Workers’ compensation and payroll processing can be somewhat complex—no matter how many employees you have. Workers’ comp payroll systems, however, can help HR managers and payroll administrators streamline the process.
When it comes to utilizing payroll systems, ensuring employee data privacy is crucial. How can you be sure your employees’ information is protected? Let’s dive into potential threats to payroll data, best practices for keeping data secure, and how PEOs can help.
Risks and Threats to Payroll Data
Everyone at your organization will have likely shared their Social Security number, home address, as well as bank details for direct deposit. If your company uses software for conducting payroll and workers’ compensation, there are certain risks to be aware of.
One possible risk is an external data breach—when someone from outside your organization gains access to sensitive information through malicious software, hacking, or phishing attacks. This can be incredibly dangerous for everyone at your company who has shared personal information under the assumption it was secure. In addition to affecting your workforce, data breaches can have a negative impact on your company financially and in terms of credibility.
Best Practices for Ensuring Data Security
Payroll software is constantly improving, with new features and functions available all the time. As payroll systems evolve, it’s important to keep your system up to date so you have the latest version available. Skipping updates could make your software vulnerable to outside threats.
Properly educating and training your employees in cybersecurity is crucial in helping ensure data protection. Phishing attacks often come through company email, so it’s essential that your employees know how to defend themselves against cyber threats. Schedule training sessions with your team regularly so everyone feels confident in knowing what to watch out for when it comes to potential cyber attacks.
Creating a secure onboarding and offboarding process is also incredibly important for protecting data. First and foremost, vetting each new hire before giving them access to any form of sensitive information is crucial for the safety of your company. As employees leave, be sure to deactivate or close their accounts so they no longer have access to company data.
Role of PEO Services in Securing Payroll Data
Professional employer organizations (PEOs) handle the administrative tasks of a business—from onboarding and offboarding to payroll and workers’ compensation. Partnering with a PEO can alleviate much of the burden placed on HR managers and payroll administrators.
PEOs typically have their own app for both employers and employees to access payroll and workers’ compensation, making the process simple and streamlined. Data privacy laws help ensure that a PEO’s data is secure. It’s also a good idea, however, to ask how they secure their data—such as data encryption and the ability to securely send and receive documents.
Implementing Robust Cybersecurity Measures
Working with a PEO means there will be safeguards in place to ensure that your data is secure. PEOs offer password management to help users generate and securely store strong passwords for their portal. Multi-factor authentication is also essential to data protection—requiring users to provide two or more pieces of information before accessing their account.
Antivirus software scans files and emails looking for potential malicious activity, making it another necessity for protecting your employees’ data.
Additionally, cybersecurity training should be a requirement for all employees so that they have a clear understanding of what to look for when it comes to possible phishing attacks.
Future Trends in Payroll Data Security
Protecting your privacy online has never been so imperative. As technology continues to advance, so does payroll data security. Going forward, AI will likely be utilized even more than it already is—identifying patterns and signs of potential threats—to quickly catch intended attacks. There will likely also be more emphasis on authentication and authorization for users within an organization, rather than focusing primarily on external threats.
Secure Your Payroll Data with OCMI Workers’ Comp
Protecting employee payroll data is essential for maintaining trust and compliance. With OCMI Workers’ Comp, you get advanced workers’ comp payroll solutions designed to safeguard sensitive information and enhance security.
Don’t take risks with your payroll—partner with a trusted PEO for expert protection.
Don’t wait—get a quote now to safeguard your business here.
In the world of insurance and risk management, you might come across two important terms: Certificate of Insurance (COI) and Waiver of Subrogation (WOS). While both are essential, they serve different purposes. Let’s break down what each one is, why they matter, and when to use them.
What is a Certificate of Insurance (COI)?
A Certificate of Insurance (COI) is a document from an insurance company that proves you have insurance coverage. It gives a summary of your insurance policy without going into all the details. Third parties, like clients, landlords, or contractors, often ask for a COI to make sure you have the right insurance.
Key Parts of a COI:
Policyholder Information: Name and address of the insured.
Insurance Company Information: Name and contact details of the insurer.
Policy Numbers: Unique IDs for the insurance policies.
Types of Coverage: What the insurance covers (e.g., general liability, workers’ compensation).
Policy Limits: The maximum amount the insurer will pay for each type of coverage.
Effective and Expiration Dates: When the coverage starts and ends.
Description of Operations: What activities or operations are covered by the insurance.
Purpose and Use of a COI:
Proof of Coverage: Shows that you have the required insurance.
Contractual Compliance: Ensures you meet the insurance requirements of a contract.
Risk Management: Helps third parties check that you have enough insurance to cover potential risks.
What is a Waiver of Subrogation (WOS)?
A Waiver of Subrogation (WOS) is a clause in an insurance policy where the insurer gives up the right to seek repayment from a third party responsible for a loss. This means if the insurer pays for a claim, they won’t try to get the money back from the party that caused the damage.
Key Aspects of a WOS:
- Relinquishment of Recovery Rights: The insurer waives their right to seek recovery from the responsible party.
- Policy Amendment: A WOS is added as an endorsement or amendment to an existing policy.
- Specific to Relationships: Often used in contracts to protect ongoing business relationships from legal disputes.
Purpose and Use of a WOS:
Facilitates Business Relationships: Prevents insurers from suing each other, helping maintain good relationships.
Contractual Requirements: Many contracts, especially in construction and leasing, require a WOS to avoid litigation.
Risk Management: Reduces the risk of legal disputes and associated costs.
Key Differences Between a Certificate of Insurance (COI) and a Waiver of SUbrogation (WOS)
Function and Purpose:
COI: Provides proof of insurance coverage and details the policy.
WOS: Waives the insurer’s right to seek recovery from a third party, protecting business relationships.
Document Type:
COI: A standalone document summarizing insurance coverage.
WOS: An endorsement or clause within an insurance policy.
Use Cases:
COI: Used to show proof of insurance to clients, contractors, landlords, or other third parties.
WOS: Included in contracts to prevent insurers from pursuing subrogation claims against third parties.
Content:
COI: Detailed information about the types of coverage, policy limits, and effective dates.
WOS: A specific clause that waives subrogation rights, often not detailed in a COI.
When to Use Each
Certificate of Insurance (COI):
– Needed when entering contracts that specify insurance coverage requirements.
– Required to demonstrate compliance with insurance mandates in business relationships.
– Commonly requested by landlords, clients, or contractors.
Waiver of Subrogation (WOS):
– Included in contracts to maintain strong business relationships.
– Used in industries like construction, where subrogation claims could disrupt collaboration.
– Required by contractual agreements to avoid potential legal disputes.
CONCLUSION
Both a Certificate of Insurance (COI) and a Waiver of Subrogation (WOS) are vital in insurance and risk management, but they serve different purposes.
A COI provides proof of insurance coverage, while a WOS protects business relationships by waiving the insurer’s right to seek recovery from third parties.
Knowing the differences between these two can help you navigate your insurance needs effectively and ensure you have the right protections in place.
In the world of insurance, you might come across the term “Waiver of Subrogation.” It sounds complex, but it’s actually quite important for businesses, contractors, and anyone with insurance. Let’s break down what a waiver of subrogation is, why it matters, and when you might need it.
What is a Waiver of Subrogation?
A waiver of subrogation is a clause in an insurance policy. Normally, if an insurance company pays out a claim, they have the right to try to get that money back from the person who caused the damage. This is called subrogation.
With a waiver of subrogation, the insurance company gives up this right. So, if someone else caused the loss, the insurance company won’t try to get the money back from them.
Why is a Waiver of Subrogation Needed?
Facilitating Business Relationships: In many business situations, like in construction or leasing, waivers of subrogation are common. They help keep good working relationships by stopping insurance companies from suing each other, which can cause disputes and bad feelings.
Contractual Requirements: Many business contracts include a waiver of subrogation clause. This is especially true in industries like construction and real estate. This clause ensures that if something goes wrong, the insurance companies involved won’t fight each other, making operations smoother and more cooperative.
Risk Management: Waivers of subrogation help manage risk by avoiding long and costly legal battles between insurance companies. This helps businesses stay focused on their work without getting dragged into disputes over insurance claims.
Cost Efficiency: Legal fights over subrogation can be expensive and time-consuming. By including a waiver of subrogation, businesses can save on these costs and resolve issues more quickly and easily.
How Does a Waiver of Subrogation Work?
When a waiver of subrogation is part of an insurance policy, the insured party agrees not to hold a third party responsible for damages that might normally be recoverable. Here’s an example:
Imagine a contractor damages a building by accident. The building owner’s insurance company pays for the repairs. Without a waiver of subrogation, the insurance company might try to get the repair costs back from the contractor. But with a waiver of subrogation, the insurance company won’t go after the contractor, even though the contractor caused the damage.
When Should You Consider a Waiver of Subrogation?
Entering Contracts: Review your contracts carefully. If a contract requires a waiver of subrogation, make sure your insurance policy includes this clause to avoid breaches.
Collaborative Projects: In projects with multiple parties, like joint ventures or construction projects, waivers of subrogation help keep good relationships and streamline operations.
Lease Agreements: Landlords and tenants often use waivers of subrogation to prevent their insurers from suing each other if something goes wrong. This is especially useful in commercial real estate.
Vendor Relationships: When working with vendors or subcontractors, including a waiver of subrogation can prevent disputes and foster better working relationships.
Conclusion
A waiver of subrogation is a valuable tool in insurance and risk management.
By stopping insurers from pursuing reimbursement from third parties, it helps maintain good business relationships, ensures compliance with contracts, and avoids costly legal battles. Whether you’re a business owner, contractor, landlord, or tenant, understanding and using waivers of subrogation can offer significant benefits and peace of mind in your professional dealings.
Insurance plays a crucial role in safeguarding business operations, ensuring both employees and assets are adequately protected. For business owners, understanding key documents like the Workers’ Compensation Insurance Certificate, the Certificate of Insurance for Workers Compensation, and related certifications is vital. While these certificates may appear similar at first glance, they each serve unique purposes. This article delves into their distinctions and provides insights into reviewing a workers’ comp certificate, particularly in the context of PEOPayGo’s Employee Leasing program.
Workers' Compensation Proof of Insurance Certificate
Purpose:
A Workers’ Comp Certificate of Insurance verifies that an employer has secured workers’ compensation insurance, which is mandatory in most states. This insurance provides critical coverage for employees who experience work-related injuries or illnesses. Benefits include medical care, rehabilitation services, and wage replacement, ensuring workers receive necessary support. For employers, this certificate not only demonstrates compliance but also protects against potential lawsuits stemming from workplace injuries.
By understanding how to read and use these certificates, businesses can ensure they meet legal requirements and foster a safer, more secure workplace environment.
Contents:
– A Workers’ Compensation Proof of Insurance Certificate typically includes:
– The name and address of the insured (employer).
– The policy number.
– The effective and expiration dates of the policy.
– The insurance carrier’s name and contact information.
– A statement confirming the coverage for workers’ compensation.
Employers often need to present this certificate to state regulatory agencies, contractors, or clients to demonstrate compliance with workers’ compensation laws. It serves as proof that they have the necessary coverage to protect their employees.
Certificate of Insurance (COI)
Purpose:
A Certificate of Insurance is a broader document that verifies the existence of various types of insurance coverage, such as general liability, property, automobile, and professional liability insurance. It provides a summary of the key details of an insurance policy but does not confer any rights to the certificate holder.
Contents:
A COI typically includes:
- – The name and address of the insured (policyholder).
- – The policy numbers.
- – The types of insurance coverage and their limits.
- – The effective and expiration dates of each policy.
- – The insurance carrier’s name and contact information.
- – A description of the insured operations or locations.
- – The name of the certificate holder.
Use Case:
Businesses often provide a COI to clients, landlords, or vendors to prove they have the necessary insurance coverage required for a contract or lease agreement. It reassures the certificate holder that the policyholder has sufficient coverage to handle potential risks associated with their operations.
Key Differences
Scope of Coverage:
- The Workers’ Compensation Proof of Insurance Certificate is specific to workers’ compensation insurance.
- A Certificate of Insurance can encompass various types of insurance coverage.
Purpose and Use:
- The Workers’ Compensation Proof of Insurance Certificate demonstrates compliance with state workers’ compensation requirements.
- A Certificate of Insurance provides evidence of insurance coverage to third parties for contractual or legal purposes.
Contents:
- The Workers’ Compensation Proof of Insurance Certificate focuses solely on workers’ compensation policy details.
- A Certificate of Insurance includes a broader range of insurance information, such as general liability, property, and automobile coverage.
Issuing Requirements:
- Workers’ Compensation Proof of Insurance Certificates are often required by state laws and regulations.
- Certificates of Insurance are generally requested by other businesses or entities as part of contractual agreements.
Reading Your Workers' Compensation Certificate with Cornerstone
For businesses enrolled in Cornerstone’s Employee Leasing program, understanding your workers’ compensation certificate is crucial. Here are some specific pointers to help you navigate the document:
- Where can I find my company name?
- Your company’s name and effective coverage date are referenced in the Description of Operations Box at the bottom of the certificate.
- Why is my company name not in the insured box?
- Cornerstone is listed as the employer of record for tax and insurance purposes.
- Why is Cornerstone the employer of record?
- Your program is an “Employee Leasing” program (Per Florida Statute 468.520(4)), which is an arrangement whereby a leasing company assigns its employees back to the client and is covered under Cornerstone’s insurance policy.
- Who is covered under this workers’ compensation certificate?
- As stated in the Description of Operations Box, coverage is only provided for leased employees, not subcontractors, independent contractors, or any other person not enrolled in the Cornerstone program policy.
Conclusion
Both the Workers’ Compensation Proof of Insurance Certificate and the Certificate of Insurance are crucial documents in the business world, each serving distinct but equally important purposes.
Understanding the differences between them ensures that your business remains compliant with legal requirements and meets the expectations of clients, partners, and regulatory bodies.
For businesses utilizing Cornerstone’s Employee Leasing program, knowing how to read your workers’ compensation certificate ensures clarity on coverage and compliance.
By maintaining accurate and up-to-date insurance documentation, you can safeguard your business and provide peace of mind to all stakeholders involved.
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.
