End the Guessing Game with Easy, Accurate Workers’ Compensation Coverage

Nearly every employer in the U.S. needs workers’ compensation insurance, sometimes referred to as workers’ comp, but many don’t know what it is or what policy they actually need. Even many that do have workers’ comp insurance don’t combine workers’ comp and HR software to give them the ability to view reports. So they guess, and that can potentially cost employers thousands of dollars in overpayments.

Let’s take a moment to remove the guesswork on workers’ compensation by answering these important questions.

How much do workplace injuries cost businesses?

An average of 3.3 million U.S. workers sustain disabling injuries on the job each year, costing U.S. businesses an average of $171 billion annually due to occupational injuries and illnesses.*

How does workers’ compensation work?

Workers’ comp insurance serves two purposes. It assures that injured workers get medical care and compensation for a portion of the income they lose while they’re unable to return to work. It also may help protect employers from lawsuits by employees injured while on the job.

What are the penalties for not having workers’ compensation insurance?

Most states mandate businesses to carry workers’ comp insurance as soon as they have an employee who’s not an owner or officer of the company.

Failure to provide workers’ comp where mandated is a criminal offense, and the fines can add up to thousands of dollars for each day of non-compliance.

In addition to the fines, if an employee becomes injured, that employee would be responsible for all of the medical costs, lost wages, as well as any liability judgments awarded if the employee sues for negligence.

How is workers’ comp calculated?

Regulations and premium costs vary by state, but the rates are always calculated at a cost per $100 of an employee’s salary based on risk.

The old way to calculate workers’ comp premiums was to estimate your employee’s wages each year. Ten to 25 percent of the estimated annual premium would be typically paid up front. Then the business would schedule monthly or quarterly payments.

If the estimate was low at the end of the year, the employer would pay the difference in one lump sum.

But a better idea is to base your workers’ comp payments on actual wages to help eliminate large upfront or year-end balloon payments. One way to do it is to pair a small business workers’ compensation insurance policy from Paychex Insurance Agency with Paychex Payroll.

Our combination of workers’ comp and HR software collects your premium based on the wages for that pay period and sends it straight to your insurance carrier. As a result, your policy stays intact and your employees are covered with no upfront deposits and no payment schedules necessary.

* National Institute for Occupational Safety and Health (NIOSH)