What is Pay as you Go Workers Comp

New York Worker’s Compensation

New York State Worker’s Compensation is expensive, with the construction industry being one of the major industries leading the way.

As you may know, business insurance policies get audited on an annual basis, with one of those policies being your worker’s comp insurance.

The perfect solution for any business owner with employees is to be set up with a pay as you go worker’s compensation program.

Pay As You Go Worker’s Comp

So, what is a pay as you go workers’ comp program?

It’s a program that allows you to pay your insurance premiums as you submit your payroll. Whether it’s on a weekly, biweekly or monthly basis, depending on how you currently pay your employees and the options available in your specific WC program.

The insurance company will charge only the premium that’s associated with that amount of payroll that was run.

If you didn’t know workers’ compensation in New York is rated based on the amount of payroll that you have in each specific class code or category or job description that your employee is doing.

Having a pay as you go workers’ comp program is extremely helpful for industries that have higher rates for specific classes like the construction industry.

Now, pay as you go workers’ comp is not available in every situation. Not every insurance carrier has this option and not every class of business is eligible.

Alternative Solutions

If your insurance carrier, your payroll carrier, or some combination of these two does not off you a solution, there may be alternative options available.

Some of the pay as you go programs use to require payroll to be submitted by payroll companies only who have specific software.

Insurance carriers have changed guidelines that allow all payroll companies to do it and also you as the business owner to self submit.

What will happen is the payroll company and the insurance companies work together to submit your payroll information in which the insurance company will then debit your bank account on the weekly or biweekly basis to take out the insurance premiums necessary. Very similar to how maybe your taxes are taken out from your payroll company.

If you have to self submit the data, it will work the same way. You log in and report your payroll, in which your insurance premium will be calculated and debited from your account.

This is a great way to keep your monthly costs lower especially if you are a seasonal business or have fluctuations in “busy” times. It is much easier to pay high worker’s compensation costs during the time you have more business and more payroll.


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Another Benefit

Another great benefit to this is this limits surprised audit premiums. Any business owner knows that an audit is a necessary evil, especially for your insurance. Nothing is worse than having a huge audited premium because your estimated payroll was much lower than your actual payroll. As long as you submit and enter the correct data throughout the year, this eliminates that.

If you have, need or want to learn more about pay as you go workers’ comp programs or if you want to see if your business is eligible to get into a pay as you go workers’ comp program, to help ease the pain of those high monthly or annual costs, please hit the button below to schedule a review with one of our insurance professionals.



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