Workers’ compensation policies are a staple in any business’ insurance program. These policies are mandated by law in an effort to protect the workforce against work-related injuries. Workers compensation policies have become increasingly complicated to manage and control. A good workers compensation insurance program must balance such items as eMods, classifications, rates, claim forms, risk mitigation policies, OSHA, employer’s liability, audits, and many more.
The state of Nevada adds one more facet to a business’ insurance program that is very important to know and utilize. Using this statute can potentially save your company insurance premium and better position your company to be more competitive in your marketplace if you are not making use of it.
The state of Nevada’s Register of Administrative Regulations has adopted NAC 616A.200 which states “for the purpose of computing premiums for workers compensation to be paid by an employer who is not a self-insured employer or a member of an association of self-insured public or private employers, the first $36,000 paid by each employer to any one employee during a policy year …” The regulation goes on to define payroll as: salary, commission, piecework, incentive pay, vacation pay, sick pay, holiday pay, wages, bonuses, overtime pay, termination pay, tips, and more.
The application of this regulation means that your company needs to report only the first $36,000 of “payroll” (see definition above) for each individual employee in your company to the workers compensation carrier. Your workers compensation carrier should only be charging your company for premium on no more than $36,000 on payroll for each individual employee. If an employee makes less than the $36,000 cap, then their true payroll should be reported.
Many business owners and executives are unaware of this regulation and thereby are paying more premium to their workers compensation carriers than they should be. Often, the workers compensation carriers, auditors, and many insurance brokers fail to comprehensively explain or just completely omit this information. Complying with this state regulation can decrease your current insurance premium if you are not currently reporting your payroll with this regulation in mind.
The state of Nevada is the only state to employ such a cap on payroll reporting for workers compensation carriers.
If you have not been made aware of this regulation by your current broker or carrier, please contact me and I would be happy to schedule a free consultation and review your current insurance program for you. Please contact me at (702) 947-4079 or at email@example.com.