How To Save Money On Your Workers' Compensation Costs

• Shop for Insurance Coverage
  Rates offered by insurers can vary. Use your insurance broker to compare rates on an annual basis. You should begin the renewal process at least 90 days before your annual renewal date to ensure enough time to check on premium rates and/or to look for a new workers' compensation carrier.
  
  
• Manage your Workers' Compensation Program
  Begin cost control with a safe working environment. Inspect workplaces and hold managers accountable for safe conditions and practices. Consider implementing a reward system for a reduction in claims or achieving a "claim free" status. For profit companies have been doing this successfully for years! 
  
  
• Know your Workers' Compensation Rights as an Employer
  Designate a doctor for treatment of work related injuries. When an employee is injured and opens a claim, communicate with the employee – how are they doing? When are they going to return to work? When is their next doctor's appointment? Etc. Consider a return to work, modified work program – your carrier will probably help you put one in place.
  
  
• Close "Open Claims"
  When one of your employees first files a claim, the insurance carrier will estimate what they think the total cost of the claim will be. This amount will be temporarily "charged" against your account. As long as your employee is receiving treatment or benefits under workers' compensation, this account will stay "open" with the estimated amount charged against your account. Often these estimates of future costs are set high and once the claim is closed, the amount charged against your account will be lowered. This will help keep the cost of your next annual renewal lower.
  
  
• Check Your Class Codes
  For workers' compensation purposes, your employees are classified into "class codes" depending upon the type of work they perform. These class codes have corresponding rates and determine how much you pay for every $100 of payroll your employees receive.  Ask your insurance broker to review your classifications to make sure that your employees are classified correctly. Two of the lowest class codes are Clerical and Outside Sales. Executive Director and other staff who travel (even around town) will usually be classified as Outside Sales.
  
  
• Handling An Audit
  Your insurance carrier will periodically "audit" your workers' compensation account. They will be looking to make sure that you reported your payroll correctly and that your employees are correctly classified. Make sure you have an experienced employee meet with the auditor. You don't want the carrier to incorrectly move your employees into higher cost class codes.
  
  
• Payroll Exemptions for Workers' Compensation Premium Calculations
  Payroll costs that are exempt from workers' compensation charges vary by carrier. Common exemptions include payroll involving separation pay and/or salary diverted to flexible benefit accounts. Check with your carrier to determine which payroll costs are exempt for your premium calculations.
  
  
• Stay Informed On Workers' Compensation Reform and Practices
  Here is the official State of California website, which will keep you up to date on workers' compensation: http://www.dir.ca.gov/dwc/dwc_home_page.htm

This information is an overview of workers' compensation and should not be construed as legal advice. In no event will we be liable for any damages whatsoever resulting from use of this material. We recommend, because of the potential liability of workers' compensation, legal advice or other expert assistance is obtained.