North Dakota Workers' Compensation: WSI Is the Only Provider, $250 Minimum Premium and Back Premium Plus a 25% Penalty for Going Uninsured
North Dakota Workers' Compensation: WSI Is the Only Provider, $250 Minimum Premium and Back Premium Plus a 25% Penalty for Going Uninsured
If you are hiring your first employee in North Dakota, the workers' compensation question is simpler than in most states: you do not shop for a policy. North Dakota workers compensation is provided by one state agency, WorkForce Safety & Insurance (WSI), and skipping it is one of the more expensive mistakes a new employer can make. This guide covers who must be covered, how premium is calculated, what reporting you owe, and what happens if you operate without coverage.
This article is informational content, not legal or tax advice. Rules, caps, and rates change, so confirm current figures with WSI before you budget or hire.
WSI Is the Only Workers' Compensation Provider in North Dakota
North Dakota runs workers' compensation as a state monopoly. WSI is the sole provider and administrator of the coverage, and North Dakota law does not allow private insurers to underwrite it. You cannot buy a workers' comp policy from a local agent, a national carrier, or an online quote site. Your coverage comes from WSI, and WSI sets your premium.
Start at workforcesafety.com or call WSI at 1-800-777-5033. For general state filing questions, the North Dakota Secretary of State and the Office of State Tax Commissioner are the other agencies you will deal with as an employer.
Who Must Have Coverage
Employers must insure all employees before those employees begin work. The requirement covers full-time, part-time, seasonal, and occasional workers, so one part-time employee is enough to trigger it. Premium cannot be deducted from employee wages. The employer pays it.
Some workers and owners are exempt from mandatory coverage:
- An owner, partner, or corporate officer, or the spouse of one of them
- An employer's children under 22
- Farm and ranch labor
- Certain custom farm operations
- Household domestic workers
- Place-of-worship employees
- Certain licensed real estate brokers
- Newspaper delivery personnel
Two details trip up employers. First, an employer's children age 22 or older must be covered. The exemption for children stops at 22. Second, elective coverage is available for some exempt groups, so ask WSI whether it makes sense for your situation. Exemptions depend on the exact facts of the job, so do not assume a worker is exempt because of a title or a family relationship. Confirm the exemption with WSI before you rely on it.
How the Premium Is Calculated
Your premium is your class rate multiplied by your payroll. WSI assigns class rates by industry and job type, so a roofing company and an office-based bookkeeping firm will not pay the same rate. Get your actual class rate from WSI rather than estimating it from a neighbor's invoice.
Two rules shape the math:
- Payroll cap. Each worker's payroll is capped at 70% of the state average annual wage. Pay above the cap does not count toward premium. The cap changes every July 1, so confirm the current figure with WSI before you estimate your costs for the year.
- Minimum premium. The minimum premium is $250 per reporting period. You owe it even if you had no employees during that period.
When you request a quote, give WSI your industry, your expected headcount by job type, and your expected payroll for the year. Ask them to explain how the payroll cap applies to your higher-paid staff.
Reporting Payroll and Posting Your Certificate
WSI payroll reports are filed quarterly in myWSI. Each report is due 30 days after the end of the reporting period. Missing a deadline is an easy way to start your relationship with WSI on the wrong foot, so put the quarterly due dates on your calendar when you first register.
You must also post the Certificate of Payment at your business, where employees can see it. Keep a copy available for any inspector or customer who asks for proof of coverage. Contractors need this proof for licensing, which is covered below.
What Happens If You Go Uninsured
Operating without coverage is expensive, and the cost is not limited to the premium you skipped. Under NDCC 65-04-33, an uninsured employer owes:
- The back premium plus a 25% penalty. Earlier years can carry a higher penalty.
- Up to $5,000 per premium period.
- The actual cost of any claim filed by an injured worker.
The claim exposure is the part most owners underestimate. Under NDCC 65-09-02, injured workers can sue an uninsured employer directly. A single serious injury without coverage can cost far more than a year of premium.
Willful failure to insure is a crime. It is a class A misdemeanor, and it becomes a class C felony if the premium due exceeds $1,000.
If WSI issues a cease-and-desist order and you then employ anyone, a further penalty applies: $10,000 plus $100 per day under NDCC 65-04-27.2. WSI has the authority to reduce that amount, so raise the issue with WSI directly if you are in that position rather than assuming the full figure applies.
Out-of-State Employers and Workers Who Are Paid for Services
Out-of-state employers are not off the hook. If you have workers in North Dakota, you need North Dakota coverage when the thresholds apply: 25% of an employee's pay, or 25% of payroll earned in North Dakota. How that test applies to a traveling crew or a remote worker is a question for WSI and, for complex arrangements, an attorney.
Watch the worker classification question closely. Under NDCC 65-01-03(1), anyone paid for services is presumed to be an employee. A 1099 form or a contractor agreement does not settle the question by itself. If a person is paid to do work for your business, treat the classification as something to verify, not something you assume. Misclassifying a worker is one of the most common ways employers end up owing back premium.
Contractor Licensing and WSI Proof
If you do construction work, the Secretary of State's contractor license requires proof of WSI coverage. Contractor licensing applies when the cost, value, or price of a construction job exceeds $4,000. The person doing the work must hold a North Dakota contractor license at that point. Check the Secretary of State site for the current license classes and fees, because the license is a separate filing from your workers' compensation account.
In practice, this means a contractor without WSI coverage can lose the ability to bid and perform qualifying work. Get coverage in place before you apply for the license, not after.
Step-by-Step: Getting Covered Before Your First Hire
- Map your workforce. List every person who will perform work for pay, including part-time and seasonal help. Note any owner, officer, or family member, and check each one against the exemption list above.
- Get a quote. Call WSI at 1-800-777-5033 or visit workforcesafety.com to get your class rate and a premium estimate based on expected payroll.
- Set up myWSI access. You will need it for every quarterly payroll report.
- Insure before the first day of work. Coverage must be in place before any covered employee starts. Do not let a start date slip ahead of your paperwork.
- Report payroll each quarter. File within 30 days after the period ends. Keep your payroll records organized so the numbers in each report match what you paid.
- Post the Certificate of Payment. Display it at your business location.
Questions to Confirm With WSI
Before you commit to a budget, take these questions to WSI and get the answers in writing where possible:
- What is my class rate for my industry and each job type?
- What is the current payroll cap, given the July 1 adjustment?
- Does any worker or owner in my business qualify for an exemption, and what documentation do I need?
- Is elective coverage available for any exempt worker I want to protect?
- Does the out-of-state 25% threshold apply to my workers?
When to Bring In a Professional
Simple, single-owner businesses with a few employees can usually handle the basics with WSI directly. Bring in an attorney or a CPA when the situation is complex, including mixed owner and employee roles, multistate payroll, questionable worker classifications, or a past period when coverage was missing. A CPA can also help you model the premium against your budget, and an attorney can advise on the exposure from an uninsured claim.
Free help is also available. The North Dakota Small Business Development Centers, hosted by the University of North Dakota Nistler College of Business and Public Administration, can help you plan the business side of hiring, including the costs you need to budget for.
Bottom Line
In North Dakota, workers' compensation is not a product you compare across carriers. It is a state requirement administered by WSI, and it applies as soon as you hire anyone who is not exempt. Get your class rate, budget for the payroll cap and the $250 minimum, calendar your quarterly reports, and post your certificate. The cost of getting it right is small compared with the back premium, penalties, and claim exposure that come with going uninsured.
This content is informational, not legal or tax advice. Confirm current rates, caps, deadlines, and exemptions with WSI at 1-800-777-5033 or workforcesafety.com, and consult a qualified attorney or CPA for your specific situation.