Plastics Industry executives that pay attention to cost will pay attention their workers compensation premiums

Plastic Industry Executives that are mindful of cost will closely monitor their workers compensation premiums.  The cost savings can be significant for those that pay attention.

Workers Compensation premium are set according to your company's Employee Classification Codes.  The insurance underwrites use these codes to assign risk to the various jobs.

For example:

Employee Classification Code 4452 is applied to to the machining of plastic products developed from raw materials in the form of sheets, rods and tubes. It includes machining, bending buffing and polishing. This code also applies to vacuum forming of products where the plastic is heated and pulled into molds that form the product Heated plastic can also be applied to molds and the product would fall under this category.

Employee Classification code 4459 Applies to the manufacturing of plastic sheets,rods and tubes using the extrusion process. This involves the grinding and mixing of ingredients that produce pellets, granules or liquid dispersions that are processed into sheets, rods and tubes that are run through dies on machines under pressure to shape and produce the product.

There are also several other codes that your state may use in such as 4484, 4475, and 4476. Code 4484 is used in some state for compression and injection molding so you would have to check on your states special classes.

Why Employee Classification Codes matter?

If you have your employees in the wrong code your premium may be higher then it should.  The table below illustrates the difference.

                                  4452                            4459
Connecticut              $10.22                         $ 5.65
Idaho                        $  4.71                         $ 3.59
Illinois                      $  7.87                         $ 7.81

Per $100 of payroll

If you have operations in Connecticut your difference is substantial.   You can see from the above table that the difference in Illinois is marginal.   Depending on your state and your code the premiums you pay will vary.

What should you do?  First, you should take a look at your payroll runs to see how employees are classified.  Use the definitional codes provided by your State's Worker Compensation Bureau.  The NCCI coordinates it for twenty-three states so you may start there.

Alternatively, you can hire a professional that specializes in Workers Compensation Audits.  The most reputable firms do not charge an upfront fee.  Typically they will go back three years and do it for fifty-percent of the savings.  Your portion of the savings are furnished to you directly and you enjoy the benefit of lower costs for the next several years.

This article was written by Greg Walker at SMP Consulting Group.  SMP's specializes in workers comp audits (www.smpconsultinggroup.com).  Gwalker@smpconsultinggroup.com