The premium rate for a business’s workers’ compensation insurance starts with a base count of employees. A business must make a correct classification of itself according to definitions determined by the National Council of Compensation Insurance (NCCI) or the respective State Rating Bureau. If classified incorrectly, its rating may cause over or under rating the employer’s risk.
Employees are further classified by the type of work they do in their respective workplace. For example, a driver is classified according to his/her job functions, but that classification is also categorized by the risk of the industry sector. A driver employed by an armored car service is at different risk than a driver for a retail store.
Getting these classifications right and keeping them current is vital to managing your business workers’ compensation insurance premium rate.
HRIS Reliability
An HRIS program brings credibility and accuracy to your payroll audits. But, it is only as infallible as your input and updates. Make sure to accurately update the following:
- Complete a correct and current list of employees on staff.
- Identify employees as regular, probationary, temporary, full-time, part-time, and exempt or non-exempt.
- Locate or prepare job analyses and descriptions for all work positions.
- Identify the minimum number of hours required of workers to be considered full-time.
- Determine how accurately your business has classified employees as exempt.
- Confirm that independent contractors are clearly assigned.
Your HRIS software will be an enormous help in sorting, storing, and reporting the data auditors want to see.
Schedule HRIS Audits
Still, HRIS can only process that data provided. It is not enough to have confidence in your installation data because there will always be changes: turnover, transfers, reassignments, and promotions. Your HRIS program’s value is a function of the regular reviews you schedule and maintain. It is prudent to review the following:
- Enter employee changes accurately and consistently with HRIS implementation directions.
- Train employees involved with HRIS interface in the need for accuracy and audits.
- Plan a quarterly desk audit of HRIS performance. (A desk audit can be a simple review of paperwork and a comparison to the software reports.)
- Review your HRIS job classification reports together with your workers’ compensation insurance broker well before soliciting your insurance premium rate.
A good HRIS program can give you a false confidence in its outputs. There is a risk that you will think the quality is self-perpetuating. However, getting your workers’ comp rate right from the start and keeping it right is your job. Don’t allow there to be any costly oversight.