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Misclassification Confusion With New NC Task Force


NC Misclassification Confusion

The misclassification confusion still exists in North Carolina. Recently, North Carolina’s Governor Perdue had drawn together a task force to lessen the number of Workers Comp scofflaws that exist in North Carolina. Earlier this year, 30,000 North Carolina employers did not have proper coverage for their workers.

Graphic of Misclassification Confusion Man Thinking Question Mark

I had covered this same classification/misclassification issue in the past as this issue seems to rear its ugly head every time a state decides to heavily pursue companies that are seeking to avoid paying workers compensation insurance and taxes. This seems to occur once every six months.

I wanted to immediately straighten out an overused term as we received two emails and one phone call when the article appeared in the Raleigh News & Observer. Your workers compensation classification codes are totally different from the term misclassification as used in this case.

Questioning how your covered workers are classified in your business in not illegal whatsoever if done properly and within time limits. Governor Perdue and the North Carolina Insurance Commissioner Wayne Goodwin are pursuing companies that have no coverage for workers that are possibly employees.

Picture Businessman Covered Sticky Notes Misclassification Confusion North Carolina

The word misclassified in this instance means the employer has allegedly classified the employees as independent contractors to avoid paying workers compensation and taxes on the employees. This has very little to do with questioning the classification codes or any other type of information on your policies or audits.

If you are in the State of North Carolina (or any other state) and you feel that your policies or premium audits are not correct, you have a right to question whether or not your current employees were misclassified for your current polices and in the three years prior (in most states).

We have never encouraged and strictly discouraged our clients or potential clients from classifying employees as contractors. Trying to avoid paying workers comp insurance and employment taxes will eventually turn out to be a very bad business practice.

I do not wish to discourage any company from hiring sub-contractors.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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