Potential Reduced Work Comp Rate for Paid ‘Stay-At-Home’ Employees

By: Tony Hopkins, CPCU, CRM, CIC, Vice President / Risk Advisory Solutions

NEW Workers Compensation Guidance from WCRB (Wisconsin) and NCCI (National)

As a result of the Paycheck Protection Program (PPP) and the difficulty in retaining the best talent, many companies are attempting to find ways to keep employees on payroll, without having them work in their regular positions or work at all.  The Workers’ Compensation regulatory bodies have come out with new guidance on how to treat employees that are getting paid but aren’t working in their same capacity. It recognizes that the premium previously paid wouldn’t accurately reflect the decreased/non-existent exposure created under this environment.

Please note that if a production employee is still doing their normal job, their payroll would still fall under their normal work comp rate.  This guidance is designed for employees who are being sent home but still being paid. The biggest impact will come from those not in clerical or sales roles, as the rates with those positions are much lower than other safety-sensitive positions (e.g., manufacturing, drivers, warehousing, construction, etc.).

Also, note that the application of the guidance may be inconsistent with each carrier.  Our recommendation is to proactively gain a commitment from your carrier in writing as to how they intend to apply these rules.

This can all be very confusing.  Know that we are here for you to work through these items, announcements, and details to bring you the most important information to assist you in navigating it all. If you have any further questions, please contact your Horton team member via their direct dial number, their email address, or to be directed to your team member call us at 800-383-8283.

Key Recommendations:

• Call Horton
• Communicate your work-related adjustments (“change in operations”) for COVID-19 with us, so that we can begin discussing with your carrier to obtain their commitment to an approach in writing
• Keep good records

Wisconsin Workers’ Compensation Relief for Paid Furloughed Workers 

The Wisconsin Workers’ Compensation Rating Bureau (WCRB), the governing body of Wisconsin Work Comp, announced a new work comp class code (0012) for this unprecedented pandemic. 

This new code means a $0.00 rate for employees who are still being paid while being given a temporary layoff, involuntary leave, or another modification of normal working hours for a specified duration. 

To receive the proper credit, we suggest keeping good records to document the impact during your Workers’ Compensation audit.  

Aside from waiting until audit for your premium to be adjusted lower, many employers are looking into mid-term policy endorsements, lowering their payroll due to the changes mentioned in this guidance, and/or to account for significant decreases in payroll.  To discuss mid-term adjustments on Work Comp, General Liability, or any other policies that are tied to payroll or sales, which may be affected, please contact your insurance representative. In addition to payment grace periods that many carriers are offering, this may provide immediate premium relief. 

NCCI Guidance for Employers Affected by COVID-19

NCCI has now adopted the policy of all using class code 0012 with a $0.00 rate for employees paid, but not working, to be consistent with the guidelines laid out by the state of Wisconsin.

See Question 3 in NCCI’s published guidance, found here.