If you (as a Massachusetts employer) paid any of your employees or 1099 contractors for time that you were closed due to COVID-19 and they were not performing any work for you, you may be able to reduce your workers’ compensation insurance costs during 2020. First, since WC rates are a small percentage of wages, determine whether the potential reduction is worthwhile to pursue. If you would like to claim this savings, then you must contact your workers’ compensation insurance carrier before October 17, 2020 (or within 25 days of the paid furlough if after that date) to request that WC code 0012 be added to your policy, and to comply with any other requirements. Then, after your policy end date, when your audit is completed, your premium will be adjusted.
Workers are classified by their duties. In religious organizations and schools, this is generally two codes: 8868 Professional & Clerical and 9101 All Other (primarily custodial and maintenance). Premiums are a percentage of wages: in Massachusetts, for custodial and maintenance employees, 2.85% and for all other church professional and clerical staff, 0.68%. The total premium you pay is based on an estimate prior to your policy start date, and then adjusted based on actual payroll determined by an audit following the end date of the policy.
To estimate your potential COVID-19 savings, use our WC Savings Calculator. Enter each employee who received wages while furloughed, their usual WC code, and wages paid or anticipated during furlough between March 1 and December 31, 2020.
Keep in mind that to claim this savings, you must keep “separate, accurate, and verifiable entries” within the your payroll records. Further information is included on the Massachusetts WC Rating & Inspection Bureau’s webpage.