South Carolina Workers' Compensation Payroll Guide
South Carolina Payroll And Workers' Compensation Rules
South Carolina payroll professionals play an important role in workers' compensation administration because payroll records provide important wage, hours, employment, classification, and payment information used to administer workers' compensation claims, calculate wage-loss benefits, support insurance reporting and audits, and document an employer's compliance responsibilities.
Understanding South Carolina workers' compensation rules is especially important for payroll professionals who maintain employee records, calculate wages, process payroll after workplace injuries, respond to workers' compensation claims, or provide payroll information to an employer's insurance carrier, claims administrator, self-insurance program, or the South Carolina Workers' Compensation Commission.
South Carolina Workers' Compensation Compliance Overview
At A Glance
South Carolina generally requires businesses that regularly employ four or more employees to provide workers' compensation coverage, unless a statutory exemption applies.
Part-time workers and family members are generally counted as employees when determining whether the coverage threshold is met.
South Carolina provides specific exemptions for certain employers and workers, including certain casual employees, agricultural employees, and certain real estate salespersons and owner-operator drivers.
Employers subject to the South Carolina Workers' Compensation Act generally must obtain workers' compensation insurance or qualify as self-insured employers.
Workers' compensation insurance may be obtained through a licensed commercial insurance carrier or the state's assigned-risk program.
Employers may also apply to become self-insured or participate in an approved self-insurance fund.
Employees should report workplace injuries to their employer immediately. Failure to report an injury within 90 days may affect eligibility for benefits.
Employees generally have two years from the accident or date of death to make a workers' compensation claim.
Employers or their representatives generally have 10 days after receiving notice or knowledge of an accident to report the accident to the South Carolina Workers' Compensation Commission.
South Carolina generally has a seven-day waiting period before temporary disability compensation becomes payable.
If disability continues beyond 14 days, compensation generally becomes payable from the date of the accident.
Temporary total disability compensation is generally calculated at 66 2/3% of the employee's average weekly wage, subject to statutory limits.
For injuries occurring on or after January 1, 2026, the maximum weekly workers' compensation rate is $1,189.94.
South Carolina workers' compensation benefits can include medical treatment, temporary disability benefits, permanent disability benefits, disfigurement benefits, vocational rehabilitation, and death benefits.
Workers' compensation premiums and payroll classifications should be monitored carefully because payroll and classification information can affect premium calculations and audits.
South Carolina Workers' Compensation Employer Requirements
South Carolina generally requires businesses that regularly employ four or more employees to obtain workers' compensation insurance or qualify as self-insured employers. Certain employers and categories of workers are subject to statutory exemptions.
South Carolina Workers' Compensation Insurance
An employer subject to the South Carolina Workers' Compensation Act generally must maintain workers' compensation insurance unless it qualifies for an approved self-insurance arrangement. Coverage can generally be obtained through a licensed commercial insurance carrier or through the state's assigned-risk program.
Payroll departments should maintain current workers' compensation insurance information, including the insurance carrier, policy number, effective dates, applicable classifications, and claims administrator contact information. Payroll should coordinate with HR and management whenever employee classifications, job duties, payroll arrangements, or work locations change.
South Carolina Workers' Compensation Coverage For Employees
South Carolina generally applies its Workers' Compensation Act to businesses that regularly employ four or more employees. Part-time workers and family members are generally included when determining the number of employees. Certain statutory exemptions apply and should be reviewed before a worker is excluded from coverage.
South Carolina exemptions can include certain casual employees, agricultural employees, certain real estate salespersons, owner-operator drivers who satisfy applicable requirements, and other specifically exempt workers or employers. Employers should review the applicable statutory requirements rather than assuming that a particular job title or work arrangement creates an exemption.
South Carolina Workers' Compensation Coverage For Independent Contractors
Workers' compensation status depends on the actual employment relationship and applicable South Carolina law. Employers should not rely solely on a contract, job title, or Form 1099 when determining whether a worker is an employee or independent contractor.
South Carolina considers factors including the right or exercise of control, furnishing of equipment, method of payment, and the right to fire when evaluating whether an individual is an employee or independent contractor. The determination is fact specific.
South Carolina Workers' Compensation Coverage For Multistate Employers
Employers operating in multiple states should review South Carolina workers' compensation requirements whenever employees perform services in South Carolina. The applicable requirements can depend on the employee's work location, employment relationship, nature of the work, and other circumstances.
Payroll departments should maintain accurate records showing where employees perform services. Particular attention should be given to employees who regularly travel between states, relocate, work remotely, or perform services in multiple jurisdictions.
South Carolina Workers' Compensation Coverage Requirements
Does South Carolina Require Workers' Compensation Insurance?: Generally, yes. Businesses that regularly employ four or more employees generally must provide workers' compensation coverage unless a statutory exemption applies.
How Many Employees Must A Business Have Before Workers' Compensation Is Required In South Carolina?: Generally, four or more employees. Part-time workers and family members are generally counted when determining whether the threshold is met.
Are Part-Time Employees Covered By South Carolina Workers' Compensation?: Generally, yes. Part-time workers are generally counted as employees unless a specific exemption applies.
Are Seasonal Employees Covered By South Carolina Workers' Compensation?: Coverage depends on the employment relationship and applicable statutory exemptions. Seasonal status alone should not be assumed to eliminate coverage.
Are Corporate Officers Covered By South Carolina Workers' Compensation?: Coverage depends on the officer's status and applicable statutory provisions. Certain corporate officers may be excluded by election when the applicable requirements are satisfied.
Are LLC Members And Managers Covered By South Carolina Workers' Compensation?: Coverage depends on the individual's status and applicable statutory requirements. Employers should review the ownership and management relationship before excluding an LLC member or manager.
Are Sole Proprietors Required To Have Workers' Compensation Insurance In South Carolina?: A sole proprietor's own status differs from that of employees. A business with employees may be required to maintain workers' compensation coverage when the statutory coverage requirements are met.
Are Independent Contractors Covered By South Carolina Workers' Compensation?: The answer depends on the actual employment relationship. A contract, Form 1099, or job title does not by itself determine workers' compensation status.
Can A South Carolina Employer Self-Insure?: Yes. Employers that satisfy applicable financial and regulatory requirements may apply to become self-insured or participate in an approved self-insurance fund.
Is Occupational Accident Insurance The Same As Workers' Compensation Insurance?: No. Occupational accident insurance is a separate insurance product and should not automatically be treated as a substitute for workers' compensation coverage when South Carolina law requires coverage.
South Carolina Workers' Compensation Injury Reporting
Employee Notice Of Injury: Employees should report workplace injuries to their employer immediately. Notice should be provided to an appropriate supervisor, manager, or other employer representative.
90-Day Notice Requirement: An employee who fails to report a work-related injury within 90 days of the accident may be disqualified from receiving workers' compensation benefits, subject to applicable exceptions.
Employer Reporting: Once an employer receives notice of or has knowledge of an accident, the employer or its representative generally has 10 days to report the accident to the South Carolina Workers' Compensation Commission.
Commission Reporting: Employers and claims representatives should use the applicable South Carolina workers' compensation reporting procedures and forms when reporting workplace injuries.
Employee Claim: An employer's report of an injury does not eliminate the employee's responsibility to protect the employee's own claim rights.
Two-Year Claim Period: An employee or eligible dependent generally must make a claim within two years after the accident or date of death, subject to applicable statutory rules.
Serious Injuries: Employers should maintain internal procedures for immediately escalating serious workplace injuries and fatalities to HR, management, the carrier, and other appropriate personnel.
South Carolina Workers' Compensation Wage Information
Payroll records can be particularly important when a South Carolina workers' compensation claim involves temporary disability or other wage-loss benefits. Payroll may be required to provide wage and employment information used to determine the employee's applicable average weekly wage and compensation rate.
Employer Wage Information
South Carolina generally calculates workers' compensation benefits using the employee's average weekly wage under applicable statutory and administrative rules. Payroll should maintain complete historical wage and hours-worked records and be prepared to provide accurate information to the employer's insurance carrier, claims administrator, or self-insurance program.
Maintain complete historical wage records
Maintain hours-worked records
Track regular wages
Track overtime wages
Track bonuses and commissions
Track other compensation relevant to wage calculations
Document wage changes before the injury
Maintain accurate employment dates
Provide accurate wage information to the carrier or claims administrator
Review wage information for accuracy before submission
South Carolina Workers' Compensation Benefit Calculations
Average Weekly Wage: South Carolina workers' compensation benefits are generally based on the employee's average weekly wage under applicable statutory calculation rules.
Temporary Total Disability: An employee who is unable to work because of a compensable workplace injury may qualify for temporary total disability benefits.
Temporary Partial Disability: An employee who returns to work but earns less because of a compensable injury may qualify for partial disability benefits under applicable requirements.
Waiting Period: South Carolina generally has a seven-day waiting period before temporary disability compensation becomes payable.
Retroactive Waiting Period: If the disability continues beyond 14 days, compensation generally becomes payable from the date of the accident.
Compensation Rate: Temporary total disability compensation is generally calculated at 66 2/3% of the employee's average weekly wage, subject to statutory minimums and maximums.
Permanent Partial Disability: Qualifying employees may receive compensation for permanent disability or impairment under applicable statutory schedules and requirements.
Disfigurement: Certain qualifying employees may receive benefits for permanent disfigurement under South Carolina law.
Medical Benefits: Workers' compensation can provide necessary medical treatment for compensable work-related injuries and occupational diseases.
Vocational Rehabilitation: Qualifying injured employees may receive vocational rehabilitation services intended to assist with returning to suitable employment.
Death Benefits: Eligible dependents may receive workers' compensation benefits following a compensable work-related death.
South Carolina Workers' Compensation Rates
South Carolina workers' compensation benefit levels are separate from employer insurance premiums. Benefit amounts depend on the employee's applicable average weekly wage, the type of benefit, the date of injury, and statutory limits.
For injuries occurring on or after January 1, 2026, the maximum weekly workers' compensation rate is $1,189.94. South Carolina law generally provides a compensation rate equal to 66 2/3% of the employee's average weekly wage, subject to the applicable statutory limitations.
Workers' compensation insurance premiums are separate from employee benefit amounts. Payroll and employee classification information can affect premium calculations and audits, so employers should maintain accurate payroll and classification records.
South Carolina Workers' Compensation Medical Care
Workers' compensation medical benefits can cover necessary medical treatment for compensable work-related injuries and occupational diseases. Payroll generally does not administer medical care, but payroll information can become relevant when an employee's medical status affects work hours, wages, modified duty, or return-to-work arrangements.
Payroll should coordinate with HR and the claims administrator when medical restrictions result in changes to an employee's schedule, duties, earnings, or employment status.
South Carolina Workers' Compensation And Modified Duty
An injured employee may return to work with medical restrictions when authorized. The employee may return to the regular position, a modified-duty position, or another position that complies with applicable work restrictions.
Payroll should accurately record regular wages, reduced hours, modified-duty earnings, overtime, bonuses, and other compensation after an employee returns to work. Accurate post-injury earnings can be important when determining applicable wage-loss benefits.
Document the employee's return-to-work date
Track work restrictions through the employer's HR and workers' compensation process
Track regular and modified-duty hours
Track post-injury wages
Track overtime and additional compensation
Document changes in pay or work schedule
Provide post-injury wage information when requested by the claims administrator
Update payroll records when the employee returns to regular duty
How South Carolina Payroll And Workers' Compensation Work Together
Workers' compensation and payroll are closely connected. When an employee is injured at work, payroll may need to provide historical earnings, hours worked, employment information, wage changes, and post-injury earnings. Payroll may also become involved when an injured employee:
Misses work because of a workplace injury
Returns to work with medical restrictions
Works reduced hours
Performs modified or light-duty work
Receives wages after returning to work
Receives salary continuation or other employer-paid compensation
Experiences a change in compensation following an injury
South Carolina payroll departments should maintain a documented procedure for responding to workers' compensation claims and producing historical payroll and hours-worked information. Payroll should coordinate with HR, management, the employee's supervisor, and the workers' compensation claims administrator when an injury changes an employee's work status or compensation.
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.
Additional South Carolina Workers' Compensation Resources
Difficult Administrative Areas
South Carolina workers' compensation administration can become complicated when payroll, human resources, management, medical providers, insurance carriers, self-insured employers, claims administrators, and the South Carolina Workers' Compensation Commission must coordinate information across different parts of an employee's claim.
Determining The Correct Wage Information: Payroll should maintain accurate historical wage and hours-worked information and provide the information requested by the insurance carrier or claims administrator.
Handling Employees With Multiple Jobs Or Pay Rates: Payroll should maintain clear records showing wages, hours, duties, classifications, and applicable pay rates.
Tracking Modified-Duty Employees: Payroll should separately document regular wages, reduced hours, modified-duty earnings, overtime, and other compensation after an injured employee returns to work.
Coordinating Workers' Compensation And Paid Leave: Payroll should maintain clear records of vacation, sick leave, PTO, salary continuation, and other employer-paid compensation during a workers' compensation claim.
Handling Return-To-Work Changes: Payroll should promptly update records when an employee returns to work, changes hours, performs modified duties, changes compensation, or returns to regular duty.
Maintaining Accurate Injury And Employment Records: Payroll records should be consistent with HR, timekeeping, employment, and workers' compensation records.
Managing Subcontractor Coverage: Employers and contractors should obtain appropriate documentation concerning subcontractor workers' compensation coverage when required and should not assume that subcontractor workers are outside workers' compensation requirements.
Multistate Employees: Employers with workers performing services in multiple states should maintain accurate work-location records and coordinate workers' compensation requirements with HR and the appropriate administrator.
Responding To Payroll Information Requests: Claims administrators may request detailed wage and hours-worked information. Payroll should establish a standardized process for gathering, reviewing, and transmitting accurate information.
Protecting Confidential Employee Information: Payroll departments should limit access to employee medical, wage, and workers' compensation information to authorized personnel with a legitimate business need.
Keeping Procedures And Rates Current: South Carolina workers' compensation laws, benefit amounts, forms, reporting requirements, and administrative procedures can change. Payroll and HR departments should periodically review their procedures and verify current South Carolina requirements.
Common Errors
South Carolina workers' compensation mistakes often occur when payroll, HR, safety, and management do not have a consistent process for identifying, reporting, documenting, and administering workplace injuries.
Failing To Maintain Required Workers' Compensation Coverage: Employers subject to the Act should maintain required insurance or qualify as an approved self-insured employer.
Incorrectly Applying The Four-Employee Threshold: Employers should accurately determine whether they regularly employ four or more employees and should consider applicable rules concerning part-time workers and family members.
Incorrectly Excluding Part-Time Workers: Part-time status does not automatically establish that a worker is outside the South Carolina workers' compensation system.
Misclassifying Employees As Independent Contractors: Employers should not rely solely on a contract, job title, or Form 1099 when determining worker status.
Failing To Report An Injury Promptly: Delayed reporting can interfere with medical treatment, claim administration, and required reporting deadlines.
Failing To Meet The 90-Day Employee Notice Requirement: Employees should report workplace injuries promptly rather than waiting until the statutory notice period is close to expiring.
Failing To Report An Accident To The Commission On Time: Employers or their representatives generally have 10 days after notice or knowledge of an accident to report it to the Commission.
Using Incorrect Wage Information: Incomplete or inaccurate payroll and timekeeping records can interfere with the calculation and administration of wage-loss benefits.
Ignoring Post-Injury Earnings: Payroll should accurately record wages and hours after an employee returns to work, particularly when the employee works reduced hours or modified duties.
Failing To Track Salary Continuation And Paid Leave: Payroll should separately document employer-paid compensation, salary continuation, vacation, sick leave, and other paid leave following an injury.
Failing To Coordinate Multistate Employees: Employers should review workers' compensation requirements when employees regularly work in South Carolina and other states.
Using Outdated Benefit Information: Payroll and claims personnel should verify the maximum weekly compensation rate applicable to the employee's injury date.
Failing To Maintain Confidentiality: Workers' compensation claims may involve sensitive medical, wage, and employment information. Access should be limited to authorized personnel.
Recent Court Cases
South Carolina Workers' Compensation Commission v. WestPoint Home, LLC: Decided by the South Carolina Court of Appeals on September 17, 2025, this case involved the Commission's authority to retain a $1.8 million security deposit associated with potential workers' compensation claims of former employees following a predecessor corporation's bankruptcy. The Court of Appeals reversed and remanded the circuit court's decision concerning the Commission's continued retention of the deposit.
Russell v. Wal-Mart Stores, Inc.: Decided by the South Carolina Supreme Court on January 29, 2025, this workers' compensation case involved a claimant's entitlement to benefits and resulted in a reversal and remand with instructions. The case is relevant to the appellate review of workers' compensation claims and benefit determinations.
Brown v. Southeastern Services, H.H.I., LLC: This workers' compensation appeal concerned temporary disability payments and medical benefits. The South Carolina Court of Appeals dismissed the appeal because the order was not immediately appealable under the applicable appellate jurisdiction rules. The case illustrates the importance of understanding when a workers' compensation order is immediately appealable.
Frequently Asked Questions About South Carolina Workers' Compensation
Does South Carolina require employers to carry workers' compensation insurance?: Generally, yes. Businesses that regularly employ four or more employees generally must provide workers' compensation coverage unless a statutory exemption applies.
How many employees must a business have before workers' compensation is required in South Carolina?: Generally, four or more employees. Part-time workers and family members are generally counted when determining whether the threshold is met.
Are part-time employees covered by South Carolina workers' compensation?: Generally, yes. Part-time status alone does not exclude an employee from coverage.
Are seasonal employees covered by South Carolina workers' compensation?: Coverage depends on the employment relationship and applicable statutory exemptions. Seasonal status alone should not be assumed to eliminate coverage.
Are corporate officers covered by South Carolina workers' compensation?: Coverage depends on the officer's ownership, duties, and applicable statutory provisions. Certain corporate officers may qualify for exclusion by election.
Are LLC members and managers covered by South Carolina workers' compensation?: Coverage depends on the individual's status and applicable statutory requirements. Employers should review the applicable ownership and management provisions before excluding an individual.
Are sole proprietors required to have workers' compensation insurance in South Carolina?: A sole proprietor's own status differs from that of employees. A business with employees may generally be required to provide workers' compensation coverage when the statutory requirements are met.
Are independent contractors covered by South Carolina workers' compensation?: The answer depends on the actual employment relationship and applicable South Carolina law. A contract, Form 1099, or job title does not by itself determine workers' compensation status.
How quickly should an employee report a workplace injury in South Carolina?: Employees should report workplace injuries immediately. Failure to report an injury within 90 days may disqualify an employee from receiving benefits, subject to applicable exceptions.
How long does an employee have to file a South Carolina workers' compensation claim?: An employee or eligible dependent generally must make a claim within two years after the accident or date of death, subject to applicable statutory requirements.
How are South Carolina workers' compensation benefits calculated?: Temporary total disability compensation is generally calculated at 66 2/3% of the employee's average weekly wage, subject to applicable statutory minimums and maximums.
What is the South Carolina workers' compensation waiting period?: South Carolina generally has a seven-day waiting period for temporary disability compensation. If disability continues beyond 14 days, compensation generally becomes payable from the date of the accident.
What payroll records are important for a South Carolina workers' compensation claim?: Important records can include wages, hours worked, overtime, bonuses, commissions, employment dates, wage changes, job classifications, pre-injury earnings, post-injury earnings, modified-duty wages, salary continuation, paid leave, and other compensation information relevant to the claim.
What happens when an injured South Carolina employee returns to work?: An injured employee may return to regular or modified work depending on medical restrictions and the circumstances of the claim. Payroll should accurately track hours, wages, duties, restrictions, and changes in compensation.
Does South Carolina provide vocational rehabilitation for injured workers?: South Carolina workers' compensation can provide vocational rehabilitation services for qualifying injured workers when appropriate to assist with returning to suitable employment.
What is the South Carolina workers' compensation maximum benefit for 2026?: For injuries occurring on or after January 1, 2026, the maximum weekly workers' compensation rate is $1,189.94.
What are common South Carolina workers' compensation payroll mistakes?: Common mistakes include failing to maintain required coverage, incorrectly applying the four-employee threshold, misclassifying workers, delaying injury reporting, failing to meet reporting deadlines, using inaccurate wage information, failing to document post-injury earnings, overlooking modified-duty changes, and using outdated benefit information.
Where can employers find official South Carolina workers' compensation information?: Official information is available through the South Carolina Workers' Compensation Commission, including information concerning coverage, claims, benefits, rates, forms, employer responsibilities, reporting, and self-insurance.
