Your Payroll Forecasts May Be Killing Your Workers Comp Budget

One of the main components of your Experience Modification Factor (E-Mod/X-Mod) is your company's payroll.  One of the disturbing trends that we are seeing is that the payrolls from the last year are used to forecast the payrolls for the next year.  In this recessive economy, quite a few companies are actually going to have LOWER payrolls than the year before or two years previously.  

I recommend looking at the Workers Comp payroll figures on your policy very closely.  If the payrolls for the upcoming year seem to be high, immediately point this out to your agent and insurance carrier.  Overstating payrolls is the same as giving the insurance carrier an interest-free loan on the excess payrolls.  The premium auditor will catch the overstatement of payroll at the end of the year. By then, your company could have earned interest on the overpaid premiums due to the payrolls.