Covid and Your Premium Audit
Aug 10, 2020
Covid and Your Premium Audit
At the time of a workers’ compensation premium audit, it’s important that businesses fully understand the distinction between excluded and reclassified payroll. Here are some guidelines, and our premium auditors can answer any questions.
During the pandemic, some companies paid their employees while they were at home and not doing any work. Insurers in MA and NCCI states are now being allowed to place payroll for these employees to 0012 which excludes the payroll from premium calculation.
The code can only be used on payroll from 3/1/20 to 12/31/20 under the following circumstances:
- The payroll records clearly reflect the period during 3/1/20 to 12/31/20 that the employee was furloughed.
- “Furloughed” means not working, including no clerical, visiting jobsites or phone work.
- An employee who works part of the day and is considered “furloughed” the remainder of the day will have their entire payroll for the day entered into either clerical or telecommuter, depending on the state.
- This is not a change in job duties; it means not working.
- The funds used to pay the employee can be from the insured or a government entity.
- Funds from a government entity used to retain or hire working employees cannot be classed to 0012.
The key to coding employees to 0012 is that these employees were not working at all and payroll records clearly indicate when this occurred.
Covid also forced some companies to adjust how they ran their business and required that employees work from home due to quarantine. From 3/1/20 to 12/31/20 insurers are being allowed to split the class code for one period. An employee who was working from home due to the pandemic can be reclassified to either clerical or telecommuter under the following circumstances:
- CT, ME, NH, VT: If they were working from home, they will be coded 8871 - Telecommuters as long as there is no class code on the policy which includes “and clerical.”
- MA: If they're working from home, they will be coded to 8810 – Clerical as long as there is no class code on the policy which includes “and clerical.”
- If any class code on the policy includes “and clerical,” the employee will be assigned to that class code.
- Payroll records must show when the employee’s duties changed from the normal job at the workplace to working from home in a clerical capacity. They must also show when the employee returned to workplace to resume his/her normal duties.
- If payroll records don’t indicate the change in job duties, the employee will remain in the class code to which they would normally would have been assigned.
WORKERS’ COMPENSATION RATING & INSPECTION BUREAU OF MASSACHUSETTS
For details on the WCRIB response in Massachusetts, visit https://www.wcribma.org/mass/
If you have any questions, please call 781-221-1600 and ask for the audit department or email us at email@example.com