South Carolina Workers’ Compensation Insurance

Here are a few of the key workers' comp laws South Carolina small business owners should know, per South Carolina Code Title 42: 

• Businesses that regularly employ four or more employees — full-time, part-time or family members — must carry workers' compensation insurance.
• Businesses with a total annual payroll under $3,000 are exempt, regardless of employee count.
• Employers have the right to direct your employees to an authorized treating physician. Medical bills from unauthorized providers may not be covered.
• Employees must report work-related injuries to their employer within 90 days of the accident.
• Employers must file a report with their insurance company within 10 days of learning about an on-the-job injury.
• Employees have two years from the date of injury to formally file a workers' comp claim with the SCWCC using Form 50. Workplace death claims must be filed within two years of the date of death using Form 52.
• Once covered by workers’ comp, employers are required to post Form 2 (Employer's Notice of Being Subject to the Act) in a visible location at their workplace.
• Failing to carry required workers' comp coverage can result in a fine of $1 per employee per day — with a minimum of $10 and a maximum of $100 per day — for every day the business is out of compliance. Willful refusal to secure coverage is a misdemeanor, punishable by a fine of $100 to $1,000, imprisonment of 30 days to 6 months, or both.

While these are some of the more important requirements, they are not a complete overview of the workers’ comp laws that may apply to your business. You should always consult an attorney or legal professional if you have any questions about your specific situation.

South Carolina workers' comp income benefits depend on the nature and severity of the injury: 

• Temporary total disability (TTD): If a doctor confirms an employee can't work at all, they receive two-thirds (66.67%) of their average weekly wage, calculated using the four quarters before the injury. There's a seven-day waiting period before benefits begin, but if the disability lasts more than 14 days, the employee will be compensated for that initial waiting period, too. Benefits continue until the employee reaches maximum medical improvement (MMI).
• Temporary partial disability (TPD): If an employee can return to work with restrictions at reduced wages, they may receive two-thirds of the difference between their pre- and post-injury earnings.
• Permanent partial disability (PPD): If the injury results in lasting impairment after an employee has reached MMI, they'll receive benefits based on their disability rating and a statutory schedule that assigns a set number of weeks of compensation per injured body part. These benefits are typically paid out as a lump sum or on a weekly basis.
• Permanent total disability (PTD): If an employee's injuries are so severe they can never return to work, they may receive permanent total disability benefits for up to 500 weeks — or for life in cases of certain catastrophic injuries. 

In the unfortunate circumstance of an employee dying as a result of a covered workplace injury, their dependents — usually a spouse or children, or parents if there are no dependents — are eligible for death benefits equal to two-thirds of the deceased worker's average weekly wage, paid for up to 500 weeks. Any claim of this type must be filed within two years of the date of death.

Employers or the insurance company may also be required to pay for other death benefits, such as funeral and burial costs, up to the maximum limit established by the state.

South Carolina workers' comp exemptions are broader than in some states. Here's who may be exempt:

• Sole proprietors, partners and members of limited liability companies (LLCs).
• Employers who have a total annual payroll below $3,000.
• Owner-operator drivers.
• Casual employees (non-permanent and not part of the regular course of business).
• Certain real estate agents who work on commission.
• Agricultural employees and individuals who sell agricultural products.
• Employees of state and county fair associations.
• Federal employees.
• Employees of railroad and railway express companies.

Even if your business is currently exempt, you can opt into workers’ comp coverage. One serious workplace accident could far exceed the cost of a policy.

South Carolina requires injured workers to report them to their employer within 90 days, and to seek medical treatment. After the incident is reported, the employee has two years to file a workers’ comp claim for benefits.

Once a claim is approved, the injured or ill employee is eligible to receive benefits. Benefits are equal to 67% of their average weekly wage. The calculation is based on the four quarters before the injury, up to the maximum set by the South Carolina Department of Employment and Workforce.

Yes — and this is an area where South Carolina's rules can catch general contractors off guard. Employees of your subcontractors are considered your statutory employees under South Carolina law. That means if one of your subcontractors doesn't carry their own workers' comp coverage and one of their workers is injured on your job site, you could be liable for that claim.

Always require proof of workers' comp coverage from your subcontractors — a certificate of insurance — before work begins. Don't assume they're covered just because they're an independent business. 

Sole proprietors in South Carolina aren't automatically covered by workers' comp — and they aren't required to carry it for themselves. But they can choose to opt into coverage, as many sole proprietors do. Personal health insurance may exclude work-related injuries, and it doesn’t usually cover lost wages while a worker is in recovery. Workers’ comp coverage could help provide some of these cost and income benefits.

Independent contractors generally aren't covered by workers' compensation in South Carolina. But simply calling a worker an independent contractor or paying them via 1099 doesn't automatically make them an independent contractor under South Carolina law. 

South Carolina evaluates several factors to determine if a worker is truly an independent contractor, and classification is often fact-intensive and case-specific. If a worker is misclassified, the hiring business could be on the hook for their coverage and penalties retroactively. 

Employers in South Carolina are responsible for notifying their insurance carrier within 10 days of learning about a workplace injury. 

Employers often file the claim with the SCWCC on the employee's behalf. If they don't, their employee can file directly using Form 50 (workplace injury) or Form 52 (workplace death), available on the SCWCC website. Either way, the deadline to file a claim is two years from the date of injury or death.

Learn how to file a workers' comp claim with ERGO NEXT. 

South Carolina has an Uninsured Employers' Fund (UEF), which is a state-administered fund that steps in to pay workers' comp benefits to employees whose employers are illegally uninsured.

If an employee is injured and their employer does not have required coverage, the UEF will pay their medical bills, lost wages and other benefits they're entitled to under South Carolina law.

Here's the part that matters for business owners: The state doesn't absorb those costs. Once the UEF pays out a claim, South Carolina will come after the uninsured business to recover every dollar — plus penalties. Having required workers' comp coverage in place is the only way you can avoid that liability.

If you're required to carry workers' comp in South Carolina and you don't have it, consequences from the South Carolina Workers' Compensation Commission can include:

• Fines of $1 per employee per day — with a minimum of $10 and maximum of $100 per day.
• Doubled fines and penalties at the Commission's discretion.
• Seizure of business assets to cover the cost of any workers' comp claim that arises while you're uninsured.

And if one of your employees gets hurt while you're uninsured, the business could be held responsible for all medical bills, lost wages and rehabilitation costs. South Carolina's Uninsured Employers' Fund will step in to pay the employee, but then the state will come after the business to recover every dollar paid out.