Tips from the intersection of workers' comp and business.

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The cost of your Colorado workers' comp insurance premium relies heavily on your employees and their job roles.

In fact, your payroll and your employee job classifications (insurance-speak for what they do every day) are the biggest factors that determine your premium.

So it goes without saying that any changes to your employee or payroll situations can have an impact on your policy down the road.

The question is, are you paying attention to these?

Hopefully, the answer is yes.

But if you aren't, don't worry, it's not too late. In fact, right now as the year begins is the perfect time to set aside a few hours and go over this information to ensure you're prepared. Doing so now will save you time and money over the course of the year.

Payroll changes

For many small businesses, payroll is likely one of those set it and forget it type of things. As long as you haven't had any changes at all throughout the year, you're right. But, in many instances, that's not always the case.

Here are a few things to watch out for when it comes to changes in payroll:

Change in hours for current employees

Have any of your employees changed their hours? Maybe someone had a baby and spent a few months working part-time. Or, perhaps the summer saw a huge increase in sales, so your staff had to work overtime here and there.

These changes, even though they might not seem like a big deal, impact your workers' comp premium. So, you want to note these changes as they happen for each individual employee throughout the year to ensure your payments are as accurate as possible.

New hires or reduced staff

The same goes for new hires, as well as any employees that left or were let go. Note both the dates of employment and the hours worked for these employees so you have them handy when needed.

Contract hires

Don't forget about independent contractor and subcontractor hires as well. In Colorado, workers' comp requirements state that you must cover independent and subcontractors who are working for your company. Not only that, but you must have proof of insurance too.

Classification codes

For the purpose of workers' compensation, employee job descriptions tie in with particular classifications depending on the sort of work they do. These classification codes are another big factor when it comes to calculating your premiums.

And if you think misclassifying an employee isn't that big of a deal, think again, you could actually get hit with fines or end up paying more during your year-end audit or annual review.

Classification changes

Just as with changes to employee payroll, you also need to note the classifications of any new employees. The same goes for any changes in employee job descriptions too; if you have a new job role or an employee switches to a different role in a new classification make sure you keep track of the changes.

Split classifications

When it comes to classifications, another thing to keep in mind is an employee can have more than one role. You'll need to keep track of those employees who have jobs that fall under multiple classification codes.

For example, you might have an employee who is temporarily covering for another while you search for a replacement, that new job assignment, even if it only lasts for a few weeks might fall under a different classification code.

Paying attention now goes a long way

It might feel like a lot to track, but in reality, taking a few extra minutes to note changes when they happen can save you a lot of time. After all, think how much time it would take to try to jog your memory of all these changes months down the road.

One last thing to remember. At Cake, we're here to help. If you have questions about Colorado workers' comp insurance and what's covered, we've got the answers.

If you need to sign up for workers' compensation insurance, get in touch today. We can provide you with a quote in as little as five minutes. We also have automatic policy check-ins throughout the year that keep your premium on track for the year in a matter of minutes.