On May 1, 2020, the New York Compensation Insurance Rating Board (“NYCIRB”) announced two adjustments for employers who are paying employees sidelined by the COVID-19 pandemic, leading to a less-expensive rate for Workers’ Compensation Insurance.
I. New Classification Code for Temporary Change In Duties (COVID-19)
A new classification code has been established for employees who have been reassigned due to New York’s stay-at-home order related to COVID-19, and meet one of the following conditions:
- are not performing any work duties (idle); or
- are performing clerical work duties at home.
For employees who meet these requirements, their associated payroll will be reassigned to classification code 8873 – Telecommuter Reassigned Employees. The loss cost rate for classification code 8873 will mirror the rate for clerical office employees. In most cases, this new classification will result in substantial savings for employers.
This change applies to new policies effective May 1, 2020, as well as to current policies as of March 16, 2020. Further, the change is applicable as of the start of New York’s stay-at-home order and for up to 30 days after its conclusion.
II. COVID-19 Claims Excluded from Experience Rating
In addition, the NYCIRB announced that workers’ compensation claims for COVID-19 diagnosis or illness after December 1, 2019 are to be excluded from the experience rating calculations for individual employers, since these claims are unlikely to be a predictor of future claim costs incurred by employers.
Takeaway for Employers
As many employers are paying employees who are not currently working, or working in a different capacity due to New York’s stay-at-home order, employers may get some relief in workers’ compensation premiums. Employers should track the payroll that is assignable to these reclassified employees to help with audits and billing.
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If you have any questions regarding this alert, please do not hesitate to contact us.
Putney, Twombly, Hall & Hirson LLP