North Dakota workers’ compensation law, with limited exceptions, requires all employers to insure all employees including full-time, part-time, seasonal and occasional workers.
Worker’s compensation covers an employee’s medical care costs and wage replacement for work-related injuries or illnesses. Nearly every state requires businesses with employees to have workers’ comp coverage.
Since it’s required by law, many business owners sign up for workers’ compensation coverage without actually understanding what it does or how it works. This inevitably leads to a lot of confusion as soon as an employee makes a claim.
If you want to be prepared for a claim, you need to know what to expect. Here’s a run-down on who, what, why, and how of workers’ comp.
In most states, workers compensation insurance is purchased in the private insurance market. Some states however prohibit the sale of workers compensation by private insurers and, instead, require employers to purchase coverage from a government-operated fund.
North Dakota, Wyoming, Ohio, and Washington four states with this requirement and are referred to as monopolistic states.
North Dakota Workforce Safety & Insurance (WSI) is the sole provider and administrator of workers’ compensation in North Dakota. WSI is an exclusive employer-financed, no-fault insurance system covering workplace injuries, illnesses, and death. North Dakota law does not allow private insurers to underwrite workers’ compensation insurance in North Dakota.
Businesses must purchase workers compensation if they employ any personnel to work in the state or send employees to work at a business located there. To purchase a policy, employers must complete an application, which can be done through the WSI website.
If your company has at least one employee, you need workers’ comp insurance. In fact, many state laws require businesses to purchase this coverage as soon as they hire their first employee.
An employer is defined as a person who engages or receives the services of another for remuneration (meaning money or substitute for money). It includes individuals, the state, corporations and their officers, partnerships and their partners, limited liability companies and their managers, associations, legal representatives of a deceased person, receivers, and trustees.
In North Dakota there are some exemptions for Worker’s Comp coverage. These include:
Generally, agricultural work is exempt from mandatory workers’ compensation coverage, but this doesn’t mean you shouldn’t have it. Electoral coverage is available.
Workers’ compensation insurance safeguards both your business and your employees.
In a state where population is limited, finding employees can be difficult and maintaining employees is an important part of a small business. It is imperative to take care of your staff. A work-related injury or illness could be devastating for an employee — especially if it means an extended absence. Workers’ compensation makes sure your staff are taken care of if they’re unable to work due to a work-related injury or illness. It will pay a portion of their missed paychecks and cover any medical expenses they racked up because of the incident. Plus, your employees are always protected. Workers’ comp is no-fault coverage that pays out even if the employee is to blame for their injury.
Workers’ comp also reduces your liability for work-related injuries and illnesses. Without coverage, your employees can sue you for a work-related injury or illness to help pay for their medical costs or lost wages.
WSI uses your payroll reports to calculate your workers’ compensation premium. The premium is calculated by applying the rate for a class of employment to the amount of taxable payroll in that classification. If you have several classifications, your premium is the sum-total of all classifications. The maximum taxable payroll for each worker is capped at 70% of the state’s average annual wage. This amount is commonly referred to as the “wage cap.” The average annual wage cap becomes effective on July 1 of each year.
For a quote for your business you can submit a quote request through WSI or look at the current rate manual for your class description within their forms and resources tab.
Although worker’s comp is not handled through private insurers in North Dakota, it is an important part of your business strategy of success for both the employer and employee. We feel it is something that should be looked into with the North Dakota Workforce Safety & Insurance (WSI), whether it is required or not.
P.O. Box 249
123 N. Main St.
Crosby, ND 58730