Low-Rate Payroll Reduction – How Will It Affect Workers Comp System?
With Low-Rate payroll reductions causing someone who can access large amounts of data to post an article on the subject, this would be something to pay attention to for at least 2026 and beyond.
An old Workers Comp friend of mine, Mark Walls, CMO for Safety National, and Work Comp Analysis Admin on LinkedIn posted a comment earlier today
“Lots of payroll leaving the workers comp system. Most of it is low-rate payroll….but still disappearing. If Amazon is able to automate 75% of its operations, that is a lot of jobs eliminated.”
I responded –
“I wonder how this will affect Workers’ Comp rates, X-Mods, etc. White-collar entry-level jobs may not be the only payroll with reductions. I have seen reductions in blue-collar also. Recession vs AI?”
By the way, if you have not subscribed to and follow the Work Comp Analysis group on LinkedIn, you are severely missing out. Mark recommended this article on how AI may be reducing entry-level college graduate jobs.
Low-Rate Payroll Reduction – Effect on X-Mods and Loss Costs
The low-rate payroll reduction numbers need to work their way into the system. Many articles appeared on this website discussing how payroll and loss numbers figure into the Experience Mod system, and the Workers Comp system as a whole.
One concept that I latched onto many years ago was provided by an NCCI presenter at one of their conferences – the X-Mod/E-Mod system has numerous counterbalances installed to make sure that no one development, such as a Class Code change, will cause a sharp effect in the results – a moderation effect.
Bottom Line
My advice would be to wait 18 months for the initial low-rate payroll reduction data to show up in the system. Attempting to assess the unassessable would be an exercise in frustration.
