The COVID-19 pandemic has caused many businesses to adjust or reduce their operations. Workers may have transitioned to working from home, having reduced hours, have been furloughed – some with or without pay, or have been laid off.
Maintain Accurate Payroll Records for Proper Workers’ Compensation Insurance Premium
In particular, make sure your records account for the following:
- Any changes in payroll, including a reduction in staff or hours.
- If you have furloughed employees with pay during the business disruption, keep separate payroll records for these employees for the time they continue to be paid and are not working for you. Furloughed payroll will have a reduced or zero rate when calculating the Workers’ Compensation premium, depending on state Workers’ Compensation rules.
- If you have furloughed workers within the state of Massachusetts, Massachusetts has the additional requirement below:
- An employer who is making payments to paid furloughed workers must provide to their workers’ compensation carrier, within the later 60 days of the approval date of this rule or 25 days after the employer begins making payments to paid furloughed workers, a list of all paid furloughed employees, which shall also include the employee’s average workers’ compensation classification, weekly wage, furloughed date, and anticipated date of return to work.
Tips for a Change in Operations
- Contact your insurance agent to see if this change in operations could impact how your Workers’ Compensation policy is priced.
- Note changes in your employees’ roles as part of your payroll reporting, as they may be assigned to a different class code. Are employees engaging in work that is materially different from their prior role?
Maintain Workers’ Compensation Coverage
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