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North Carolina Overhauls Workers' Compensation Laws

    Client Alerts
  • June 10, 2011

The North Carolina General Assembly is set to send Governor Purdue an act intended to dramatically change the state's Workers' Compensation rules. The new law is a broadly supported compromise among legislators representing varying business and labor interests.

The key measure of the new law will place a cap of 500 weeks on the currently unlimited period of time that injured employees can collect benefits based on a total disability. In exchange, the cap on temporary partial disability payments will go from 300 to 500 weeks. The new law will also increase survivor death benefits and burial expenses.

Although it will not apply to existing claims, employers believe that the cap on total disability benefits will help stem increases in Workers' Compensation premiums. The absence of any limit on these benefits has resulted in extremely large liabilities and resulting effects on rate modifiers, especially when the case involves a younger employee with decades of potential benefits.

The new law will also make significant changes to the Industrial Commission's processing of Workers' Compensation claims. IC procedures will be brought more into line with other North Carolina administrative agencies. Also, employers' ability to direct medical care for injured employees will be strengthened. Finally, the new law adds a provision allowing disqualification for benefits if an employee willfully misrepresents his or her physical condition when applying for a job (remember that federal law still limits the ability to make many pre-hire medical inquiries).

Governor Purdue is expected to sign the new act into law.