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

With this upheaval, it is essential to maintain accurate payroll records to ensure you are charged the appropriate premium for your Workers’ Compensation coverage. Workers’ Compensation policies are audited at the end of each policy term, and premiums will be adjusted based on your employee payroll and type of work performed over the year.

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

Many businesses cannot run their typical operations because of their states’ response to COVID-19, and instead of closing, they may adapt their operations to maintain a flow of income. Other businesses have changed their operations to help respond to the pandemic by providing essential products. For example, many distillers have adjusted their operations to distill spirits and manufacture hand sanitizer to help with the shortage. If your business has had a material change in operations during COVID-19:
  • 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

If you’ve made the difficult decision to lay off all employees during this time, it is essential to maintain Workers’ Compensation coverage so you are protected when your business resumes operations. Maintaining accurate payroll records will ensure your premiums reflect your reduced business operations and staff during this period. More importantly, if you cancel your policy, you may find purchasing a new one difficult or more costly when you resume operations as insurance carriers evaluate new customers on several factors, including whether the business has had continuous prior coverage.

Read Other Blog Posts

Drowsy

Preventing Drowsy Driving

Every year, the National Sleep Foundation organizes Drowsy Driving Prevention Week to raise awareness about the dangers of driving while fatigued.
Flooding

Why Flood Insurance is Essential: Lessons from Hurricanes Helene and Milton

The devastating impacts of Hurricanes Helene and Milton have shown that flood risk isn’t limited to coastal areas. These storms have highlighted a crucial gap that individuals and businesses need to be aware of: flood damage is generally not included in typical home, condo, renters, or commercial property insurance, making a separate flood insurance policy essential for true protection.
Deer

Defensive Driving to Avoid Deer Collisions

With deer mating season in full swing from October through December, drivers face an increased risk of collisions. As deer are more active, especially around dawn and dusk, habitat loss has pushed them closer to roadways. Here’s how defensive driving can help you avoid an accident.
Massahusetts DIA Seal

MA Dept of Industrial Accidents New Notice Requirements

The Department of Industrial Accidents (DIA) has revised the Notice to Employees and has established new notice requirements. On or before September 16, 2024, all employers must utilize and repost the revised Notice to Employees poster.
Spam Phishing Scam

Recognize Spam and Phishing Emails

As more of our daily lives move into cyberspace, hackers, cybercriminals and spam bots may lurk behind every new message that shows up in your inbox. Even robust spam filters may not be able to catch every unwelcome email. Fortunately, you can act as an additional line of defense for yourself and your electronic devices by understanding the warning signs of spam and phishing emails.
Distracted Driving

How Distracted Driving and Texting Impact Your Auto Insurance Premiums

One major reason for auto insurance premiums going up is the rise in distracted driving, especially texting while driving. Distracted driving has become a leading cause of accidents, pushing up costs for insurance companies and, ultimately, leading to higher premiums for all drivers.
Hacker

Cyber Risk Exposure Scorecard: Assess your risk

Cyber incidents have become increasingly prevalent, impacting organizations of all sizes and industries. As these incidents continue to rise in both cost and frequency, organizations must take steps to address their cyber exposures and bolster their digital security defenses.
Shipping dock

Exposing Double Brokering: Safeguarding Your Freight Against Deceptive Schemes

In the landscape of global commerce, the logistics industry serves as the backbone ensuring that goods reach their destinations efficiently. Yet, amidst the complexities of this intricate network lies a threat known as double brokering, a freight fraud scheme that can leave companies vulnerable to financial loss and operational disruption.
Fireman

The Crucial Role of Disaster Recovery Plans and Insurance Solutions in Protecting Your Business

When preparing for disasters, the significance of comprehensive disaster recovery plans and understanding insurance solutions cannot be overstated. These two pillars serve as crucial safeguards, offering businesses resilience against unforeseen challenges and ensuring continuity in the face of adversity.

Visit Our Business Insurance Page

Business Insurance

Murphy Insurance stands as your steadfast partner in safeguarding your business from unforeseen challenges in today’s dynamic business landscape. In an era where comprehensive business insurance is not just a prudent choice but a vital one for ensuring the long-term stability and security of your enterprise, we are here to offer our expertise. Running a business inherently entails various risks that can potentially impact your financial stability and reputation. Learn more about our comprehensive business insurance solutions, which are meticulously designed to protect you from these potential threats, granting you peace of mind necessary to focus on the growth and prosperity of your business.