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Independent contractors are not eligible for workers' compensation coverage; employers are not required by state law to purchase coverage for independent contractors. However, some employers misclassify employees as independent contractors to avoid paying payroll taxes and workers' comp premiums for them.
North Carolina law specifies that any business that employs three or more people is required to carry workers' compensation coverage. This policy provides medical benefits in the event of a work-related accident.
The North Carolina Workers' Compensation Act requires that all businesses that employ three or more employees, including those operating as corporations, sole proprietorships, limited liability companies and partnerships, obtain workers' compensation insurance or qualify as self-insured employers for purposes of paying
Those businesses that employ three or more employees are required to carry workers compensation insurance except agricultural employment with fewer than 10 employees, certain sawmill and logging operations and all domestic employees are exempt.
Generally speaking, employers and companies in North Carolina are not required to purchase workers' compensation coverage for independent contractors, freelancers and subcontractors.