As a business owner, you may never expect to experience payroll fraud or abuse within your company. Payroll fraud can happen in any organization though, and it can be detrimental when it does. Extreme financial loss and multiple years spent navigating the complex legal system are just a couple of things your company might have to endure.
What can you do in your business to help reduce fraud and abuse? Workers’ compensation payroll solutions can help. Let’s take a look at some common types of payroll fraud, workers’ comp payroll solutions, and how PEOs can step in to help prevent fraud.
Common Types of Payroll Fraud
Payroll fraud schemes come in many shapes and sizes, but one of the most common are overpayment schemes like timekeeping and overtime fraud. These schemes involve inaccurately tracking the hours you’ve worked or overtime hours accrued.
A ghost employee is someone who is on a company’s payroll but doesn’t actually work for the company. They may be a fake person entirely—created by a current employee who has access to the system—or they might be someone simply pretending to work for the company.
Claiming fraudulent expenses is another way employees can abuse payroll. By tacking on small amounts to legitimate expenses each time or creating false expenses altogether, this form of fraud could go unnoticed for some time.
How Workers’ Comp Payroll Solutions Address Fraud
Payroll software can be incredibly helpful in preventing payroll abuse and fraud. Background checks and onboarding for new hires can help ensure new employees are legitimate and have a clean record.
Workers’ comp payroll solutions also prevent payroll information from being readily available within your organization. Having a limited number of employees who can access payroll details makes it easier to track down the source of any issues should they arise.
Payroll software also makes it possible for employers to pull and review payroll reports at any time.
Role of PEO Services in Fraud Prevention
If you’re a business owner or HR manager with a lot on your plate, outsourcing payroll can be incredibly beneficial—particularly when it comes to fraud prevention. PEOs—or professional employer organizations—handle businesses’ administrative tasks like payroll, workers’ comp, and risk management.
Payroll processing can be tedious and stressful, so PEOs step in to alleviate that burden from already-busy business owners. When you partner with a PEO, they’ll handle onboarding for each new hire—thoroughly vetting them along the way.
PEOs utilize software that helps ensure employee data is secure and payroll is done accurately and on-time every time. Allowing a PEO to handle payroll processing for your company means fewer people within your organization will need access to your payroll information—further protecting your business from fraud.
Implementing Anti-Fraud Measures
Partnering with a PEO means employees will have an app where they can access their personal information. This offers a secure system for them to clock in and out, and it helps prevent users from creating and tracking time for ghost employees.
Limiting access to payroll information is a great way to help prevent payroll fraud and abuse. When you work with a PEO, it eliminates the need to give multiple employees access to payroll data. PEOs will process your payroll, and you or your HR manager can access those reports at any time to confirm their accuracy.
While PEOs handle payroll and other administrative tasks, employers are still in charge. Documentation and authorization will be required before a new employee is added to payroll.
Additionally, PEOs can run payroll audits at any time, and they’ll regularly check for unusual time-tracking activity.
Protect Your Business from Payroll Fraud
Payroll fraud or abuse can be detrimental to your company. Not only will your business take a massive financial hit after experiencing fraud, but it will likely also take a toll on its reputation.
Outsourcing your payroll processing is one the best ways to help protect your business from fraud or abuse. Reach out to the team of experts at OCMI Workers’ Comp today to see how they can help prevent payroll fraud within your organization.
As a payroll administrator or HR manager, you know how important payroll documentation is. Accurate payroll reporting is crucial when it comes to employee satisfaction, engagement, and retention.
Despite how essential it is to both your business and the people who work there, ensuring accuracy when reporting payroll can be difficult no matter how many employees you have. There are some best practices to keep in mind when documenting workers’ comp payroll to ensure compliance and help the process run smoothly. Let’s dive into effective payroll documentation and how to implement it in your organization.
Importance of Accurate Documentation in Workers’ Comp Payroll
Accurate payroll documentation is imperative for many reasons—from compliance with state and federal laws to employee satisfaction. If you’re in charge of paying people, it must be done correctly. There are many rules and regulations when it comes to payroll, and remaining compliant with those laws requires accurate payroll processing.
The culture of your workplace depends largely on the attitude and satisfaction of your employees. If your workers aren’t paid accurately or on time, company culture will likely suffer. As an employer, your employees should be able to trust that they’ll make the pay promised to them without having to double-check the math or ensure their hours are correct.
Additionally, proper documentation of payroll is necessary to keep track of business expenses. Payroll adds up, and it’s often the biggest expense an organization has. When payroll isn’t documented correctly, it creates discrepancies and disorganization within your business.
Key Elements of Effective Payroll Documentation
Effective payroll documentation relies on several key elements from the way an employee is classified to the benefits and tax deductions they receive. Employee classification will vary depending on whether they’re a full or part-time employee, or a contracted worker. These classifications are used to help ensure companies remain compliant with rules and regulations.
Employee benefits—like workers’ compensation insurance—and tax deductions also play a major role in effective payroll documentation.
Best Practices for Payroll Reporting
With so much to consider when it comes to payroll reporting, adhering to best practices can help simplify the process.
Classify Employees Correctly
First and foremost, correctly classifying your employees is crucial for accurate payroll reporting. This will determine the type of worker they are and ultimately the benefits and tax deductions they receive.
Create a Payroll Schedule
Whether you have one or one hundred employees, staying organized can be challenging. Creating and maintaining a payroll schedule is a great way to stay on top of payments and keep your employees satisfied.
Document and Maintain Records
Keep track of everything—from your employees’ personal information to payroll records. Staying up-to-date is crucial for remaining compliant with state and federal laws.
Automate Payroll
The easiest way to ensure efficient payroll processing is to automate your system. Professional employer organizations (PEOs) use payroll software to help ensure accuracy, timeliness, and compliance with the rules and regulations for your specific state and industry.
Preparing for Audits
For payroll administrators and HR managers, preparing for audit season can feel somewhat overwhelming. Before the government performs an official audit, however, it’s a good idea to internally check that payroll has been done accurately.
Preparation for an audit may look like reviewing all hours worked by each employee and ensuring what they were paid for matches the number of hours they logged. Paid time off, workers’ compensation, and tax deductions are also important to double-check. Keep bonuses and back pay in mind as well when checking the accuracy of your payroll.
When you work with a PEO, you won’t need to worry about payroll audits. The PEO is in charge of handling payroll processes and ensuring that it’s performed correctly.
Maintaining Accuracy and Compliance in Payroll Documentation
Accuracy and compliance in payroll documentation is essential for the success of your business. While following best practices can certainly alleviate some of the stress that comes with it, you may choose to partner with a PEO to receive even more support. Reach out to OCMI Workers’ Comp today to speak with payroll professionals about how their team can help simplify your payroll process.
For business owners and human resource managers, payroll and workers’ compensation claims can be daunting tasks. Not only are they time consuming, but there’s also plenty of room for error—which can cost time and money.
Calculating workers’ compensation payroll entails adding up the gross annual wages of all employees covered by the workers’ compensation policy. This isn’t always straightforward, however, as employee’s hours tend to vary. If you’re a payroll administrator of any kind, you likely know just how impactful it could be to automate workers’ comp payroll.
Keep reading as we dive into the benefits of automating workers’ comp payroll and how working with a PEO can help you integrate payroll automation with your existing HR systems.
Benefits and Features of Workers’ Comp Payroll Automation
If you’re a small or medium-sized business owner or HR manager, streamlining your payroll processes can be incredibly beneficial for your company. PEO payroll services can help you automate your payroll so you can focus on your strengths within the company rather than pouring over numbers and triple-checking your work.
Accurate Workers’ Comp Premium Calculations
In many cases, workers’ compensation premiums are calculated based on the previous year, which can make the process even more complex. Overpaying for coverage means that although the difference would eventually be paid back, you may be waiting a while to receive it—likely until after the audit is complete at the end of the year. Paying too little in premiums, however, could mean you owe a large lump sum when the policy ends.
Automated payroll with a PEO eliminates the guesswork by using real-time payroll data to ensure accurate workers’ comp premium calculations.
Timely Payouts to Your Employees
Paying your employees accurately and on time is critical for the success of your organization. As a business owner or payroll administrator, it may not be uncommon for you to stay up late doing payroll for your company. Manual payroll—particularly when pressed for time—can create even more opportunity for calculation errors.
When you work with a PEO to automate the process, you can guarantee your workers will receive accurate and timely paychecks. PEOs typically use payroll technology for their services to streamline the process, create a simple user experience, and ensure accuracy.
Compliance with Rules and Regulations
When it comes to workers’ compensation, rules and regulations are changing constantly. As a business owner with so much on your plate, it can be difficult to keep yourself up-to-date with laws. PEOs make it a priority to remain current with the workers’ comp regulations so that your company stays compliant, no matter where it’s located.
Steps to Integrate Payroll Automation with HR Systems
Integrating payroll automation into your existing HR systems may sound daunting, but partnering with an experienced PEO can help you simplify the process. Start with the basics like determining pay periods, creating a schedule for payroll, and configuring tax rates, deductions, overtime, and bonuses. A PEO’s HR software can be incredibly helpful when setting up these policies. HR software should also be able to synchronize your data so that it’s consistent across payroll, accounting, and tax software.
When your data and policies are in place, employees should be able to use their online platform to choose a benefits package that fits their needs. Employees should also have access to their payroll information like the number of hours they’ve worked within a pay period and how much they’ve earned so far.
Challenges and Solutions in Integration
Transitioning from one process to another can be time consuming and somewhat tedious. How seamless of a switch it is, however, will have a lot to do with your current setup for payroll. No matter how overwhelming it may feel, an excellent PEO will help you make the shift as smooth as possible. Ultimately, making the transition to automated payroll will be worth it in the long run.
Enhancing Efficiency with Payroll Automation
Automating workers’ comp payroll can help enhance efficiency when it comes to getting your employees paid accurately and on time. If you’re ready to make the shift, reach out to the experienced team at OCMI Workers’ Comp to help streamline your company’s payroll process today.
No matter the size of your business, workers’ compensation insurance is crucial for protecting both your company and your employees. If an employee gets injured on the job, knowing they’re financially supported can alleviate a massive burden. Not only will they be able to get the medical care they need, but you and your company will be covered as well.
The cost of workman’s compensation is dependent on several factors. For small businesses, however, it can be even higher than it is for larger corporations. Keep reading for 5 ways to reduce workers’ comp premiums for your small business.
1. Take preventative measures before an injury occurs
Before a work injury occurs, it’s a great idea to implement safety training programs for your employees. Small businesses are typically less likely to offer safety trainings, which can contribute to higher premium costs. Safety programs are imperative for getting the entire company on the same page when it comes to safety protocol. Simply being aware of common causes for injuries and how to prevent them can be a game-changer for workplace safety.
2. Partner with a PEO
Professional employer organizations (PEOs) help companies manage benefits, payroll, and workers’ compensation. Outsourcing to a PEO can be incredibly helpful—particularly for small businesses that may not have the manpower to handle those administrative tasks hassle-free on their own.
PEOs often offer pay-as-you-go workman’s comp programs, so you’ll never pay more for premium costs than you need to. These programs can also be tailored to exactly what your company needs—no matter how many employees you have or how long you want coverage.
3. Give your injured employees the care they deserve
While implementing safety training programs can help reduce the likelihood of workplace injury, accidents still happen. If an employee does become injured at work, be sure to give them the support they deserve. Ensure they receive the medical care they need, and remain in contact with them throughout their healing process. Making sure your employees know you’re there to support them in whatever way you can while they’re recovering is crucial.
4. Have a return-to-work program in place
Typically, the longer a workman’s comp insurance claim stays open, the more costly it becomes. Additionally, the longer an injured employee is away from work, the less likely they are to return at all—ultimately increasing your costs as an employer in the long run.
If one of your employees gets injured on the job, do what you can to ensure their timely return to work.
First and foremost, be sure they’ve received the medical care they need and that their recovery is going smoothly. If that’s the case, a return-to-work program might look like allowing them to come back to work part-time while they continue to heal. Maintaining open communication with your injured employees and actively helping them get back to work is important for boosting their morale.
5. Empower your supervisors to be great leaders
Provide your supervisors with leadership training and the education they need to create a great workplace environment. An injured employee who doesn’t enjoy their job or feel appreciated by their supervisor may take their time reaping the benefits of workers’ compensation insurance from the comfort of their home. A welcoming work environment and supportive leadership can make a massive difference in how quickly your employees want to come back to work after an injury.
A final note
Injury prevention, pay-as-you-go plans, and supporting your employees in getting back to work as soon as they’re able are great ways to help reduce workers’ compensation premiums. Keep these 5 things in mind to help minimize your workman’s comp costs for your small business.
Workers’ compensation is a crucial part of running a business—no matter the size of your company. Whether you have one employee or one hundred, workers’ compensation insurance can protect you and your business financially if someone gets injured at work. Depending on what type of business you own, however, you may feel that workers’ comp is more expensive than it’s worth. Let’s dive a little deeper into why it’s so important, and how you can integrate workers’ comp estimations into your business strategy.
Why is workers’ comp necessary for your business?
Financially speaking, workers’ compensation is the best way to protect yourself and your business if one of your employees gets injured at work. Without workers’ comp, an employee who either gets injured on the job or becomes ill as a direct result of their work can legally sue you for damages. This means you could be paying out of pocket for their medical expenses, rehabilitation costs, and any wages lost from being unable to work.
Additionally, giving your employees the peace of mind that they’re covered financially if they get hurt shows them that they’re valued as a part of your team. The safer they feel when they show up to work, the more likely they are to stay with your company even if they do get in an accident on the job. Boosting company morale is a great way to keep hard-working employees on your team.
How to integrate estimations into business strategy
Because workers’ compensation is an important part of owning a company, it’s essential to integrate workers’ comp estimations into your business strategy.
Depending on the industry you’re in, there may be certain factors holding you back from getting workers’ compensation insurance. If you’re a business owner whose employees primarily work in an office setting, you may feel that workers’ comp is unnecessary. Accidents do happen, however, and it’s crucial to be covered when they do. Plus, for office workers, your workers’ compensation rates will typically be lower than for employees who work in a riskier field.
Have safety training programs in place
Before you’re even faced with a workplace injury, consider implementing safety training programs to help mitigate the risk of accidents at work. Integrating the cost of safety trainings into your business strategy can help keep your workers’ compensation costs as low as possible.
Utilize pay-as-you-go options
For business owners who hire primarily short-term workers for specific projects or contracts, you might feel it isn’t worth it to have a traditional workers’ compensation plan. You do have other options, though. Some companies offer a pay-as-you-go approach to workers’ comp, allowing you to pay for only what you use, based off of your payroll. This means you’ll be able to calculate exactly how much you need to pay instead of guessing and potentially paying more than necessary.
Pay-as-you-go workers’ compensation also allows business owners to offer short-term compensation. If you own a construction company, for instance, and you hire workers for individual projects, you can rest assured that they’ll be covered without needing to keep that coverage for longer than necessary.
A final note
Integrating workers’ compensation estimations into your business strategy can help keep you on top of costs. Keep these ideas in mind for saving as much money as possible on workers’ compensation. The more thoroughly you can plan in advance, the more you’ll save in the long run. Don’t miss out on the benefits of having workers’ compensation for fear of spending too much—no matter what type of business or how many employees you have.
If you’re a business owner, understanding the necessity for workers’ compensation is imperative. Depending on the size of your organization, it may not be legally required. However, it might still be a good idea to protect your employees as well as your business in the event that someone gets injured at work.
Workers’ compensation insurance varies greatly from state to state. What does this mean for you as a business owner in terms of coverage and cost? Keep reading to learn more about regional differences in workers’ compensation insurance.
The importance of workers’ compensation insurance
Even with just one employee working for you, workers’ compensation insurance can play a big role in protecting you and your company financially. Not having some type of workers’ comp in place could be detrimental if an accident does occur at work.
If one of your employees gets injured on the job, without workers’ compensation, you could be held responsible for damages. This means you could be legally obligated to pay out-of-pocket for their medical care, any lost wages, and any other expenses related to the incident.
Why does it differ from state to state?
Many factors can contribute to workers’ compensation insurance differing regionally. Each state has its own specific requirements which are either determined by that state’s rating bureau or, more commonly, by the National Council on Compensation Insurance (NCCI).
Consider risky industries or businesses
The type of business you run and how much risk is involved does play a big role in the cost of workers’ compensation. Though this doesn’t always differ depending on location, companies that drill for oil, for instance, may see higher rates than a tech company whose employees typically sit at a computer for the majority of the day. The type of industry most commonly seen in certain areas can impact the average cost of workers’ comp in that region.
State regulations and how well your company follows them
State regulations can also affect workers’ compensation rates. These regulations typically come from the state itself, the Occupational Safety and Health Administration (OSHA), or the US Environmental Protection Agency (EPA).
As a business owner, it’s crucial to consider what potential safety risks or hazards your employees could face. Do you have rules set in place to help protect them from those risks? Generally speaking, if you follow the rules and regulations set into place by your state and an employee is still injured on the job, you should still be covered by workers’ comp. The better your track record of following those rules, the lower your premium costs will be.
Healthcare costs
The cost of healthcare also plays a role in workers’ compensation premiums. States that have higher healthcare costs may see higher rates for workers’ comp in order to cover those costs if an injury occurs. Some states or businesses, however, offer wellness programs to help reduce the cost of healthcare. In those instances, it may actually lower the cost of workers’ compensation premiums.
Understanding regional differences
There are many factors that can impact workers’ compensation from state to state. As a business, it’s important to dive deep into the regulations put into place by your own state to gain a firm understanding of what’s required.
If you’re looking for a way to simplify your workers’ comp insurance, consider working with a PEO or professional employer organization to help you streamline the process. They’ll help you get the coverage you need no matter where you’re located, how many employees you have, or how long you need to be covered.
No matter how careful you are at work, accidents happen every day. If you’re a business owner, having a workers’ compensation policy to protect your employees in the event of an injury is crucial. In most states, it’s legally required. Even if it isn’t a requirement where you live, it’s better to play it safe.
Filing a workers’ compensation claim can be complex. It’s important to fully understand the process in order to ensure your employees get the support they need. Keep reading for 4 best practices for handling workers’ compensation cases.
1. Always put the safety of your employees first
If one of your employees gets injured on the job, the most important thing you can do is prioritize their safety and well-being. Be sure that they get the medical care they need right away. After they’ve received any necessary medical attention, begin the workers’ compensation claim process.
Whether someone has been injured or not, it’s a great idea to regularly implement safety trainings in your office as well. Scheduling refresher courses regularly allows your employees to stay up-to-date on protocol, ultimately helping prevent accidents and injuries in the future. It’s a good idea to include both written and visual content to help all of your employees retain as much of the information as possible.
2. Report incidents right away
Be sure to report the incident to the insurance carrier right away in order to get the workers’ compensation process started as quickly as possible. The sooner you get the details and file the claim, the sooner your employee can receive the financial compensation they deserve.
3. Document the injury with as much detail as possible
When you’re documenting the injury, it’s imperative to provide as much information as possible. Interview any witnesses to the incident as soon as you can so that the details are still fresh in their minds. The employee who was injured will also need to provide detailed information about the incident—such as when and where it happened, how it happened, and if anyone else was present. Depending on the situation, it may be possible for them to complete and submit the forms on their own.
4. Stay in contact with your insurance carrier throughout the process
The claim process itself can sometimes take months, and in many cases, more information will need to be submitted as time passes. If your employee received medical care or is going through a rehabilitation process, those records will need to be sent to the insurance company. As an employer, staying in contact with the insurance carrier throughout the entire process will help keep things on the right track until the issue is resolved and the claim is either approved or denied.
Keep these 4 best practices in mind next time you’re handling a workers’ compensation case. If you’re looking for a hassle-free experience with workers’ compensation, consider small business workers’ comp insurance that offers a pay-as-you-go approach. You’ll be able to customize your workers’ comp insurance in a way that makes the most sense for your company.
No matter what size your company is, workers’ compensation—or workman’s comp—is necessary for protecting your employees as well as your business itself. While larger corporations typically have the financial means for coverage, it can be more challenging for smaller businesses to manage the cost.
If you’re a small business owner, keep reading to learn more about the basics of workman’s compensation for small businesses.
Why is workers’ compensation a necessity?
Most states legally require workers’ compensation insurance for businesses, though the exact requirements vary from state to state. Workman’s comp is crucial for protecting workers if they get injured on the job. It typically covers the cost of medical care, rehabilitation, lost wages, disability benefits, and death benefits.
Work-related injuries and illnesses are typically covered, though there can be exceptions. If intoxication or misconduct played a role in the accident, for instance, it’s unlikely that the employee would be eligible for coverage. To begin the documentation process of a workman’s comp claim, employees who are injured at work must report the accident as soon as possible. The incident and injury should be detailed as thoroughly as possible to help ensure the employee is eligible for benefits.
Not only is workman’s compensation crucial for protecting employees medically and financially, but it also helps protect the business. Having workers’ comp in place can decrease the likelihood of your company being sued in the event an employee is injured at work. It’s also possible that without workers’ compensation insurance the business owner would be required to cover the cost of medical care.
How does it look different for small businesses?
Workers’ compensation is a legal requirement for businesses in most states, regardless of how large or small the company is. Even if you have just one employee, you’re most likely required to have workman’s comp. While it can be challenging for some small businesses to bear that financial burden, there are some great options available for coverage.
Partnering with a professional employer organization (PEO) offers alternative solutions to traditional workers’ compensation. Some PEOs specifically provide workman’s comp for small businesses, offering pay-as-you-go programs. OCMI customizes their programs to meet your needs as a small business. Their workers’ compensation plans allow you to pay as you go—without the steep upfront premiums—so you only pay for what you need in terms of benefits.
Handling workers’ compensation can be complex—particularly for small businesses that may not have the manpower or resources to spend a lot of time figuring it out. Working with a PEO allows you time and freedom to focus on your work—the growth of your business and satisfaction of your employees—while a team of professionals takes care of the legalities of workers’ comp.
It’s always a good idea to compare features and pricing to ensure your company has the coverage you and your employees need. If you own a small business, consider partnering with a PEO that offers a flexible approach to workman’s compensation.
If you own a business and have employees working for you, workers’ compensation insurance is imperative. Not only is it a legal requirement in most states, but it helps protect your employees as well as your business in the event someone gets injured on the job. Accidents happen every day, and knowing that you’re covered if one of your employees gets injured at work can alleviate stress and save money while they focus on healing.
Accurately calculating the cost of your workers’ comp for each employee is crucial not only for ensuring you find the best coverage and rates, but also for protecting you in the event of an audit. Keep reading for 5 tips for ensuring accurate input for your workers’ comp calculator.
1. Double-check your payroll estimates
Calculating the cost of workers’ compensation can be complex, so double-checking every step of the process is important—starting with payroll. You’ll need to consider how many full-time employees you have versus how many part-time and seasonal workers are a part of your company. The more precisely you can determine the annual pay for each employee, the more accurate your workers’ compensation costs will be.
2. Classify your employees correctly
Unless your state has their own classification system, workers’ compensation class codes are typically established by the National Council on Compensation Insurance (NCCI). Class codes are determined based on how high risk the type of work is. Knowing who establishes class codes in your state and ensuring that you’ve classified your employees accurately is necessary for calculating your cost of workers’ compensation.
3. Be sure the premium rate for each employee is accurate
The premium rate for each employee will vary depending on how they’re classified by the state or NCCI. In general, the higher the risk involved with a particular job, the higher the insurance premium will be for that specific job. The class code associated with someone in construction, for instance, likely means a higher rate than the class code of someone who works in an office.
4. Include deductions
Take deductions into account when you’re calculating the cost of workers’ compensation for each of your employees. Additional pay such as tips, overtime, or severance shouldn’t be included in an employee’s annual pay when calculating their insurance cost. Your state will have their own rules and regulations when it comes to deductions, and each business will have their own requirements. Be sure to confirm what applies to your own unique situation before diving into the math.
A final note
If you own a business and manage employees, having workers’ compensation insurance is crucial. Calculating your workers’ compensation costs, however, can be complicated. If you’re looking for a simplified approach, consider partnering with a PEO to help make the process as seamless as possible. If you’re calculating the cost yourself, be sure to keep these 4 tips in mind for ensuring accurate input for your workers’ comp calculator.
