Adaptations To Workers’ Compensation Class Codes Help Employers Support Their People.
The pandemic pushed businesses to make drastic changes—practically overnight. In a time when no one knew what would happen next, employers made in-the-moment decisions to sustain their operations. Some moved to a remote work environment. Others continued compensating their people while they were not performing their normal job functions.
The workers’ compensation picture evolved in a hurry. As a result, the insurance industry stepped in—and stepped up its efforts to help employers adapt coverage based on their changing businesses.
Since the COVID-19 crisis began, Deeley has partnered with industry consultants and carriers to stay ahead of changes to workers’ compensation. We can help employers navigate the new landscape and leverage opportunities. These important adjustments could help your business thrive in a dynamic environment:
CLASS CODES.
The National Council on Compensation Insurance (NCCI) is the industry’s largest workers’ compensation data and rating organization. NCCI created a new WC class code for Paid Furloughed Employees. This gives relief to employers who are doing all they can to keep their workforce intact and help employees maintain their lifestyles. Payments to employees using the new code, 0012, will be excluded from payroll amounts used in calculating the cost of workers’ compensation premiums.
ROLE CHANGES.
Employees’ roles and responsibilities might have changed as businesses adapted. For example, team members working in a retail showroom may have been repositioned to work from home and take orders by phone when the store closed temporarily. And contractors that may have reduced their workforce, are now hiring subs. If this is you, be sure to obtain proof of workers compensation from your subs, otherwise their costs can be charged to you as payroll on your policy.
COVID-19 CLAIMS.
The insurance industry responded proactively to businesses’ needs by allowing workers’ compensation claims attributed to COVID-19 to be coded as Extreme Loss Events. By creating a catastrophic claims code for the pandemic, those filed claims are not held against employers and will not impact ratings and policies at renewal time.
How has your workplace changed over the last few months? Let’s talk about it and discuss what workers’ compensation adjustments can alleviate economic stress and set you up for a successful renewal.
Prepare For Your Audit
When your workers’ compensation insurance policy was issued, your premium amount was based on estimated payroll figures. Typically, the premium audit process occurs at the end of your policy term and uses your actual payroll to determine your final premium.
HAVE THESE RECORDS AVAILABLE:
- Description of the business operation(s)
- List of business location(s)
- Payroll records
- Payroll breakdowns by state and classification
- Overtime pay breakdowns by state and classification
- Individual earnings cards / reports
- 941s and Form 940
- W-2s and Form W-3
- Profit and loss statement
- Cash disbursements
- Certified payrolls on OCIP / CCIP jobs
- Sales journal / cash receipts
- Certificates of Insurance for subcontractors
- List of officers and their responsibilities
- Clerical employees and their job duties
- 1099s and Form 1096
- Job cost records, contracts, and invoices
- General ledger and check register
- Federal income tax return
- Maryland quarterly unemployment reports
- Quarterly fuel tax reports
COVID-19 UPDATE:
If you have paid furloughed employees, keep separate, verifiable records. Otherwise, payroll could be assigned to the classification for work normally performed by the employee prior to any emergency orders issued due to the pandemic.
This audit checklist was provided by Chesapeake Employers’ Insurance Company, Maryland’s largest provider of workers’ compensation insurance .
