Payment of Workers' Compensation

It is the policy of the State of North Carolina to comply with all applicable federal and state regulations regarding the payment of workers' compensation.

State Budget Manual - Personnel Policies and Regulations Section

State Personnel Manual - Employee Benefits and Awards Section

North Carolina General Statutes - Chapter 97

The State Budget Manual - Personnel Policies and Regulations Section - governs the State's policy on paying worker's compensation.

All North Carolina State Government employees are covered under the State Government Workers' Compensation Program. This includes all agency and university employees and officers. It also includes all state elected officials, members of the General Assembly or those appointed by the Governor to serve on a per diem, part-time or fee basis. It covers full-time employees, part-time employees and temporary employees.

The law provides medical and disability compensation including a weekly compensation benefit for time lost from work which is 66 2/3% of the employee's average weekly wage up to a maximum established annually by the North Carolina Industrial Commission.  There is a seven calendar day waiting period where no compensation for lost time will be allowed.  During this time, employees may elect to go on leave without pay or use any sick or vacation leave accrued prior to the injury. 

After an employee is placed on workers' compensation leave, the weekly benefit may be supplemented by the use of partial sick or vacation/bonus leave, earned prior to the injury, in accordance with a schedule published by the Office of State Personnel each year (http://www.osp.state.nc.us/).  This will provide an income approximately equal to the employee's original take-home or net pay.

Compensatory leave may be substituted for sick or vacation/bonus leave used during the waiting period if applied within the timeframes provided under the OSP Hours of Work and Overtime Compensation Policy.

If the employee has earned leave or compensatory time and chooses to use it while drawing the weekly benefit, it shall be paid on a temporary payroll at the employee's hourly rate of pay.  It is subject to state and federal withholding taxes, using the employee's W-4 and NC-4 exemptions, and to Social Security taxes, but is not subject to retirement.

If the employee does not return from workers' compensation leave, vacation and sick leave accumulated only during the first twelve months of workers' compensation leave will be exhausted by a lump sum payment, along with other unused vacation/bonus leave which was on hand at the time of the injury.

The Personnel Office is responsible for submitting a PD-105 to the Payroll Office to indicate the separation.  The remarks section of the PD-105 should include the amount of unused vacation and sick leave earned during the first twelve months that is to be paid and any bonus leave to be paid.

While on workers' compensation lea

ve, an employee is in pay status and shall continue to be covered under the State's health insurance program, in compliance with state Health Plan guidelines.  Monthly premiums for the employee will be paid by the agency even though the worker's compensation payments are not processed by the employing agency's Payroll Office.  Premiums for any dependent coverage must be paid by the employee.

While on workers' compensation leave an employee does not receive retirement credit.  As a member of the Retirement System, the employee may purchase credits for the period of time on an approved leave of absence.  Upon request by the employee, the Retirement System provides a statement of the cost and a date by which purchase must be made.  If purchase is not made by that date, the cost will have to be recomputed.

While on workers' compensation leave, an employee is in pay status and will continue to receive longevity credit.  Employees who are eligible for longevity pay shall receive their annual payments.

Upon reinstatement, an employee's salary shall be computed based on the last salary plus any legislative increase to which entitled.  Any performance increase which would have been given had the employee been at work may also be included in the reinstatement salary, or it may be given on any payment date following reinstatement.

Workers' compensation received by an employee or an employee's survivor(s) for an occupational sickness or injury is fully exempt from tax if paid under a workers' compe

nsation act or statute in the nature of a workers' compensation act.

When an employee returns to work after qualifying for workers' compensation, any payments he or she continues to receive while assigned to light duties are taxable.

This policy applies to all State entities.

There are no exceptions to this policy.

There are no special terms for this policy.