Unanticipated workers' compensation insurance increases can be costly to your bottom line. While some aspects of work comp are out of your control, there are steps that your business can take to save money and lower workers' compensation insurance costs.
Analyze Estimated Annual Payroll Totals Carefully
Your premiums are closely tied to your estimated annual payroll costs. Looking closely at your estimated annual payroll costs will help you find ways to lower workers' compensation insurance. You should do your best when estimating, but you are not expected to have exact figures, either. Overestimating your payroll can result in over payment of your workers' compensation insurance and there is no guarantee that you will get this money back. Underestimating your payroll figures can result in owing a large sum in overpaid premiums!
Examine Detailed Employee Payroll Reports Regularly
Always use correct workers' comp job codes for employees. Job codes can vary greatly, and you could be paying too much or too little in if your employees are not coded correctly. For example, an employee who performs roofing and trim carpentry work will cost you more if you code him only as a roofer - the rate is much higher. You can lower workers' comp insurance costs by coding his carpentry time correctly. For audit purposes, keep accurate records. Never over report at lower rates, this is considered fraud.
Outsource Your Payroll To Qualified Specialists
Sometimes, the simplest solution is to outsource your payroll tasks. Skilled payroll processing companies are trained and educated to calculate your work comp premiums accurately. A payroll company will not just calculate your state's workers' compensation amounts- many are set up to automatically withdraw the funds due to pay the work comp premiums and will actually write and send the check on your behalf.
Seek An Employee Leasing Service To Lower Workers Compensation Insurance and Simplify Employer Responsibilities
A PEO company can make your role as an employer even easier. You can relax and spend more time focusing on your business and the actual management of your employees. Employee leasing companies can take over the responsibility and burdens of worrying about high work comp costs and in many instances, they can drastically lower workers' compensation insurance premiums.