North Dakota has exactly one workers' comp carrier, and you enroll before the first hire

North Dakota is one of four states with a monopolistic workers' compensation fund — meaning commercial cleaning companies cannot purchase WC from a private carrier and must enroll exclusively with North Dakota Workforce Safety & Insurance (WSI). This singular requirement, combined with right-to-work status, a sales tax system that treats some cleaning-related services as taxable, and North Dakota's small-business-friendly regulatory posture, creates a compliance profile that is straightforward once the WSI enrollment process is complete.

State Fund Workers' Compensation — WSI, Exclusive and Mandatory

North Dakota's Workforce Safety & Insurance (WSI) is the sole provider of workers' compensation coverage for North Dakota employers — no private carrier alternative exists. All employers with one or more employees must purchase coverage from WSI, headquartered at 1600 E. Century Avenue, Suite 1, Bismarck, ND 58503, (701) 328-3800 / (800) 777-5033. Fax for First Report of Injury: (701) 328-3820 or (888) 786-8695; mail: P.O. Box 5585, Bismarck, ND 58506-5585. WSI uses its own classification system: per the 2024–25 WSI Classification Manual, commercial cleaners and laundries fall under WSI class code 2583 with a manual rate of $2.09 per $100 of payroll (experience-adjusted rate: $1.88). Sole proprietors may elect WSI coverage voluntarily. Corporate officers must carry WSI unless they formally file an exemption election. Enrollment is required before the first North Dakota employee begins work.

Right-to-Work Status and Labor Market

North Dakota is a right-to-work state under North Dakota Century Code § 34-01-14. No employee may be compelled to join or financially support a labor union as a condition of employment. North Dakota's labor market is historically tight, with unemployment rates consistently below the national average. Cleaning companies in Fargo and Williston typically pay $14–$18/hour for janitorial workers to remain competitive — well above the state minimum wage of $7.25/hour (federal floor). The North Dakota Department of Labor and Human Rights enforces anti-discrimination law, wage and hour rules, and requires posting of the NDDLHR informational poster at all business locations.

Sales Tax — North Dakota's Mixed Treatment for Cleaning

North Dakota imposes a 5% statewide sales tax under North Dakota Century Code § 57-39.2. Unlike states with blanket exemptions for cleaning labor, North Dakota taxes some building and facility-related service transactions. The North Dakota Office of State Tax Commissioner, 600 E. Boulevard Ave., Dept. 127, Bismarck, ND 58505, (701) 328-1246, has clarified that garbage and solid waste disposal services are subject to a 4% special rate, and that tangible property transferred as part of a bundled service contract creates taxable transactions on the materials component. BSCs should contact the Tax Commissioner to confirm the taxability of their specific contract structure — particularly for bundled cleaning + supply contracts where chemicals or paper goods are explicitly billed. Local jurisdictions add up to 3% in sales tax; combined rates in Fargo reach approximately 8.5%.

Business Registration and Entity Formation

North Dakota businesses register with the North Dakota Secretary of State, 600 E. Boulevard Ave., Dept. 108, Bismarck, ND 58505, (701) 328-4284. LLC formation costs $135; corporations pay $100. Expedited 24-hour processing: additional $20. Sole proprietors using a trade name file a Trade Name Certificate ($25). North Dakota has no statewide general business license for service companies. The City of Fargo requires a Fargo Business License ($10 initial, $10 annual renewal). Bismarck, Minot, and Grand Forks each have separate municipal business license processes that cleaning companies should verify before commencing operations within those city limits.

Unemployment Insurance — Job Service North Dakota

North Dakota UI is administered by Job Service North Dakota, 1000 E. Divide Avenue, P.O. Box 5507, Bismarck, ND 58506, (701) 328-2814. Employers become liable once they pay $1,500 in wages in any quarter or employ one or more workers in 20 different weeks. The taxable wage base is $44,200 per employee — among the highest in the nation. New employer UI rate is approximately 1.12% (non-construction). Experienced rates range from 0.08% to 9.97%. Quarterly reports and payments are due the last day of the month after each quarter. Register through Job Service North Dakota's online portal.

Independent Contractor Classification

North Dakota applies a common-law right-to-control test for UI and WC classification — the state does not use an ABC test. The primary factors are: behavioral control (does the company dictate how the work is done?), financial control (does the worker invest in their own tools and bear financial risk?), and the relationship type (permanent, with benefits, exclusively for one company?). North Dakota's small-business culture leads many operators to use informal "contractor" arrangements, but WSI and Job Service North Dakota both conduct compliance audits of cleaning companies. Without written independent contractor agreements, evidence of multiple clients, and the contractor's own equipment, reclassification findings result in retroactive WSI premium assessments and UI back-tax liability plus penalties.

Local and Government Contract Requirements

State facility cleaning contracts are procured through the North Dakota Office of Management and Budget (OMB) using a competitive bid process. State contracts require commercial general liability of $500,000 per occurrence and proof of WSI coverage. Performance bonds are required for public contracts over $25,000 under North Dakota Century Code § 48-01.2-01 (typically 5%–10% of contract value). BSCs bidding on federal facilities in North Dakota (Air Force bases, federal land management offices) must register in SAM.gov and comply with the Service Contract Act prevailing wage schedule for North Dakota janitorial classifications.

OSHA Coverage and Chemical Safety Notes

North Dakota does not operate a state-plan OSHA program. Federal OSHA Region VIII (Denver, (720) 264-6550) covers all North Dakota private-sector workplaces. Key requirements: HazCom (29 CFR 1910.1200) with SDS binders and annual employee training; PPE standard (29 CFR 1910.132); and bloodborne pathogen standard for healthcare-setting crews. BSCs servicing oil and gas facilities in the Bakken Formation should comply with petroleum hazard communication requirements and North Dakota's H₂S safety training protocols for confined areas.

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