Many States Offer Temporary Work Comp Classification Reductions during the Pandemic

 

 

During the pandemic, insurance laws in many states are allowing employers to reclassify employees who normally work in higher rated workers comp classes as clerical or other lower classifications.

 

 

 

Workers compensation premiums are based mainly on the classifications that apply to a business’s workers. For example, office workers are classed with low rates; roofers with high rates.  During the pandemic, however, many workers, including those in higher risk classifications with high rates, are not engaged in those activities. 

What should a business do?  If you drop those workers from your workers compensation rolls completely, you won’t be providing any coverage. Remember in almost all states you still have an obligation to provide workers compensation benefits regardless of whether you as an employer carry workers compensation insurance. The degree of risk those employees face now may not be as great, but they can still incur injuries that require workers compensation. 

The National Council on Compensation Insurance (NCCI), which acts on behalf of the workers compensation industry in 39 of the states, has made the following update to its Basic Manual rules to address the situation:

“The temporary interruption or suspension of normal business activities caused by COVID-19 may qualify as a change in operations. For example, if an employer continues to pay its employees while they are working out of their homes (telecommuting) rather than an office, carriers may consider a change from the employer’s governing classification to Code 8810 — Clerical Office Employees NOC or Code 8871 — Clerical Telecommuter Employees, or other appropriate classifications based on the duties of the employees while normal business operations are interrupted or suspended. Once normal business operations resume, appropriate classifications should be applied.”