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.”

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.

How does Workers’ Compensation Insurance Work?

in General Business Insurance, High-Risk Insurance, News, Workers' Compensation

Picture this scenario: You’re at a construction site and a worker falls off the roof and falls and breaks their leg onto floor tiles, also breaking the tiles. What would be covered in that situation, the leg or the tiles?

What is Workers’ Compensation Insurance?

Workers’ compensation insurance are policies that provide medical benefits and wage compensation to workers injured on the job, in exchange for eliminating their right to file a lawsuit against their employer’s negligence.

Workers’ compensation benefits are designed to help employees if they are unable to work, cover medical expenses, as well as other expenses and rehabilitation costs associated with disability or illness. As you look to explore workers’ compensation options, it’s important to look for one that provides adequate coverage and compensation for your employees.

When you invest in a properly designed policy, it ensures you and your employees remain financially secure. It’s also important to look at the specific benefits that are offered within your policy. Typical workers’ compensation insurance policies cover medical benefits.

So, the worker’s comp covers the worker’s injury for falling off the roof.

What is Covered with Workers’ Compensation Insurance?

Specific workers’ compensation laws vary depending on your state; however, the most common compensation states that require workplace injury insurance include the following:

Payment for lost wages
Vocational rehabilitation
Permanent disability
Temporary disability
Medical costs and treatment

Bonds

One helpful way to understand this scenario is knowing the difference between performance and payment bonds.

Payment Bonds

In simple terms, a payment bond enforces that everything must be paid once a project is completed. Payment bonds are also surety bonds and are required for most state projects based on the Miller Act.

The Miller Act was passed by the U.S. General Services Administration Public Buildings Service (GSA) with the intention to explain how payment bonds protect subcontractors and suppliers.

The GSA responds to any reports of nonpayment, following the legal action needed and protected by the Miller Act. The GSA states that “the Miller Act requires that prime contractors for the construction, alteration, or repair of Federal buildings furnish a payment bond for contracts in excess of $100,000.”

Payment bonds additionally play a major role in construction. As an insurance company, we have relationships with carriers who understand the specifics of construction risk and can provide better solutions, better prices, and more comprehensive coverage—even for hard-to-place and high-risk companies.

Performance Bonds

The main differentiator between payment and performance bonds is that a performance bond ensures the employer is satisfied with the job. While both are surety bonds, performance bonds can be helpful in industries apart from construction.

A performance bond, according to Investopedia, “ensures the completion of a project. Setting these two together provides the proper incentives for laborers to provide a quality finish for the client.”

Any type of bonding will cover e tiles or building materials that were broken.

Overview

If an employee falls off the roof and hurts their leg and breaks the tile, the Workers comp covers the worker’s injury for falling off the roof. Bonding covers the broken tiles from his attempt not to fall off the roof.

The first step is to show us under the hood so we can help you find the right carrier and coverage to protect your business today and always.

Read about Worker’s Compensation for Independent Contractors here.

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