An Important Update Regarding Worker’s Compensation Policies

An Important Update Regarding Worker’s Compensation Policies

At SAVA Insurance Group, we have been monitoring all of the company changes and wanted to bring an important update regarding payroll audits to your attention. The new ruling below by NCCI is for furloughed employees only who are not doing a job but are being paid. If you have an employee working from home OR who is performing a different job classification than normal, please reach out to our office so we can give you the correct guidance.

RE: National Council on Compensation Insurance Announces New Payroll Class
As a result of COVID-19, many businesses have been forced to furlough employees. In some cases, businesses are continuing to pay furloughed employees despite the fact that they are not performing any work duties.  The rating bureau for Workers Compensation Insurance, NCCI, has filed a rule change to report payroll differently.
If your insurance carrier has implemented this ruling, payments for paid furloughed employees will be excluded from premium calculations at the time of audit.
If your carrier is implementing this ruling, in order to take advantage of this benefit, follow the steps below:
• It is imperative you keep separate, accurate and verifiable records
• Track the amount of payroll for paid furloughed employees separately
• Report payroll for paid furloughed employees under classification 0012
VERY IMPORTANT: If paid furlough employee payroll is not tracked and reported separately, the payroll will be assigned to the classification code for the work normally performed by the employee.
To see if your carrier is applying this ruling or if you have any questions, please contact us for further review.  We value your business and as your insurance agent and one of your trusted advisors, we are here to help.

Click here to see the NCCI Item Filing Announcement

Best Regards,
Diana Buscetto
VP. Commercial Lines Business Development Manager
860-437-7282 ext. 121
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