NC General Statutes

N.C. Gen. Stat. § 97-94 (2026)

Employers required to give proof that they have complied with preceding section; penalty for not keeping liability insured; review; liability for compensation; criminal penalties for failure to secure payment of compensation

✓ current as of July 2026

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(a) Every employer subject to the compensation provisions of this Article shall file with the Commission, in form prescribed by it, as often as the Commission determines to be necessary, evidence of its compliance with the provisions of G.S. 97-93 and all other provisions relating thereto.

(b) Repealed by Session Laws 2018-5, s. 22.1, effective July 1, 2018.

(b1) Any employer required to secure the payment of compensation under this Article who refuses or neglects to secure such compensation shall be punished by a penalty of one dollar ($1.00) for each employee, but not less than twenty dollars ($20.00) nor more than one hundred dollars ($100.00), for each day of such refusal or neglect and until the same ceases.

(b2) As an alternative to the penalty imposed in subsection (b1) of this section, the employer may submit to the Commission evidence that the employer has obtained workers' compensation insurance coverage from either an insurer licensed to do business in North Carolina or the North Carolina Workers' Compensation Insurance Plan. In addition to submitting such evidence, the employer shall submit to the Commission all payroll records for the period or periods of noncompliance. The Commission shall, after verifying the coverage and upon the request of the employer, rescind the penalty assessed under subsection (b1) of this section and impose a penalty by:

(1) First, determining the per employee cost of the current policy by dividing the cost of the policy by the number of employees covered by the policy.

(2) Second, determining the average number of employees during the period of noncompliance.

(3) Third, multiplying the per employee cost of the current policy by the average number of employees during the period of noncompliance and, to that total, by applying an additional penalty of ten percent (10%).

The alternate penalty provided by this subsection is available only to an employer not previously penalized under this section.

(c) Any penalty imposed by this section may be assessed by the Industrial Commission administratively, with the right to a hearing if requested within 30 days after notice of the assessment of the penalty and the right of review and appeal as in other cases. For the purposes of assessing the penalties set forth in subsections (b1) and (b2) of this section, the penalty shall not apply to a period of noncompliance that occurred more than three years prior to the date the Industrial Commission first assessed the penalty. Enforcement of the penalty shall be made by the Office of the Attorney General. The clear proceeds of penalties provided for in this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2.

In addition to any penalty under this section, the employer shall be liable, during the continuance of the refusal or neglect, to an employee for compensation under this Article or at law at the election of the injured employee. The Industrial Commission shall prioritize the payment of any compensation due an injured employee under this Article over the payment of any penalty owed pursuant to this section.

Any employer required to secure the payment of compensation under this Article who willfully fails to secure such compensation shall be guilty of a Class H felony. Any employer required to secure the payment of compensation under this Article who neglects to secure the payment of compensation shall be guilty of a Class 1 misdemeanor.

(d) Any person who, with the ability and authority to bring an employer in compliance with G.S. 97-93, willfully fails to bring the employer in compliance, shall be guilty of a Class H felony. Any person who, with the ability and authority to bring an employer in compliance with G.S. 97-93, neglects to bring the employer in compliance, shall be guilty of a Class 1 misdemeanor. Any person who violates this subsection may be assessed a civil penalty by the Commission in an amount up to one hundred percent (100%) of the amount of any compensation due the employer's employees injured during the time the employer failed to comply with G.S. 97-93.

(e) Notwithstanding the provisions of G.S. 97-101, the Commission may suspend collection or remit all or part of any civil penalty imposed under this section on condition that the employer or person pays any compensation due and complies with G.S. 97-93. (1929, c. 120, s. 68; 1945, c. 766; 1963, c. 499; 1973, c. 1291, s. 13; 1985, c. 119, s. 4; 1985 (Reg. Sess., 1986), c. 1027, s. 54; 1987, c. 729, s. 17; 1993, c. 539, s. 681; 1994, Ex. Sess., c. 24, s. 14(c); 1993 (Reg. Sess., 1994), c. 679, s. 8.1; 1997-353, s. 2; 1998-215, s. 115; 2018-5, s. 22.1.)

Notes of Decisions

Cited in 13 cases, 1992–2013 · leading case: Putman v. Alexander, 670 S.E.2d 610 (N.C. Ct. App. 2009).

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Putman v. Alexander, 670 S.E.2d 610 (N.C. Ct. App. 2009). · cites it 66× “§] 97-93,” see N.C. Gen. Stat. § 97-94 (d) (2007), but instead argue that a statutory employer is not subject to the civil penalty provision .”

Johnson v. Herbie's Place, 579 S.E.2d 110 (N.C. Ct. App. 2003). · cites it 24× “We conclude that in the context of N.C.G.S. § 97-94, the phrases “neglects to” secure workers’ compensation, or “neglects to” bring the employer into compliance, carry essentially the same meaning as “fails to secure” workers’ compensation or “fails to bring the employer into…”

Allred v. Exceptional Landscapes, Inc., 743 S.E.2d 48 (N.C. Ct. App. 2013). · cites it 20× “34 per week and to pay all medical expenses incurred as a result of the accident; (2) an attorney’s fee to be paid to plaintiff’s counsel; (3) a penalty to be assessed pursuant to N.C. Gen. Stat. § 97-94 (b) against T. Wright, Summey, and J.”

Hyler v. GTE Prods. Co., 425 S.E.2d 698 (N.C. 1993). · cites it 6× “§ 97-82 (memorandum of agreement between employee and employer "in regard to compensation" shall be filed with the Commission and becomes enforceable by court decree).”

North Carolina Ins. Guar. Ass'n v. Bd. of Trs., 691 S.E.2d 694 (N.C. 2010). · cites it 8× “See N.C.G.S. § 97-94 (2007). This decision thus applies only to a limited pool of employers and insurers.”

Harrison v. Tobacco Transp., Inc., 533 S.E.2d 871 (N.C. Ct. App. 2000). · cites it 10× “Therefore, defendant-employer is subject to the penalty provisions of N.C. Gen. Stat. § 97-94 . Based on these findings, the Commission concluded that Tobacco Transport is subject to the penalty provision of G.”

Reece v. Forga, 531 S.E.2d 881 (N.C. Ct. App. 2000). · cites it 4× “N.C. Gen. Stat. § 97-94 (b). There is a presumption that every employer and employee subject to the Act has accepted its provisions.”

Zocco v. United States, Dep't of the Army, 791 F. Supp. 595 (E.D.N.C. 1992). · cites it 6× “§ 97-94(b) (emphasis added). Zocco contends that section 97-94(b) expressly permits him to pursue a negligence action against Brawley because Brawley did not secure the payment of compensation as required by section 97-9.”

Rivera v. Trapp, 519 S.E.2d 777 (N.C. Ct. App. 1999). · cites it 2× “G.S. § 97-94 (Supp. 1998) states that the Commission may assess a civil penalty of up to one hundred percent (100%) of the amount of any compensation due to the employer’s employees for any person who has the ability and authority to bring an employer into compliance with G.”

Seigel v. Patel, 513 S.E.2d 602 (N.C. Ct. App. 1999). · cites it 4× “N.C. Gen. Stat. § 97-94 (b) (Cum. Supp. 1998) (emphasis added).”

Poe v. Atlas-Soundelier/Am. Trading & Prod. Core, 512 S.E.2d 760 (N.C. Ct. App. 1999). · cites it 2× “” N.C. Gen. Stat. § 97-94 (b) (1991). Plaintiff argues that Atlas-Soundelier did not “secure the payment of compensation” as required by the Act.”

Crawford v. Phillips, 675 S.E.2d 154 (N.C. Ct. App. 2009). · cites it 8× “00 pursuant to N.C. Gen. Stat. § 97-94 (b) for not maintaining workers' compensation insurance; and ordering defendant Phillips to pay $5,000.”

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— N.C. Gen. Stat. § 97-94(b) — 2 cases

Johnson v. Herbie's Place, 579 S.E.2d 110 (N.C. Ct. App. 2003). “We conclude that in the context of N.C.G.S. § 97-94, the phrases “neglects to” secure workers’ compensation, or “neglects to” bring the employer into compliance, carry essentially the same meaning as “fails to secure” workers’ compensation or “fails to bring the employer into…”

Zocco v. United States, Dep't of the Army, 791 F. Supp. 595 (E.D.N.C. 1992). “§ 97-94(b) (emphasis added). Zocco contends that section 97-94(b) expressly permits him to pursue a negligence action against Brawley because Brawley did not secure the payment of compensation as required by section 97-9.”

— N.C. Gen. Stat. § 97-94(d) — 2 cases

Putman v. Alexander, 670 S.E.2d 610 (N.C. Ct. App. 2009). “§] 97-93,” see N.C. Gen. Stat. § 97-94 (d) (2007), but instead argue that a statutory employer is not subject to the civil penalty provision .”

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