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South Carolina Workers’ Comp Exemptions

Workers’ compensation generally applies to all businesses in the state with at least four employees. Any covered employee who is injured on the job should receive medical care and possibly wage loss benefits from a workers’ compensation insurer. But as with all general rules, there are exemptions. Our workers’ compensation lawyer looks at the major exemptions and encourages you to call Surasky Law if you still have questions.

What Employers Are Exempted?

As mentioned above, most businesses with at least 4 employees must purchase a workers’ compensation insurance policy. The 4 employees can be part-time or seasonal. But South Carolina has exempted certain employers, such as:

  • Certain real estate agents paid by commission

  • Owner-operator drivers

  • Agricultural businesses

  • Railroads and railway express companies

  • State and county fair associations

  • Companies that have payroll under $3,000 for the year

For example, you might have a small catering business with four part-time employees. However, your payroll is only $2,450 for the entire year. Your business is exempted from the requirement to purchase workers’ compensation insurance.

Of course, all exempt employers have the option of purchasing insurance, which might make them more attractive to workers. But the law does not require workers’ comp. 

What Employees Are Exempted?

South Carolina also exempts some employees from benefits. Even if their employer is covered, the following employees are not covered:

  • Federal employees

  • LLC members

  • Sole proprietors

  • Casual employees who work only as needed

  • Partners

  • Independent contractors

There is a lot of confusion over this final category: independent contractor. An independent contractor is not simply a part-time employee. Part-time employees are covered by workers’ comp.

Independent contractors are paid with 1099 wage statements. But simply receiving a 1099 does not automatically make you an independent contractor in the eyes of the state. Using an employment contract that states you are an independent contractor also does not automatically make you one.

More on Independent Contractors

In South Carolina, whether you are an independent contractor for workers’ compensation purposes will depend on the details of the work relationship. Courts look at many factors, such as:

  • The method of payment

  • A right to fire

  • Who furnished equipment

  • Any direct evidence of the right to exercise control over how work is performed

An employer does not need to actually exercise control. What matters is if they have the right to control. The South Carolina Workers’ Compensation Commission is responsible for determining independent contractor status for benefits.

Questions regarding workers’ compensation often arise when it comes to construction sites. A general contract might require all subcontractors to purchase workers’ compensation insurance as a condition for getting a job. That is an agreement between the contractor and subcontractor.

Exempt Injuries

South Carolina workers’ compensation only covers injuries or illnesses that arise from employment. You might have fractured your leg while playing basketball with friends, but that is not covered by workers’ comp because you were not working when injured. For this reason, driving to work is also not covered in most cases until you get on your employer’s property.

Workers’ compensation also exempts certain injuries from coverage, even if they result from an on-the-job accident or illness:

  • Anxiety

  • Stress

  • Depression

  • Post-traumatic stress disorder

The law is found at Section 42-1-160 of the South Carolina Code. As spelled out in the law, there are exceptions. First, stress and mental injuries are covered if they are accompanied by a physical injury. Many workers become depressed or suffer from PTSD after a harrowing accident. For medical treatment, they might receive prescription medication or even undergo therapy. This medical care should be covered by workers’ comp if there is an accompanying physical injury.

Mental injuries might also be covered if they were caused by extraordinary and unusual conditions, at least compared to the usual conditions at work. For example, a bank teller could suffer PTSD as a result of a bank heist. That is an extraordinary situation and quite different from what normal tellers experience, so her mental claim might be covered.

People who work in stressful, demanding jobs might struggle to get a mental claim covered if it is not accompanied by a physical injury.

Do You Need Assistance Seeking Workers’ Compensation?

The workers’ compensation system was designed to simplify the claims process. Today, workers do not need to prove “fault” for an accident. It is enough that they were hurt while working.

Still, our firm receives many calls from people seeking benefits. You might need our help if:

  • If your employer is required by law to purchase workers’ comp insurance but chose not to or let it lapse.

  • If your employer is exempt, but you are nonetheless hurt while working.

  • If your employer claims you are an independent contractor when you believe you really qualify as an employee.

  • If you have a mental injury claim which an insurer refuses to cover.

For example, you might make a claim on the Uninsured Employers’ Fund for benefits when your employer does not carry the required insurance. This is an excellent way for injured workers to get benefits without penalty because their employer refused to follow the law. The fund will place a lien on your employer’s assets to cover the cost of your medical care and benefits, along with other expenses.

In other situations, you can retain a lawyer to help establish you are an employee and not an independent contractor. If successful, you might receive benefits.

Speak with an Experienced Workers’ Compensation Attorney Today

Workers’ compensation benefits keep many families afloat after a loved one is injured. Obtaining benefits is often more grueling than many people imagine. Contact an experienced lawyer at Surasky Law today to discuss your case. We can provide an overview of your right to benefits in a free consultation and then strategize for how to obtain financial compensation. We can also discuss whether you have a right to bring a personal injury claim against a third party, which can increase the amount of money you take home.


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