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Workers’ Compensation Audit Procedure Payroll to employees not performing duties

May 15, 2020

As the COVID-19 Pandemic continues to develop, The DeHayes Group is committed to providing you with relevant information concerning the impact of the Pandemic on your insurance program.

The National Council on Compensation Insurance has issued ruling changes to exclude the payroll of employees which are furloughed but paid from the audit of the workers compensation policy. These rule changes were effective 3.1.20 and will expire 12.31.20, unless amended prior to that date. The following is a summary of these changes:

  • Paid furloughed employees are employees who continue to receive payments during a temporary layoff or involuntary leave and are not performing any work duties for the employer due to the COVID-19 (coronavirus) pandemic. Payments (payroll) made to these furloughed employees are not included in premium or experience modification calculations.
  • Payroll assigned to these furloughed employees must be separated from payroll for working employees and assigned to the new class code 0012. Separate, accurate, and verifiable payroll records must be maintained for these furloughed employees.

Choosing to exclude the payroll of furloughed workers will have an impact on your Experience Modification calculation. The DeHayes Group can help you determine the impact on the experience modification. However, we recommend the calculation occur soon after the expiration of your current policy.

We look forward to working with you through this difficult situation.

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