compensation Archives - Competitive Edge Insurance

Understanding Classifications for Workers’ Comp Dual Wage

in Construction, News, Workers' Compensation

What is happening with workers’ compensation insurance coverage in the construction industry today?

Well, according to Brenda Jo Robyn, founder of Competitive Edge Insurance, workers’ compensation rates are increasing in the construction industry.

Although rates vary by class, dual wage thresholds are going up—and what does this mean for employers? As dual wage thresholds increase, employers will be forced to pay their workers more to get them out of the higher-rated classes and into the lower-rated classes.

Interested in learning more? Click the video below to learn how to understand classifications for workers’ comp dual wage.

What is a Dual Wage Classification?

There are several classifications in The Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) for workers’ compensation.

These tiers classify employees within a category into two levels. Either:

An apprentice, or
A journeyman

An apprentice is essentially a beginner in the field whereas a journeyman knows their trade.

Using actuarial data for losses, the WCIRB found that journeymen, those who know their trade, have fewer injuries—so they give them credits.

The Apprentice Classification

The apprentice wage, or lower wage, pays more per hundred dollars than the journeyman for workers’ compensation because lower-wage workers have the most claims.

Why? Simply put, they have less experience. An apprentice is more likely to hit their finger with a hammer than someone a journeyman who has been in the role for 20 years, for instance.

The Journeyman Classification

Journeyman wages, or the high wage, receive credits and therefore, pay less per hundred dollars for workers’ compensation coverage.

Why Was Dual Wage Classification Created?

The dual wage system was created, in the highest risk classes of construction, in order to avoid penalizing the entire group of construction.

Workers who are experienced journeymen are charged less for workers’ compensation per every hundred dollars than workers who are newer to the industry.

In short, the dual wage is based on their wages.

Dual Wage is Increasing

The WCIRB has suggested levels over time on where the split is that delineates who’s an apprentice vs. a journeyman.

These levels have gone up over the years. In fact, most dual wage will increase by dollar $2 every two years.

There are 16 classes in the construction area which move back and forth. Some of them haven’t moved since 2018. For instance, for roofing, their split level is at $27 and has been that way since 2018.

Others move every couple of years. Carpentry, for example, was $35 in 2021. Now, in 2022, it’s increased to $39.

That’s a big jump! That’s $4 to move someone into the journeyman wage.

How Does a Business Owner Save Money on Their Workers’ Compensation Insurance?

So, how do you combat these raises? Risk mitigation. This includes:

Managing your experience modification rating (essentially the number that the WCIRB gives you to grade you for losses)
Maintaining a safe workplace
Supporting mental health awareness to reduce burnout
Emphasizing proper employee training
Developing and distributing an employee handbook and code of ethics policy
Implementing a handbook auditing procedure

Interested in learning more? Read on in our article “Insurance Trends in 2022: What to Watch For.”

Workers’ Compensation Rates are Rising: What Can You Do?

in Construction, General Business Insurance, News, Workers' Compensation

As many business owners may have noticed, workers’ compensation rates are rising. What does this mean? Why is this happening? And most importantly, what can you do as a business owner in response?

Read on to find out.

Why Workers’ Compensation?

If you’re a business owner or an individual who is planning on employing workers when starting a new business, California state law requires you to invest in workers’ compensation insurance.

Why? Employers purchase workers’ compensation insurance to cover the medical costs and lost wages for work-related injuries and illnesses of employees. In turn, workers’ compensation protects your company against employee lawsuits.

Worker’s compensation coverage can help pay for:

Immediate medical costs (i.e. emergency room expenses)
Ongoing medical costs (i.e. physical therapy)
Partial lost wages while the employee is unable to work

Lack of proper coverage can result in fines and even criminal exposure.

Workers’ Compensation Rates Are Rising

Over the past couple of years, workers’ compensation rates have been steadily increasing across the board. They’ve been rising by 7% on average; however, this figure depends on each industry.

Moreover, in July 2022, the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) submitted its September 1, 2022, pure premium rate filing to the California Department of Insurance (CDI).

The CDI regulates California workers’ compensation rates with the help of the WCIRB, who makes recommendations based on the state’s loss ratio.

In this July 2022 filing, the WCIRB proposed a set of increased premium rates. On average, these rates are 7.6% higher than those approved the year prior on September 1, 2021.

According to the WCIRB, the average of the proposed September 1, 2022, advisory pure premium rates is $1.56 per $100 of payroll.

Read on for the WCIRB filing.

Why Are Workers’ Compensation Rates Rising?

So, why have these premiums been increasing in the first place?

The bottom line is that workers’ compensation rates are rising because there are simply more workers’ comp claims being filed.

Research shows there are many reasons why claims might be increasing, including:

Medical inflation
Workforce changes
The increasing average age of the workforce
Increased indemnity costs, and
Rising wages

Moreover, as individuals have begun to return to work in person, the number of claims regarding health and safety in the workplace has increased as well. These claims typically include:

Employee concerns about exposure to COVID-19 due to unsafe working conditions, or
Situations where employees allege they were wrongfully denied a request for workplace accommodation or leave

What Can Business Owners Do?

With this rise in claims, what can you do to protect yourself as a business owner? You can prevent workers’ comp claims by:

Prioritizing risk mitigation
Maintaining a safe workplace
Supporting mental health awareness to reduce burnout
Emphasizing proper employee training
Developing and distributing an employee handbook and code of ethics policy
Implementing a handbook auditing procedure

While this list only showcases a few of many ways to avoid high workers’ compensation premiums, it’s important to remember that it’s up to all employers collectively to keep their employees safe—thus, lowering the number of claims being filed annually.

How Much Risk Does Your Business Hold?

If writing your hefty workers’ compensation check has begun to pain you, at Competitive Edge Insurance, we challenge you to ask yourself a question: “Am I, as a business owner, doing everything in my power to create the safest workplace possible?”

If the answer is no (which it typically is), get in touch with our team today to learn what else you can do.

Learn more about 2022 workers’ compensation changes by reading our article “Insurance Trends in 2022: What to Watch For.”

What Does Workers’ Comp Look Like for Remote Employees?

in General Business Insurance, News, Video, Workers' Compensation

Due to the COVID-19 pandemic, remote work is more common than ever, but how does workers’ compensation work for remote employees? How can an injury be proved when the individual is not in a corporate setting? What does workers’ comp look like for remote employees, and what does it cover?

Brenda Jo Robyn, founder of Competitive Edge, joins us on video to answer all of these questions.

Are Employers Required to Provide Workers’ Comp Coverage for Remote Employees?

Yes. Employers are required to provide workers’ comp for all employees, whether they’re in the office, out in the field, or in their homes working.

What Does Workers’ Comp Cover for Remote Employees?

“Workers’ comp covers everything the same across all policies and all carriers,” says Brenda Jo. “What’s different are the rates that are charged based on the payroll, the industry, and the number of employees per class code within that industry.”

All of these elements dictate the rates based on which carrier takes the coverage for the employer.

Interesting to note is the new class code that was created when remote work skyrocketed. In California, a new class code was created for telecommuting. With this new class code, you have to be at home working or in a remote workplace 50% of the time or more.

If you are coming into the office for work, you will still be considered an office employee; otherwise, you’ll be in the new class code at a very inexpensive rate. Regardless, all employees will still be covered.

How Can Employers Prevent Claims From Being Made?

It’s tricky. “It’s been a really difficult thing for employers to make sure that all of their employees are set up ergonomically for remote work,” says Brenda Jo.

Setting up ergonomically includes:

Ensuring cords are not in the way of tripping
Identifying where remote employees are sitting
Identifying how remote employees are sitting (as to not strain their necks, etc.)
And more

Some employers have hired ergonomic consultants who help remote employees set up their workplace correctly, in an attempt to avoid workers’ compensation claims.

How Can Remote Employees Make Workers’ Compensation Claims?

Things get tricky when it comes to a claim made at an individual’s house or a local cafe, for example.

Let’s say a remote employee is working at a Starbucks when they slip, fall, and get injured. Brenda Jo tells us it’s going to be hard to see where that claim will fall.

“There’ll be a lot more investigation depending on how severe the injury really ends up being,” says Brenda Jo. “You can make that claim [as a remote employee], valid or not. Then it’s up to the carrier to decide whether the claim is valid through their inspections, investigations, as well as doctor’s reports, etc.” In some cases, it might include an applicant attorney getting involved.

Read on to learn more about what to expect this year from workers’ compensation policy renewals.

Workers’ Compensation Policy Renewals: What to Expect

in General Business Insurance, News, Video, Workers' Compensation

January 1st sees the most number of workers’ compensation policy renewals. What does this mean, and what can we expect during the first month of 2022 as a result? Let’s talk about what to expect in terms of premium increases and risk mitigation.

Today, we’re handing over the mic to Brenda Jo Robyn, founder of Competitive Edge Insurance. Here’s what she has to say.

What Does January 1st Mean for Businesses?

January 1st is typically the day when the highest volume of workers’ compensation policies will renew.

Right now, there’s a backlog of quotes, which results in stressed underwriters and quotes coming out late.

According to Brenda Jo, the one thing you can expect is premium increases this year. “There is going to be quite a significant adjustment in several areas in which companies can expect to see,” says Brenda Jo. “Ten to up to 80% increases in their premiums based on the class code.”

Why Is This Increase Important?

People should be talking about this.

“I think for many, it’s going to come as a shock,” says Brenda Jo. “However, if they’re working with their broker, they’ll have already known about this since October and make plans accordingly.”

If your business is going to have that much of an increase, you need to decide how your pricing structure for your services or products will change in the next year to compensate.

“It’s really important to know what you’re walking into,” says Brenda Jo. “The rate increases will start on 01/01 and it’s carrier by carrier.”

What Determines Premium Increases?

There’s a base that’s put into play by The Workers’ Compensation Insurance Rating Bureau of California (WCIRB), which is our rating and statistical bureau for data. The WCIRB gives us the trends and where to go.

It’s important to note, however, that carriers can apply a lot of credits.

Elements that might bring about credits include:

Risk mitigation
Safety policies in place
Safety training
Low turnover

Some carriers can give credits from five to 40%, depending upon the class code.

For those of you who are interested in learning more about changing costs in 2022, check out this video when Brenda Jo speaks about what to expect from changing contractor costs.

Tag Archive for: compensation