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Examples of Current Client Challenges

  • A contractor client, due  to  jobs  being delayed, is having employees telecommuting or training. Unfortunately, this contractor will be using important PPP dollars to cover workers’ compensation premiums in their highest-rated code, unless this is addressed.
  • For another client, they will save 7% of their overall premiums by documenting job classification changes, but their outside payroll processing company has not been keeping track of the information.

We have been proactively working with clients to provide a solution to ensure an accurate audit and potentially allow for premium savings.

 

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Problem

PPP wages will be reported as W-2 income to employees under workers’ compensation and casualty audits in the next 14 months or less.

 

Response

NCCI and many insurance companies are looking for payroll documentation on these wages under a couple categories:

Payroll that does not have exposure (i.e., employees that are not at work but still being paid).

Employees that have different job duties (skilled workers that are now classified as permeant yard or clerical; tele-commuters; and food service that are now doing preventive maintenance).

 

Our Recommendation/Solution

Even though this is a fluid concern  of both our clients and prospective clients, the insurance industry is determining a reasonable approach to the PPP wage considerations. We are working with our partners to develop an Audit 20 procedure to provide the necessary documentation for clients. This allows our clients to meet the reporting requirements and a proactively approach their upcoming audits over the next 14 month to provide confidence that their audit is accurate, potentially reducing actual premiums.

Work with your PayneWest representative to evaluate your current workers’ compensation and casualty carrier’s documentation requirements. We can help develop a plan with your in-house accounting or out-sourced payroll processing provider to document classification changes, and develop an audit plan, Audit 20, to proactively communicate these changes in your organization.

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