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The Post-Pandemic Payroll Effect Causes Higher Premiums


Post-Pandemic Payroll Effect – Payroll Decreases + Accident Rate Stays The Same

One of the most popular questions we have received since early last year (2023) concerns the spike in Experience Mods also known as E-Mods or X-Mods. One of the most common factors that J&L has seen over the last few years is the post-pandemic payroll effect.  Yes, I coined that term this morning.

Many business owners and risk managers have contacted us since early 2023 asking how their E-Mod or X-Mod spiked in such a short period of two years or less.

pic of water droplet post-pandemic payroll effect on leaf
Wikimedia Commons License – The Lotus Effect -Elucidate

 Post-Pandemic Payroll Effect- Why?

Our first step begins with a loss run analysis looking back at least 4 years.  What we have seen is the number of accidents and reserves seems to be a constant figure.  Many businesses are building back their business operations.  The payrolls may have not been what they were pre-pandemic.

If the number of accidents is the same even though payrolls have understandably decreased, there is not enough payroll to cover the risk.  A 20% decrease in payroll will result in an increase in risk for an employer having the same number of accidents.  The post-pandemic payroll effect kicks in and the frustration also spikes along with the Mod.

The Workers Comp Experience rating system is a delayed system that takes time to show up in an employer’s experience rating.  It may take a few to many years for the X-Mod to stabilize.

How Do We Fix It ASAP?

The best method is to cover these steps:

  • Full loss run analysis for the last five years.  Why five – predictive analytics have stretched out the period that underwriters examine when writing or renewing an account.
  • Experience Rating Sheets Analysis – go back in time the same five years as the loss runs
  • Claims and Reserve Review – recommended if questions arise when doing the first two steps
  • Explore other options – Captives, PEOs, self-insurance, large deductible, safety consultants.  If you are told “This is your only option”, heavily question that statement.

If you have any general questions on the post-pandemic payroll effect, send us a note through our Contact Us page.  If you want to attempt a DIY, then feel free to use the search box to search for the four steps in the 2,000 articles on this website.



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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