COVID 19 and Workers Compensation
What You Need to Know
Organizations across the country are restructuring their workforce in numerous ways. Employees are working from home, some employers continue to pay employees who are not working, employees have changed roles, furloughs have occurred and unfortunately so have lay-offs. These changes in the workforce bring changes in your workers' compensation program and your experience modification factor (EMod). It is important to stay up to date on recent rules changes and potential impacts to your experience mod.
NCCI rule changes for employees being paid, but not working
NCCI recognizes that circumstances around COVID 19 are extraordinary and warrant an expedited rule change to address the question of payroll for employees who are being paid but are not working as it relates to the basis of premium. This rule change will be distinct from “idle time” under current Basic Manual rules (Rule 2-F-1), and a corresponding statistical code 0012 will be created for reporting this payroll. This payroll will not be used in the calculation of premiums. The details of the proposed rule changes will be included in a filing that will be submitted to state regulators in all NCCI states. NCCI finalized this filing to all NCCI states this week and the states will have to approve of this individually. Please contact us to gain more clarity on this rule change and what it means.
Effects on the Experience Modification Factor
Your experience modification factor and the effects it has on your workers' compensation premium is important to understand. The 2020-2021 policy year will not be added to your mod for another year, but it is crucial to prepare for how it might change and the impact that it could have on your organization. If your payroll has fluctuated or employees are working in different or multiple roles, you should expect a change in your 2020 experience modification factor. To help you forecast potential changes, please contact us so we can model multiple scenarios for you.
What Should you be Doing?
Keep Detailed Records - If you are paying employees to not work and/or have employees whose jobs have changed as a result of the pandemic, it is critical to have records showing what was paid. If an employee has switched or performs multiple roles within the company, make sure you are maintaining separate and detailed payroll records that show the split time between jobs. If there are no records, the employee will be assigned to the higher-rated class code.
Continue to Emphasize Safety - Controlling your Experience Mod and your workers' compensation program will always ultimately come down to proactively addressing safety in the workplace. During these times, continue to be vigilant about the safety of your workforce.
As always, we will monitor any changes/updates that continue to develop. For more dialogue on this topic, please contact us directly.
Tyler Fee,
Risk Advisor
FEE INSURANCE GROUP
Source: NCCI Insights