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Workers Comp Budget Killed By Incorrect Payroll Forecasts


Payroll Forecasts vs. Workers Comp Budget

Your payroll forecasts can affect your Workers Comp budget. One of the main components of your Experience Modification Factor (E-Mod/X-Mod) is your company’s payroll.

Picture of Workers Comp Budget Computerize Word On Hand

One of the disturbing trends that we are seeing is that the payrolls from the last year are used to forecast the payrolls for the next year.  In this recessive economy, quite a few companies are going to have LOWER payrolls than the year before or two years previously.

I recommend looking at the Workers Comp payroll figures on your policy very closely.  If the payrolls for the upcoming year seem to be high, immediately point this out to your agent and insurance carrier.  Overstating payrolls is the same as giving the insurance carrier an interest-free loan on the excess payrolls.

The premium auditor will catch the overstatement of payroll at the end of the year. By then, your company could have earned interest on the overpaid premiums due to the payrolls or invested that part of your budget into another area to increase profitability.

If you need any assistance with how to prepare a forecasted budget, we will be happy to assist you with the payroll forecasts.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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