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North Dakota Workers' Compensation Payroll Department Guide

North Dakota takes a unique approach to workers' compensation. With limited statutory exceptions, employers are required to provide workers' compensation coverage for their employees through Workforce Safety & Insurance (WSI), North Dakota's exclusive workers' compensation insurance provider.

Payroll departments play an important role in North Dakota workers' compensation administration because WSI uses payroll information to calculate workers' compensation premiums. Accurate wage, classification, employment, and work-status records are also important when an employee is injured and a claim must be reported or benefits administered.

North Dakota Workers' Compensation At A Glance

• North Dakota generally requires employers to provide workers' compensation coverage for their employees.
• Workforce Safety & Insurance (WSI) is the state's exclusive workers' compensation provider and administrator.
• Coverage generally applies from the first day and first dollar of employment, subject to statutory exceptions.
• Limited statutory exceptions apply to certain owners, partners, corporate officers, spouses, farm and ranch labor, and other specifically excluded workers.
• Employers must report payroll to WSI because payroll is used to calculate workers' compensation premiums.
• WSI generally requires quarterly payroll reporting for employers with mandatory coverage.
• Payroll reports are submitted through WSI's myWSI online portal.
• WSI premiums are based on taxable remuneration and the applicable employment classification rate.
• Reportable remuneration can include commissions, bonuses, overtime, reportable tips, vacation and sick pay, allowances, and certain pretax deductions.
• The maximum taxable payroll for each worker is subject to an annual wage cap.
• Workers' compensation premiums cannot be deducted from employee wages.
• Employees should promptly report workplace injuries to their employer.
• Employers generally must file a First Report of Notice of Injury with WSI within seven days after receiving notice from the employee.
• Payroll should maintain accurate wage, classification, hours, and post-injury earnings information.
• North Dakota employers may use a Designated Medical Provider (DMP) program.
• Modified-duty and return-to-work programs can help injured employees return to productive employment.

North Dakota Workers' Compensation Compliance Overview

North Dakota workers' compensation is administered by Workforce Safety & Insurance (WSI), a state agency that provides workers' compensation coverage for North Dakota employers. North Dakota law generally requires employers to insure their employees, subject to limited statutory exceptions.

Unlike states in which employers typically choose among private workers' compensation insurance carriers, North Dakota generally provides workers' compensation coverage through WSI.

This makes the employer's relationship with WSI particularly important for payroll and human resources departments. WSI uses reported payroll to calculate workers' compensation premiums, making accurate payroll reporting an important part of compliance.

Payroll departments generally do not determine whether an injury is compensable or make medical decisions. Their primary responsibilities are to maintain accurate payroll and employment records, provide information needed for claims administration, properly report payroll to WSI, and coordinate payroll changes resulting from an employee's injury or return to work.

North Dakota Workers' Compensation Employer Requirements

North Dakota employers should:

• Obtain workers' compensation coverage through WSI when required.
• Maintain an active WSI account in good standing.
• Report required payroll information to WSI.
• Properly classify employees for workers' compensation purposes.
• Pay workers' compensation premiums and assessments when due.
• Never deduct workers' compensation premiums from employee wages.
• Post proof of workers' compensation coverage as required.
• Maintain accurate employee and employment records.
• Establish procedures for promptly reporting workplace injuries.
• File the First Report of Notice of Injury within the applicable deadline.
• Cooperate with WSI during claims administration.
• Maintain accurate wage information for injured employees.
• Track modified-duty work, reduced hours, and post-injury earnings.
• Update payroll records when an injured employee returns to work.

WSI provides employers with proof of coverage and account-management services through its online systems.

North Dakota Workers' Compensation Coverage Requirements

North Dakota law generally requires employers to provide workers' compensation coverage for employees, including full-time, part-time, seasonal, and occasional workers, subject to statutory exceptions.

Certain individuals and types of employment may be excluded from mandatory coverage. Examples can include certain owners, partners, corporate officers, spouses, farm and ranch labor, household domestic workers, and other specifically identified workers.

Because statutory exclusions can be fact-specific, employers should verify current WSI requirements before treating a worker as exempt. WSI also provides elective coverage options for certain otherwise exempt individuals.

North Dakota Workers' Compensation Payroll Reporting

Payroll reporting is a central part of North Dakota workers' compensation administration.

WSI uses employer payroll information to calculate workers' compensation premiums. Employers with mandatory coverage generally submit payroll information quarterly through the myWSI online portal.

Payroll reports are generally due 30 days after the end of the applicable reporting period. Late or missing payroll reports can result in penalties and continued failure to report may lead to an uninsured status.

Payroll departments should establish procedures to:

• Review payroll before submitting each WSI report.
• Verify employee classifications.
• Confirm wages are assigned to the correct classification.
• Include all reportable remuneration.
• Review employees who have started or ended employment.
• Reconcile payroll reported to WSI with payroll records.
• Monitor significant changes in projected payroll.
• Retain documentation supporting reported payroll.
• Monitor WSI reporting deadlines.

Payroll departments can manage workers' compensation payroll reporting through myWSI .

North Dakota Workers' Compensation Reportable Payroll

WSI defines remuneration broadly for workers' compensation premium purposes. Payroll departments should review WSI's current rules rather than assuming that an item excluded from federal or state taxable wages is also excluded from workers' compensation payroll.

Reportable remuneration can include:

• Regular wages.
• Commissions.
• Bonuses.
• Overtime or extra pay.
• Reportable tips.
• Allowances.
• Holiday pay.
• Vacation pay.
• Sick leave pay.
• Certain pretax deductions.
• Employee contributions to deferred compensation arrangements.
• Certain 401(k), annuity, cafeteria-plan, medical reimbursement, and flexible spending contributions.
• Davis-Bacon wages.
• The value of meals, lodging, or other gratuities provided as compensation.

Dismissal or severance pay is generally not included in remuneration for WSI premium purposes.

North Dakota Workers' Compensation Premium Calculations

WSI calculates workers' compensation premiums by applying the rate for an employee's classification to taxable payroll assigned to that classification.

Employers with multiple classifications may therefore have different rates applied to different portions of their payroll. Classification accuracy is important because WSI's classification and rate system reflects differences in occupational risk, medical costs, and benefit levels.

WSI also applies a maximum taxable payroll for each worker. The wage cap is based on 70% of North Dakota's average annual wage and becomes effective July 1 of each year.

Payroll should review:

• Employee classifications.
• Taxable remuneration.
• Wages assigned to each classification.
• The applicable annual wage cap.
• Changes in job duties.
• Employees working in multiple classifications.
• Significant changes in projected payroll.

North Dakota Workers' Compensation Injury Reporting

North Dakota law requires employees to notify their employer when they are involved in an accident while on the job and to provide the general nature of the injury when apparent.

Notice should be provided immediately when possible. Absent good cause, notice generally may not be given later than seven days after the accident or after the general nature of the injury becomes apparent.

After receiving notice of an injury, the employer generally must file a First Report of Notice of Injury with WSI within seven days.

Payroll should have a process for immediately notifying HR, management, or the designated workers' compensation contact when an injury may affect:

• Hours worked.
• Wages.
• Attendance.
• Work status.
• Overtime.
• Modified duty.
• Paid leave.
• Salary continuation.
• Return-to-work status.

North Dakota Workers' Compensation Payroll Records

Payroll should maintain complete and accurate information that can be provided to WSI when an injury occurs or when wage information is needed during claims administration.

Important records may include:

• Employee name and identification information.
• Hire date.
• Termination date, when applicable.
• Job title and duties.
• Workers' compensation classification.
• Work location.
• Regular wages.
• Hours worked.
• Regular pay rate.
• Overtime.
• Bonuses.
• Commissions.
• Reportable tips.
• Allowances.
• Pre-injury earnings.
• Post-injury earnings.
• Reduced hours.
• Modified-duty wages.
• Salary continuation.
• Paid leave.
• Other employer-paid compensation.

Payroll should ensure that information provided to WSI is consistent with payroll, timekeeping, HR, and personnel records.

North Dakota Workers' Compensation Benefit Administration

Qualifying North Dakota workers' compensation claims may provide benefits associated with work-related injuries and occupational diseases. Depending on the circumstances, benefits can include medical care, disability benefits, rehabilitation services, and other benefits provided by law.

Payroll's role is generally administrative rather than medical. Payroll should provide accurate wage information and correctly process payroll changes resulting from an employee's workers' compensation claim.

When an employee receives workers' compensation wage-loss benefits, payroll should coordinate with HR and the workers' compensation administrator to determine how those benefits interact with:

• Regular wages.
• Salary continuation.
• Paid sick leave.
• Vacation or PTO.
• Modified-duty wages.
• Other employer-paid compensation.

North Dakota Workers' Compensation Medical Care

North Dakota has a Designated Medical Provider (DMP) process that can affect where an injured employee initially receives treatment.

Employers participating in the DMP process should make sure employees receive the required information concerning the designated provider and that appropriate documentation is maintained.

Payroll generally does not select medical providers or make medical determinations. However, payroll should properly document information concerning work restrictions and changes in work status that affect compensation.

North Dakota Workers' Compensation Modified Duty

An injured employee may be able to return to work with restrictions or modified duties while recovering from a workplace injury.

Payroll should accurately document:

• Date modified duty begins.
• Modified job duties.
• Hours worked.
• Reduced hours.
• Modified-duty wages.
• Changes in pay rates.
• Overtime eligibility.
• Paid leave.
• Other compensation.
• Changes in work restrictions.

North Dakota Workers' Compensation Return-To-Work

Employers can play an important role in helping injured employees return to productive employment.

Payroll should promptly update its records when an employee returns to work and coordinate the change with HR and the workers' compensation administrator.

Payroll should:

• Record the return-to-work date.
• Determine whether the employee returned to regular or modified duties.
• Track applicable work restrictions.
• Record changes in hours.
• Record changes in wages.
• Track post-injury earnings.
• Coordinate paid leave with the employee's work status.
• Maintain documentation supporting payroll calculations.

North Dakota Workers' Compensation Employee Classifications

Employee classification is important in North Dakota because WSI uses employment classifications to determine workers' compensation premium rates.

Payroll and HR should periodically review:

• Employee job titles.
• Actual job duties.
• Work locations.
• Changes in responsibilities.
• Employees working in multiple job functions.
• New employees.
• Transfers between departments.
• Independent-contractor relationships.
• Potential statutory coverage exclusions.

Employers should not rely solely on a job title, contract, or Form 1099 when determining whether a worker is an employee or independent contractor. Classification should be reviewed based on the actual circumstances and applicable North Dakota requirements.

North Dakota Workers' Compensation Administrative Challenges

North Dakota payroll departments may encounter challenges involving:

• Determining whether a worker is subject to mandatory WSI coverage.
• Applying statutory coverage exclusions.
• Understanding elective coverage.
• Correctly classifying employees.
• Determining which compensation is reportable remuneration.
• Calculating taxable payroll.
• Applying the annual wage cap.
• Reconciling payroll reports with WSI records.
• Meeting quarterly payroll reporting deadlines.
• Tracking employees who work across state lines.
• Handling out-of-state employees and remote workers.
• Coordinating workers' compensation payments with regular payroll.
• Tracking modified-duty wages.
• Calculating post-injury earnings.
• Maintaining accurate records for claims.
• Coordinating payroll information with HR and WSI.
• Maintaining current WSI coverage and payment information.

North Dakota employers with employees working in other states should also review the workers' compensation requirements of those states. WSI notes that North Dakota coverage may not apply to employees who do not work in North Dakota.

Common North Dakota Workers' Compensation Payroll Errors

• Assuming workers' compensation coverage is optional.
• Failing to establish WSI coverage before employees begin work.
• Treating a worker as exempt without verifying the applicable exception.
• Misclassifying employees.
• Failing to report all required remuneration.
• Incorrectly excluding bonuses or commissions from WSI payroll.
• Failing to account for reportable pretax deductions.
• Applying the wrong classification rate.
• Failing to apply the current wage cap.
• Failing to submit quarterly payroll reports.
• Submitting payroll reports after the deadline.
• Reporting inaccurate payroll to WSI.
• Deducting workers' compensation premiums from employee wages.
• Failing to maintain proof of coverage.
• Delaying workplace injury reporting.
• Failing to file the First Report of Notice of Injury within seven days.
• Failing to document reduced or modified-duty hours.
• Failing to track post-injury earnings.
• Processing workers' compensation payments incorrectly through payroll.
• Failing to coordinate payroll and HR records.
• Failing to update payroll when an employee returns to work.
• Assuming federal or state taxable wages are identical to WSI reportable remuneration.

Support And Training Resources

Recommended Workers' Compensation Training

• How Workers' Compensation Works
  Learn the fundamentals of workers' compensation, including claims, benefits, employer responsibilities, and return-to-work considerations.


• Workers' Comp Premium Control: Experience Mods, Classifications, and Audit Mastery
  Develop a stronger understanding of workers' compensation classifications, experience modification factors, premium management, and insurance audits.


• Workers' Comp Workers' Recovery Professional Associate Certification
  Build specialized knowledge for professionals involved in workers' compensation and employee recovery.

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