South Carolina requires most employers to carry workers' compensation insurance, and the penalties for non-compliance are immediate and financially serious. Unlike Texas, which allows most private employers to opt out of the system, South Carolina has a clear mandate with a four-employee threshold that applies across nearly every industry.

For Myrtle Beach and Grand Strand businesses — hotels, restaurants, construction contractors, retail shops, and the full range of businesses that serve the coastal tourism economy — understanding what the state requires, who is exempt, and what coverage actually costs is the starting point for compliance.

SC workers comp requirements: who needs coverage

The South Carolina Workers' Compensation Commission requires most private employers to carry workers' compensation insurance once they regularly employ four or more employees. That threshold includes:

Part-time employees: Part-time workers count toward the four-employee threshold. Three full-time employees plus two part-timers means you have five employees for workers' comp purposes.

Family members on payroll: A spouse, child, or other family member who receives wages from your business counts as an employee. The family relationship doesn't create an exemption.

Seasonal workers: For Myrtle Beach businesses that staff up significantly for the summer season, seasonal employees count during the periods they're employed. If hiring summer staff pushes you past four employees, you need coverage in place before they start.

There's also a payroll threshold: businesses with an annual payroll of less than $3,000 are exempt. In practical terms, if you're paying employees at all in 2026, you almost certainly exceed $3,000 annually.

The SC Workers' Compensation Commission (wcc.sc.gov) is the authoritative source for current requirements. As an employer, confirming your specific obligations with the Commission or a licensed insurance professional is advisable before making coverage decisions.

Exemptions and special cases

Several categories of workers and employers are exempt from South Carolina's workers' compensation requirements:

Casual employees: Workers hired for occasional, incidental work unrelated to the employer's regular business operations. This exemption is narrow and often misapplied — a day laborer hired regularly for construction cleanup likely doesn't qualify as a casual employee.

Agricultural employees: Farm workers are generally exempt from South Carolina workers' compensation requirements, though agricultural employers can elect coverage voluntarily.

Independent contractors: Independent contractors are not employees and don't trigger the workers' comp requirement for the business engaging them. However, South Carolina courts apply specific tests to determine whether a worker is truly an independent contractor. Misclassifying an employee as a contractor is one of the most common workers' comp violations.

Sole proprietors and single-member LLCs: Can elect to be excluded from coverage or can choose to include themselves. General contractors should be aware that subcontractors' employees may be considered employees of the general contractor for workers' comp purposes if the subcontractor doesn't maintain their own coverage.

Cost of workers comp insurance in SC

Workers' compensation premiums in South Carolina are priced as a rate per $100 of payroll, multiplied by the employee's job classification code, multiplied by your experience modification factor (EMR). The EMR compares your claims history to what a typical business in your industry would have — a clean record produces an EMR below 1.0, which reduces your premium. A history of claims produces an EMR above 1.0, which increases it.

The statewide average workers' comp rate in South Carolina is approximately $1.30 per $100 of payroll across all industries, according to SmallBizHandbook's 2026 data — which produces an average monthly cost of around $55 for a small business. But that average conceals an enormous range. Office and professional businesses pay much less per $100 of payroll. Construction, roofing, and marine industries pay significantly more.

For a Myrtle Beach restaurant with $500,000 in annual payroll at a rate of approximately $2.00 per $100, the annual workers' comp premium runs around $10,000. For a construction contractor with the same payroll but a much higher class code rate, the premium can be several times that amount.

Filing a workers comp claim in SC

When an employee is injured on the job, South Carolina employers must file a First Report of Injury with their insurer promptly — typically within 10 days of the injury. The insurer then has specific obligations to acknowledge the claim and begin the claims management process. Medical treatment for covered injuries must be authorized through the approved treating physician system.

Workers' comp benefits in South Carolina include medical treatment with no cap on duration for as long as medically necessary, temporary total disability benefits at 66.67% of the average weekly wage up to a maximum of $1,134.43 per week (2025 rate), and permanent disability benefits based on impairment ratings for injuries that result in lasting limitations.

Penalties for not having workers comp in SC

The consequences for operating without required workers' compensation coverage in South Carolina are immediate and cumulative. The SC Workers' Compensation Commission can issue stop-work orders that shut down your business operations. Civil fines run $100 per day per employee for the period of non-compliance. Repeat violations face $500 per day per employee. These amounts accumulate daily until compliance is established.

Beyond the fines, an employer operating without coverage who has an employee injured on the job faces direct personal liability for all medical costs, wage replacement, and disability benefits that workers' comp would have covered. In a serious injury case, that exposure can reach hundreds of thousands of dollars with no policy to respond.

Get a workers comp quote for your business

Moore & Associates works with Myrtle Beach and Grand Strand businesses to find competitive workers' compensation coverage across multiple carriers. For a free quote on commercial insurance in Myrtle Beach including workers' compensation, call (843) 839-5076 or contact us online. We serve businesses throughout Myrtle Beach, North Myrtle Beach, Murrells Inlet, Surfside Beach, Conway, Pawleys Island, Litchfield, and Georgetown.