What Is Workers’ Compensation?
The purpose of workers’ compensation (or workers’ comp) is to cover an employee’s medical costs and lost wages due to any work-related injury. Workers’ comp is required by law and governed by individual states.
The concept of compensating workers for injuries received on the job has existed in some form or another for a surprising number of years. Thousands, in fact. Payments for injury or loss of limb date back to around 2000 BC. Though the extent of protection for workers has differed in every culture throughout the last forty centuries, it’s not a new idea.
Why You Want Workers’ Comp
Companies don’t deliberately set out to endanger employees, and the majority of organizations implement safety precautions to prevent workplace injuries. But accidents still happen. The good news for businesses is that the mandatory expense of a workers’ compensation policy comes with employer protections.
Workers’ comp is considered an “exclusive remedy” because employees agree to the promise of timely payments for job-related injuries instead of filing a lawsuit. Coverage not only protects your employees, but it also limits your exposure.
When a business chooses to (illegally) not carry the insurance, injured employees can file civil lawsuits against their employers. Unless negligence is to blame, workers’ comp will keep business owners from being held personally liable and owing sizable settlements. Employers that disregard the law face stiff fines and even criminal charges.
How Pay-As-You-Go Workers’ Comp Helps Employers
When employers delve into the world of workers’ comp, they’re often left wondering why the term “comp” doesn’t instead stand for “comp”-licated. While well-intended, the complex rules governing coverage, codes, and proper classifications can flap even the unflappable. The calculations used to determine the cost of workers’ compensation coverage are based on the type of work, industry, and number of employees, and can be easily misinterpreted.
It takes dedication and focus to grow a company and consistently achieve organizational goals. Managing workers’ comp on top of everything else a company handles can be a challenge. If you’re looking for ways to streamline processes and maximize productivity, pay-as-you-go workers’ compensation may be the solution you need.
Consolidating workers’ comp payments with payroll simplifies business management. Instead of paying a separate insurance invoice, the premium is automatically deducted with each payroll.
Pay-as-you-go offers these other valuable benefits that can help you better manage coverage, avoid risk, and stay compliant.
Consolidating workers’ comp payments with payroll simplifies management for employers. Instead of paying insurance invoices separately, the premium is automatically deducted with each payroll.
Pay-As-You-Go offers these valuable benefits businesses need to better manage coverage, avoid risk, and stay compliant.
- Cash flow – Spread out your workers’ compensation payments and improve budgeting and cash flow.
- Convenience – Each pay period, you can rest easy knowing your wage data is automatically transmitted to your insurance carrier.
- No down payments – Keep money earning interest in your own account instead of paying big down payments.
- High-quality insurance carriers and coverage – Insurance coverage provided by the largest and highest-rated carriers offers the quality you need at competitive rates. You can also access expert insurance industry support whenever questions arise.
- Visibility into total costs – Comprehensive reports are supplied each pay period to show gross wages, exempt wages, and premium totals for each employee. The reports provide insight into your insurance costs and help you prepare for the future.
- Risk reduction – Pay-as-you-go lets you pay what you owe. When you pay premiums based on your company’s actual payroll figures, you won’t have end-of-year audit surprises.
Are You Eligible to Take Advantage of Pay-As-You-Go?
Pay-as-you-go workers’ compensation is available in all U.S. states except North Dakota, Ohio (with some exceptions), Washington, and Wyoming, which are considered monopolistic states with their own state-run workers’ compensation programs.
How Paycor Can Help
Workers’ comp is a required part of doing business, but it doesn’t have to be a burden. Would you hire a tailor to run your sales team? Probably not. Leveraging tools and services provided by experts designed to improve complex processes lets you focus on running your business.
Every employer needs to protect themselves, their employees, and their cash flow. Contact us to see how your business can benefit from a pay-as-you-go workers’ comp plan.