Class Action

 

A business can save thousands of dollars in worker's compensation costs by making sure that the insurance company classifies employees in the lowest-risk jobs possible. The lower the job's risk, the less you pay in worker's compensation premiums.

For example, Stan Levinson, president of Sullivan County Glass Co., a metal subcontracting firm in Monticello, N.Y., learned that he could legitimately classify several of his employees who installed glass in cars in a category covering auto glass installers, instead of in the higher-risk category of "glaziers." Previously the insurance auditor had included all Levinson's glass workers in the "glazier" classification.

"There are hundreds of job classifications most employers don't even know exist," says Levinson. "Chances are their insurance auditor won't bother to tell them -- or even know himself."

Levinson now tells the auditor what classifications his employees fall into. He also makes sure that he pays worker's comp rates based on employees' regular hourly wages. Sometimes an auditor will review a company's books and base the rate on an employee's total compensation. That may include overtime for which you're not required to pay worker's compensation.

Levinson advises employers to discuss available classifications with other companies in their industry and with a good insurance broker. You can also ask to see the insurance manual, published by the National Council on Compensation Insurance, which lists all the job classifications.