North Dakota WSI Contractor Requirements

Why North Dakota's Workers' Comp System Is Different

North Dakota operates one of four monopolistic state workers' compensation funds in the country. The others are Ohio, Washington, and Wyoming. "Monopolistic" means exactly what it sounds like: private workers' compensation insurance policies are not valid in North Dakota. You cannot shop for workers' comp from GEICO, State Farm, or your current insurance broker. Every employer must enroll directly with Workforce Safety & Insurance (WSI), the state agency that administers the fund.

For contractors, this isn't optional background information — it's a hard requirement for your state license application. The FirstStop Portal will not process a contractor license without WSI verification.

Two Paths Based on Your Employee Status

If you have employees (W-2 workers): Register with WSI as an employer. Submit a payroll estimate based on your expected wage costs, pay the required premium deposit, and obtain a Certificate of Payment. This certificate is the document you upload to FirstStop during your contractor license application.

WSI premiums are calculated based on your industry classification and payroll volume. Construction trades generally carry higher rates due to injury risk. Premiums are ongoing — you report actual payroll quarterly and WSI adjusts your account accordingly.

If you're a sole proprietor or single-member LLC with no employees: File a Verification of Non-Employment form with WSI. Once processed, WSI issues a Letter of Good Standing. This letter replaces the Certificate of Payment for your license application.

The Letter of Good Standing certifies that you don't have employees and therefore don't owe WSI premiums. It remains valid as long as your employment status doesn't change.

The Moment You Hire, Everything Changes

The Verification of Non-Employment is not a permanent exemption. The instant you bring on your first W-2 employee — even a part-time helper for a single project — your Letter of Good Standing becomes invalid. You must immediately:

1. Contact WSI to cancel the non-employment verification
2. Register as an employer
3. Submit a payroll estimate
4. Pay the premium deposit
5. Begin reporting and paying premiums on all covered wages

Attempting to maintain non-employment status while using W-2 workers is a violation that WSI actively investigates. The penalty structure makes it a very expensive gamble.

Penalty Structure: $10,000 Plus $100 Per Day

WSI enforcement carries real financial teeth. A contractor operating with employees and no WSI coverage faces:

• An initial fine of up to $10,000
• An additional $100 per day for each day of continued non-compliance

WSI conducts audits and responds to complaints, and the state contractor license database makes it easy to cross-reference licensed contractors against WSI enrollment records.

Out-of-State Workers' Comp Doesn't Count

If you're a Minnesota, Montana, or South Dakota contractor working on a project in North Dakota, your home state workers' comp policy does not cover your employees while they're on a North Dakota job site. You must enroll with WSI separately.

The "significant contacts" test determines when enrollment becomes mandatory: if you hire a North Dakota resident, or if any employee earns 25% or more of their gross annual wages for ND work, registration is required. For contractors on multi-month projects in the Bakken region or the Fargo metro, this threshold gets hit quickly.

The Stop-Gap Insurance Gap

Because WSI is a workers' compensation fund only, it doesn't include Employer's Liability coverage. In most states, these two coverages come bundled in a single policy. North Dakota's monopolistic system creates a gap.

Employer's Liability covers situations where an employee sues you for a work-related injury outside the WSI system — certain third-party claims, claims alleging intentional conduct, and similar scenarios. Without it, your WSI coverage handles the statutory workers' comp claim, but the civil lawsuit has no coverage responding.

The fix is a Stop-Gap endorsement on your commercial general liability policy. This endorsement fills the Employer's Liability gap. Not every broker automatically includes it, and some national carriers are unfamiliar with the monopolistic-state requirement. Ask for it specifically and confirm it's on your policy.

WSI Verification During License Renewal

WSI compliance isn't a one-time requirement. Every annual license renewal on March 1 requires current WSI verification. If you've fallen behind on premium payments, your Certificate of Payment lapses, and your renewal application gets held.

During renewal, you also certify under penalty of perjury that all unemployment insurance premiums with Job Service North Dakota are fully paid. WSI and Job Service are separate agencies — being current with one doesn't guarantee compliance with the other.

Our North Dakota General Contractor License Guide includes a WSI enrollment walkthrough, premium tracking templates, and the Stop-Gap endorsement specifications to hand to your insurance broker.

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