A work-related injury can occur with any employment. Even the safest job has risks. Workers’ Compensation insurance is beneficial for both the employer as well as the employee. It protects the business from legal action and ensures the employee’s medical expenses are paid in addition to a portion of their wages. This type of insurance only protects an employee when their injury is work-related. It will not cover any personal injury not associated with their work.
How Much Does It Pay?
How much you receive from Workers’ Compensation insurance will depend on your average daily wage. You need to determine their daily wage to calculate how much compensation a worker will receive. Take the amount they earned the prior year and divide it by the number of days worked. The next step is to multiply that amount by the number of work days they would be scheduled to work. Divide that total by the number of weeks in a year (52), and you will have the employee’s weekly average wage.
Average Weekly/Daily Wage
Several factors come into play when determining an employee’s weekly and daily wage. The type of work they do and your state’s maximum weekly rate will also affect how much an employee will receive. In most cases, if an employee is disabled, they will receive approximately 2/3 of their weekly average wage. This equals about 60%. The time you can draw Workers’ Compensation benefits will also vary from state to state.
Partial or Full Disability
It’s essential to understand the difference between partial and full disability. A partial disability means that the employee can still return to work after the doctor medically releases them. They may also be able to return to work if there is a job they are capable of doing while they are injured. Full disability, on the other hand, means an employee can’t work during their recovery and may be unable to return to work after healing. This can eventually turn into a permanent disability.
Calculating Workers’ Compensation
To calculate their Workers’ Compensation premiums, a business must know how many employees they have on their payroll and what Worker’s Classification Code each one falls under. Classification codes are ranked in increments of $100. A company’s history of Workers’ Compensation claims will also factor into the equation. All this information will be factored together to determine the premium that must be paid.
Workers’ Compensation insurance is a requirement in most states across the country. As a business owner, it is up to you to protect your employees. When you have questions about figuring out your workers’ comp insurance, contact the agents of Hoffman Brown Company. Our agents can help you gather all the information needed to calculate your Workers’ Compensation premiums.
Secure Your Business and Employees Today with Us!
Workers’ Compensation insurance is mandatory in most states, and as a business owner, it’s your responsibility to protect your employees. For assistance in calculating Workers’ Compensation premiums, contact us to get in touch with our experts at Hoffman Brown Company. Our agents will provide you with all the necessary information and guidance even on call, you can call us at (818) 986-8200.
Discover how Hoffman Brown Company can assist you with your Workers’ Compensation insurance. Protect your business and employees by reaching out to our agents today!