What is workers' comp and who benefits?
Workers' compensation insurance provides benefits for employees who are injured on the job or who suffer an illness as a result of their workplace environment. Workers' comp insurance pays any related medical bills, rehabilitative services, and sometimes replacement wages (typically 2/3 of their salary) for workers who are unable to return to work after an injury.
In exchange for this, workers who receive these benefits forfeit their right to sue the company for damages caused by such a workplace injury; in this way, workers' comp protects both employee and employer alike. Because of this, it is in a business’ best interest to provide workers' comp coverage for its non-exempt employees.
Workers' compensation insurance is required by law to be provided by businesses in specific circumstances in the State of Wyoming (see below). Businesses who fail to provide such coverage for their employees are subject to a sometimes hefty fine; in addition, businesses are required to pay 100% of the workers' comp insurance since it is illegal to require employees to pay for any part.
Who needs workers' comp in Wyoming?
Most Wyoming employers are required to provide workers' comp insurance. Exceptions to this are domestic, federal, and farm employees.
In addition, the following employees are exempt:
Note that the following are required have workers' compensation coverage:
Purchasing workers' comp in Wyoming
The State of Wyoming administers all workers' compensation through a state fund. If you are required to purchase workers' compensation insurance for your employers, you must purchase it through the State of Wyoming's Department of Workforce Services; workers' comp is not available through private insurance companies.
All businesses are required to register with the Wyoming Department of Workforce Services before starting operations, as are all out-of-state employers who are doing business within state lines.
When you contact the Department of Workforce Services to purchase workers' comp, be prepared to provide the following information:
Your legal business name, as well as whether it is a Sole Proprietorship, LLC, etc. and any other DBA names your business operates under.
Mailing address and business phone numbers
Federal ID or Social Security number
The first date you will be hiring Wyoming workers
A complete description of the type of business it is and tasks performed.
An estimated monthly payroll
The names, addresses, birthdates, and social security numbers for all company officers and owners.
How is workers' compensation calculated?
To determine how much workers' compensation will cost, each employee is first classified as to what kind of work they perform in their daily duties. Each type of job is assigned a "class code" which in turn is assigned a premium rate that is expressed in dollars and cents per $100 of payroll.
Sometimes referred to as a "per 100 rate," these rates vary depending on how much risk is associated with each type of job. A construction worker, for example, will have a higher premium rate than an office worker since the safety risks are higher.
How to lower your workers' comp premiums
Businesses can take steps to lower their workers' comp costs:
Reduce your number of claims: The single best way to reduce your workers' comp premiums is to reduce the number of workers' comp claims your employees file since fewer and less serious claims can result in a significant reduction of your premium. To start, research your industry for the most common workplace hazards; conduct regular safety checks with these in mind, and provide workplace training for your employees to increase safety. In addition, the Wyoming Department of Workforce Services provides employers with expert advice to help your workplace achieve a safer environment called the Workers' Compensation Safety and Risk Program.
Audit your class codes and payroll annually: Even small changes in the nature or scope of the work being performed by your employees over time may result in them being reclassified under a new class code for workers' comp; this could, in turn, save you money on premiums. In addition, reviewing your actual annual payroll costs will also help reflect a more accurate workers' comp premium.
Apply for an experience MOD rate: Companies that have been in business for at least three years can apply for an Experience MOD Rate. MOD stands for Experience Modification Factor, and it works by taking the average of your company's last three years of workers' comp claims and allowing you to write coverage based on that average. This can help modify a period of higher or more serious claims your business has incurred. The average MOD rate is set at 1.0; companies who have filed fewer or less serious claims will have a MOD rate of less than 1.0 and may be eligible for premium deductions.
Apply for the Wyoming workers' comp discount program: Companies can qualify for discounts of between 3% and 10% of their workers' comp premiums, depending on their level of safety training, inspection, and compliance. Find out if your company qualifies for a discount or see what steps you need to take in order to qualify in the future.
For More Information
For more information about the Wyoming workers' compensation fund consult the Wyoming Department of Workforce Services Employer Services pages.
There, you can:
Though it may seem like just another additional cost to businesses, workers' compensation insurance is a valuable tool that helps protect both the employee and the employer should an accident occur. Taking the proper steps to fully insure your company against these unfortunate events can both help your employee regain their health and return to productivity and can protect your company's bottom line.