The North Carolina Industrial Commission recently released its Annual Report for Fiscal Year 2025, providing an insight into claim volume, dispute resolution activity, enforcement efforts, and compliance trends across the workers’ compensation system. While much of the data confirms what the industry is already seeing in day-to-day practice, the report highlights several areas worth closer attention.

Below are some key takeaways from the FY 2025 report and what they mean in practice for employers, carriers, and counsel.

Workers’ Compensation Claim Volume Remains High:

During FY 2025, the Industrial Commission opened nearly 57,000 workers’ compensation cases, reflecting continued high utilization of the system. Despite the high number of claims filed, the number of hearings held by Deputy Commissioners remained relatively modest compared to overall filings, reinforcing that most claims continue to resolve without formal evidentiary hearings.

Mediation Continues to Be the Primary Resolution Tool:

Mediation remains the primary type of dispute resolution at the Commission. In FY 2025:

• • More than 8,600 cases were referred to mediation
  • The overall mediation settlement rate remained approximately 70%

These figures are consistent with prior years and confirm that mediation remains the most effective path to resolution in contested claims.

Practice Pointer: Treat mediation as a meaningful resolution opportunity, not a procedural hurdle. Preparation, authority, and realistic exposure analysis continue to drive successful outcomes.

Medical Motion Practice and Expedited Matters:

Medical motion practice remains a significant component of Commission activity, with over 1,400 medical motion orders issued during the fiscal year. The Commission also continued to resolve expedited and emergency medical motions within the statutory timeframes.

Increased Focus on Compliance and Enforcement:

The FY 2025 report reflects substantial enforcement activity by the Compliance and Criminal Investigations Divisions, particularly with respect to non-insured employers and misclassification issues.

Highlights include:

• • Tens of thousands of cases reviewed through fraud and compliance reporting systems
  • Millions of dollars in penalties assessed, with significant amounts collected
  • Hundreds of employers brought into compliance during the fiscal year

The Commission also reported ongoing use of data-driven tools to identify potential noncompliance across multiple industries.

Practice Pointer: Employers, particularly those operating in higher-risk or labor-intensive industries should periodically review workers’ compensation coverage, subcontractor relationships, and classification practices to avoid unexpected enforcement exposure.

Forms Compliance and Sanctions Remain a Priority:

The Annual Report emphasizes the Commission’s continued monitoring of compliance with Form 60, 61, and 63 filing requirements. The Commission again notes that failure to timely accept or deny a claim can result in sanctions (most commonly a $400 penalty), which are difficult to avoid once assessed.

Practice Pointer: When a claim file changes hands or coverage questions arise, verify filing timelines immediately. Duplicate files, reporting delays, and early notice issues continue to be common sources of avoidable sanctions.

Appeals and Full Commission Activity:

Appeals to the Full Commission remained steady in FY 2025, with hundreds of appeals filed and over 500 Full Commission orders issued. While appeals are important, the numbers reflect that most disputes continue to be resolved at earlier stages of the process.

Practice Pointer: When evaluating whether to appeal, carefully weigh the cost and time involved against the likelihood of changing the outcome, particularly in fact-intensive cases driven by credibility and medical causation.

Legislative Recommendations to Watch:

The Commission again included legislative recommendations in its Annual Report, including:

• • Removing term limits for Deputy Commissioners
  • Clarifying law-enforcement authority for Commission investigators
  • Creating greater consistency in how business entities are treated under the definition of “employee”

While these proposals may not result in immediate statutory changes, they signal areas where the Commission sees recurring issues in administration and enforcement.

Bottom Line:

The FY 2025 Annual Report reflects a high-volume, mediation-driven system with an increasing emphasis on compliance, enforcement, and procedural efficiency. For employers and carriers, the message is consistent: early reporting, timely decision-making, and proactive claim management remain the best tools for controlling exposure and avoiding unnecessary disputes.

If you would like help evaluating how these trends may impact your claims handling or compliance practices, experienced counsel can help navigate the evolving workers’ compensation landscape in North Carolina.