The New York Compensation Insurance Rating Board (NYCIRB) today announced that employers who are paying employees sidelined by the COVID-19 pandemic will pay a less-expensive rate for Workers' Compensation insurance. Big I New York had asked the NYCIRB to make this change.
Many employers have taken advantage of the federal Paycheck Protection Program, which provides them with short term loans to cover payroll for two months during stay-at-home orders. Other employers are simply paying employees even though they are prohibited from operating.
Workers' Compensation rating rules require premiums to be calculated based on the amount of the employer's payroll. While idled employees are still on the payroll, they have no exposure to being injured on the job. This results in an employer paying insurance premiums for a non-existent risk.
The NYCIRB announced that it has filed and received approval from the New York State Department of Financial Services for a new classification - code 8873, Telecommuter Reassigned Employees. According to the announcement, this classification applies:
"... to the payroll of employees who, during New York’s stay-at-home order related to the COVID-19 pandemic (and future stay-at-home orders), are reassigned to either (a) not perform any work duties (idle), or (b) perform clerical work duties at home. The loss cost rate for Classification 8873 will mirror the rate for Classification 8810 (clerical office employees). Further, this provision is applicable at the start of New York’s stay-at-home order and for up to 30 days after its conclusion."
The rule change applies to all new and renewal policies effective May 1, 2020, as well as to all in-force policies as of March 16, 2020.
Big I New York's Tim Dodge exchanged emails with the president of the NYCIRB in mid-April on this issue. The board assured us at that time that a change was forthcoming.
We suggest that you contact all clients for whom you obtain Workers' Comp insurance so they can instruct you as to how much of their payroll should be assigned to this new classification.