Legal Question in Workers Comp in California
Why are worker's compensation premiums charged on paid time off? And why are employers who want to pay better wages penalized by having to pay higher WC premiums? Do employees that make more money have more accidents? I want to pay my employees well, offer some paid time off, etc but the WC insurance premiums at over 30% is literally putting me out of business. No business = no jobs. Is there any way to get premiums based fairly on just hours worked? Or any way to offer paid time off benefit to my employees that are exempt from WC premiums?
2 Answers from Attorneys
Because workers compensation premiums are based upon pay, wages, and paid time off is considered a wage. Perhaps you should consider a different pay structure for time off, for example non-employee compensation (filing 1099), profit sharing, or something similar, or consider a different workers compensation carrier.
As you may, or may not know, a workers' comp claim can cause an increase in premiums. While your question does not directly ask how to reduce workers' comp claims, my I suggest that you check with your carrier about courses on how to prevent, or reduce claims. Many carriers offer this information.
Good luck!
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