If you sublet work in North Carolina, get a workers comp certificate from the subcontractor before the work starts. Under G.S. 97-19, a contractor who doesn't can be liable for the sub's injured workers as if they were its own employees, even if the sub has fewer than three employees.
What the law says
G.S. 97-19 applies to any principal contractor, intermediate contractor or subcontractor that sublets a contract for work. If it sublets without getting a certificate showing the subcontractor has complied with the workers compensation insurance requirement, it is liable to the same extent the subcontractor would be, regardless of whether the subcontractor regularly has fewer than three employees.
What counts as proof
The certificate has to come from the subcontractor or the Industrial Commission. It's either a certificate issued by a workers compensation insurance carrier or a certificate of compliance issued by the Department of Insurance to a self-insured subcontractor. A note from the sub saying they're covered isn't the same thing.
Why the size of the sub doesn't save you
A sub with two employees may not be required to carry workers comp on its own. But if you hire that sub without a certificate, the statute can make you liable for its injured workers anyway. That's why many general contractors require a certificate from every sub on every job, whatever its size.
Keep it current
Policies cancel and expire. A certificate that was good in January may not be good in July. Collect certificates before work starts, note the expiration dates, and ask for a new one at renewal. Keep the certificates with the job file so you can produce them if an injury claim or an audit asks.
The audit question
Your own workers comp premium is based on payroll, and at the end of the policy year the company audits it. How the audit treats payments to subcontractors depends on your policy and your paperwork, so ask us before the auditor does. Clean certificates on file make that conversation much easier.
If you are the sub
Expect to be asked for a certificate before you get on a job site. If you've chosen not to carry coverage because you're under three employees, a contractor may still require it. We can usually place a policy quickly so you don't lose the job.
In short
- Get a certificate of workers comp coverage from every sub before work starts.
- Without one, G.S. 97-19 can make you liable for the sub's injured workers.
- That's true even if the sub has fewer than three employees.
- Track expiration dates and ask how your audit treats sub payroll.
Related questions
- How many employees before I need workers comp in NC?
- What is the penalty for not having workers comp in NC?
- How many employees before I need workers comp in South Carolina?
- How many employees before I need workers comp in Virginia?
Coverage pages
- North Carolina Business Insurance
- Leland Business Insurance
- Wilmington Business Insurance
- Hampstead Business Insurance
Talk to us
Every situation is a little different. If you want someone to look at your own policy, call us at (910) 791-1011 or start a quote online. We're an independent, family-owned company founded in 1977, with eight offices in North Carolina, and we're licensed in North Carolina, South Carolina, Virginia and Maryland.
Sources
- N.C. Gen. Stat. 97-19 (contractor liability when subletting without a certificate)
- NC Industrial Commission, Workers' Compensation Insurance Requirement
This page is general information, not a coverage determination or legal advice. Policies, rules and availability vary and change. Review your own policy or talk to your advisor.