Workers Compensation Requirements in South Carolina: Does Your Greenville Business Need Coverage?

If you own a business in Greenville, SC and you have employees, the question is not whether you should carry workers compensation insurance. The question is whether South Carolina law requires it. For most employers, the answer is yes once you hit the four-employee threshold.

This guide breaks down the workers compensation requirements in South Carolina, which businesses need coverage, who is exempt, and what happens if you skip it.

SC Workers Comp Law: The 4-Employee Rule Explained

Under the South Carolina Workers’ Compensation Act (Title 42 of the SC Code of Laws), employers with four or more employees must carry workers compensation insurance. This is enforced by the South Carolina Workers’ Compensation Commission.

Here is what counts toward that four-employee threshold:

• Part-time employees count. South Carolina counts part-time workers toward the four-employee threshold. Two full-time employees and two part-time employees equals four.
• Family members count. If your spouse or children work in the business, they are counted as employees under SC workers comp law.
• Seasonal and temporary workers count. If you regularly employ seasonal help during busy periods, those workers count during the time they are employed.

Workers Compensation for Greenville Businesses by Industry

The workers comp requirement applies across all industries once you have four employees. But certain industries in the Greenville area are more likely to hit that threshold and carry higher risk:

Workers Comp Exemptions in South Carolina

South Carolina exempts certain categories of workers from the workers compensation requirement:

• Employers with fewer than four employees (unless in construction with subcontractors)
• Employers with annual payroll under $3,000
• Casual employees not in the employer’s usual course of business
• Agricultural workers
• Federal government employees (covered by federal workers comp programs)
• Railroad workers (covered by the Federal Employers Liability Act)
• Licensed real estate agents paid solely by commission

Sole proprietors, partners, and LLC members can elect to exclude themselves from coverage. However, doing so means they have no workers comp benefits if they are injured on the job. Many Greenville business owners choose to include themselves, especially in construction and physical trades.

SC Workers Comp Penalties: What Happens Without Coverage

The exclusive remedy protection is one of the most important reasons to carry workers comp even if you are just at the threshold. Under workers comp, an injured employee receives benefits (medical expenses, lost wages, disability) but generally cannot sue the employer in civil court. Without workers comp, that protection disappears, and a single workplace injury lawsuit can destroy a small business.

NCCI Class Codes and Workers Comp Premium Calculation in SC

Workers compensation premiums in South Carolina are based on three factors:

1. NCCI class code. The National Council on Compensation Insurance (NCCI) assigns a classification code to every type of work. Office workers have a different class code (and much lower rate) than roofers. Each code has a base rate per $100 of payroll.
2. Payroll. Your premium is calculated per $100 of payroll for each class code. More employees and higher wages mean higher premiums. This is why construction companies pay more than accounting firms.
3. Experience modification rate (EMR). Your EMR is a multiplier based on your company’s claims history compared to similar businesses. A clean claims history gives you an EMR below 1.0, which lowers your premium. Multiple claims push it above 1.0. A high EMR can make it difficult to bid on commercial contracts because many general contractors require subs to have an EMR under 1.0.

An independent insurance agent can help you make sure your employees are classified under the correct NCCI codes. Incorrect classification is one of the most common reasons businesses overpay for workers compensation insurance. A restaurant owner whose servers are classified under the kitchen staff code pays more than necessary. An agent who understands the classification system catches these errors.

Subcontractor Workers Comp Liability in South Carolina

This is where workers comp in South Carolina gets complicated for Greenville business owners, especially in construction.

General contractor liability

Under SC law, a general contractor is liable for workers compensation coverage for all employees of uninsured subcontractors working on the GC’s project. If you hire a subcontractor who does not carry workers comp, and that sub’s employee gets injured on your job site, the claim falls on your workers comp policy.

This is why general contractors in Greenville require certificates of insurance (COIs) from every subcontractor before they step on a job site. If you are a sub, not having workers comp limits the GCs you can work with.

Independent contractors (1099 workers)

Classifying workers as independent contractors (1099) does not automatically exempt you from workers comp. The SC Workers’ Compensation Commission looks at the actual working relationship, not just the tax classification. If you control when, where, and how someone does their work, they may be classified as an employee regardless of how you pay them.

If you rely on 1099 workers, have an attorney or your insurance agent review the relationship to make sure you are not inadvertently creating a workers comp liability.

How to File a Workers Compensation Claim with the SC WCC

When a work-related injury or illness occurs, the process matters. South Carolina workers’ compensation benefits cover medical expenses, lost wages based on the average weekly wage, and disability benefits for employees injured on the job. The South Carolina Workers’ Compensation Commission oversees the claims process and ensures injured workers receive the compensation they are eligible for.

An employer must file a Form 38 with the Commission within ten days of learning about a work-related injury. The injured worker should also report the injury to their employer immediately. According to the South Carolina Workers’ Compensation Act, workers who are not reporting their injury promptly risk complications with their workers’ compensation claim.

South Carolina workers’ compensation laws require employers to maintain workers’ compensation insurance coverage continuously. The state’s assigned risk program provides an option for employers who cannot find workers’ comp coverage in the voluntary market due to high-risk classifications or poor claims history. An insurance carrier or independent agent can help determine whether the assigned risk program is necessary or if better rates are available through standard markets.

For Greenville business owners, carrying workers’ compensation insurance is about more than compliance. It protects your business from personal liability, keeps your operations running if an employee gets injured, and maintains your eligibility to bid on commercial contracts. South Carolina requires employers with four or more employees to carry workers’ compensation insurance, and the penalties for non-compliance can end a small business.