearly there (are) some concerns.”

She said Young understands the problems and is committed to fixing them.

In a prepared statement Monday to the newspaper, Young said: “The North Carolina workers’ compensation system faces many challenges, including ensuring that employers are providing the necessary and adequate coverage for their employees. The best way for our system to be strong and vibrant is to be sure all participants meet their obligations.”

“The best way for our system to be strong and vibrant is to be sure all participants meet their obligations,” Young said. She was appointed to the commission that settles disputes between employers and injured workers by former Democratic Gov. Mike Easley.

Insurance carriers cover about 140,000 businesses for workers’ comp, but the state counts roughly 170,000 companies in North Carolina, the newspaper reported. All but the smallest business must buy workers’ compensation insurance or certify they can cover the costs of worker injuries.

Businesses can be fined as much as $100 per day for lack of coverage, but the commission typically doesn’t enforce the fines, according to The News & Observer. The newspaper said few cases referred for prosecution result in an arrest or charges.

The Legislature approved workers’ compensation system changes in 2011, but didn’t address employers lacking coverage.

Sen. Harry Brown, R-Onslow, chairman of the Senate Commerce Committee and an automobile dealer who pays the insurance, criticized the governor and commissioners for failing to use enforcement powers in the law. Brown also said he sympathizes with small businesses who can’t afford the insurance.

Sen. Doug Berger, D-Franklin, a former deputy commissioner at the Industrial Commission, wants Perdue to put system reforms in her budget proposal. Commission investigators also should be required to perform workers’ comp insurance spot checks to ensure compliance by businesses.