Workers Comp Payroll Records Hang Around For Four Years+
A company’s workers comp payroll records are vital to the premium audit process. Assessing a company’s payroll records is one of the auditor’s main job functions.
Wow!, the concern about your workers comp payroll records is over and now you can move on as that is the last you company has to worry about those records. They will affect your company no longer in the Workers Compensation insurance process.
Hold on! Not so fast – those payroll figures are with your company for four years or more. Ouch! But why, you ask.
My last article centered on a part of your Experience Mod sheets Do you have your E-Mod sheets out? Do you know where they are so that you can see my upcoming point?
Look at your Experience Mod Worksheets starting with page two. Look down the left column – do you see that NCCI stores your workers comp payroll information on each of your policies.? I would rather that you look at your own X-Mod worksheets. If you do not have it available – which is not a good development an example provided by NCCI is below. Ignore all the arrows except for #6.
Do you see the Payroll column? Hey, what is that doing here? Well, the workers comp payroll in every Classification Code(see the Code Column) establishes your company’s risk under workers compensation.
If you look at your complete Mod sheet, the policies go back four years or more. I am just showing you one year of one policy as an example.
What do we know or do about the payroll figures? If they do not look right, compare them to an annual payroll statement for that policy year. Remember that payroll (remuneration) does not cover every item in your payroll summaries.
One of the secrets of Experience Rating is that higher payrolls usually will increase your indirect discount – the interesting Wt variable. Or better yet, accurate payrolls make the Wt variable accurate.
If you decide to shop your workers comp policy around in the market. What is one of the first things that a good agent, underwriter or consultant wants to see? I ask for the Experience Mod Sheets and Loss Runs as the first documents.
Analytics and Payrolls
Now with so much credence given to analytics – your payroll figures on the Mod sheets can easily go back 20 years. NCCI, WCIRB, and the independent rating bureaus store your Mod sheets for many years. Analysts/underwriters/carriers, etc. will look back beyond four years. One of the main areas examined is the workers comp payrolls.
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