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Workers’ Compensation Audit’s and COVID-19

Thursday, April 2, 2020

By: Patrick Johnson, CRIS, PWCA / Construction Practice Leader / The Horton Group

Since COVID-19, there has been a serious concern among clients about how workers’ compensation payroll and premium audits will be affected. The National Council of Compensation Insurance (NCCI), the governing body for worker’s compensation in most states, has not issued any changes to how insurance companies are to audit payroll. Therefore, we have been receiving many questions concerning how the secure at home, and other stay at home orders, will impact workers’ compensation audits.  Questions like,

“If I shut down my operations but continue to pay my employees, how will this impact my work comp premium audit; will the payroll be included in my premium?”

Due to the fact that the NCCI has not yet informed any insurance companies how to audit payroll, the amount paid to employees will be included under the employees normally assigned payroll classification. Right now, the NCCI is treating this payroll as they would treat normal vacation and sick pay. Virtually every state uses NCCI’s remuneration (payroll) rules including, IL, IN, MI, MN, and WI.

Because this situation is changing almost daily, we are advising our clients to keep track of any changes in operations that affect employee’s work status, duties, and pay. If NCCI, or other regulatory bodies, change their positions, you will then be able to account for the change quickly. While there is no guarantee that NCCI or carriers will adjust payroll inclusions or class codes, having accurate accounting may prove worthwhile at the time of your audit.

For your reference, here is a link to a list of the included and excluded remuneration from NCCI.  

Here is a link to NCCI’s FAQ concerning remuneration and class codes as they related to COVID-19.

Here is a link to the states that NCCI administers the WC systems.

Please reach out to your Horton Construction Practice team member or me with any questions. Also, please take advantage of our website as it has a lot of useful information and tools. Horton COVID-19 Resource Center – Click for Updates, Webinars, and FAQ.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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