New client onboarding sets the tone for your entire relationship. You’ve spent a lot of time in meetings, pitching them on your services, and finalizing a deal.
Now, the real work begins.
To serve your workers comp clients, you have to get an accurate assessment of their payroll and classifications.
Gaining crystal clear insight into this information requires trust. They need to understand you are there to guide them through an intricate part of their business and ultimately save them money.
Let’s walk through some steps you can take to get a handle on your client’s payroll, prevent potential fraud, and provide them with the right workers comp solution.
After winning a client’s business, you enter the relationship-building process. Payroll is one of the most tightly controlled aspects of any company. Letting you crack open the books may take time.
If a client is hesitant to share information with you, demonstrate your skills. Show them examples of other companies you’ve helped by looking at payroll information and offering improvements.
Position yourself as an adviser. You want to make sure they have the right coverage so the business and employees are protected.
First and foremost, employees need the correct classification codes. Incorrect classification becomes a costly mistake.
Classifications are likely going to require some elbow grease. In industries like construction, it’s not uncommon for workers to perform multiple tasks, each with their own set of risks. If they work for a larger firm, crews can have dozens of employees like this. The risk can be high for your client.
You can make changes and save money on premiums for your client. If they have incorrect classifications, they’re likely paying way too much, or maybe too little, for their policy. Either way, incorrect classifications open them up to risk when it’s time to file a claim. If a brick mason has a low-risk classification, like an office worker, there’s potential for problems if they get injured.
Sit down with your client’s accounting team and ask to review payroll with them. Look for patterns in employee classifications. If all workers are under one code despite doing very different jobs, your client likely has classified them incorrectly.
If they’ve classified everyone by the same code in the past, it’s likely out of convenience. Making the correct changes can save them thousands in workers comp and potential fines and legal fees.
Your client likely employs independent contractors. Check their classification, too. If your client lists contractors as employees, the company is paying an unnecessary high workers comp premium. From the reverse perspective, when an employee is misclassified as an independent contractor, it can end up costing quite a bit in pay, benefits, and more.
Occasionally, you might encounter a situation that’s a little too complex to sort out on your own.
The National Council on Compensation Insurance will conduct onsite and over the phone inspections and reviews of your client’s classification system. As experts in compensation insurance, they ask the right questions and provide a report that recommends improvements your client can implement.
When you think of workers comp fraud, payroll is probably not the first place you look. Most assume it is a fake injury or an incident outside of work that leads to fraudulent cases. These are more common, but mistakes (intentional or not) made on the payroll lead to fines and trouble from state workers comp boards.
Payroll fraud often goes under the radar. Someone savvy can creatively re-allocate money without anyone noticing. When you begin working with a client, you must take steps to identify payroll fraud early on.
Once again, classification and record-keeping are vital. When you work with a new or growing business, it can be challenging to obtain the right information. New companies may not even know what they need to provide.
As a broker, you can help identify and prevent problems with your client’s payroll. For clients just starting their business, you can help set up the correct classifications from the beginning. But you can also go much further.
Educate your client on how insurers price workers compensation. There are savings to be had in classifying employees correctly and providing accurate payroll data so you can find the correct coverage. A company in a growth trajectory may take on employees in new roles. Provide advice on how they should classify these workers for the right coverage.
Encourage clients to conduct regular reviews (monthly or quarterly) to make sure payroll is correct. Newer companies will benefit from this practice. It establishes consistency and trains employees to identify potential problem areas or changes that they might otherwise overlook.
As a broker, you need to roll up your sleeves to understand your client’s payroll and prevent fraud. There may be uncomfortable conversations, but these are opportunities for you to be your clients’ partner.
Most clients will thank you for helping them re-assess their payroll classifications. If you spot any areas of potential fraud or malpractice, they’ll appreciate your insight and help in making things right. And most of these scenarios end with your customer saving money.
The current workers comp model is complicated.
Foresight provides your client with a digital platform for managing workers compensation efficiently. By simplifying the process and offering lower premiums to companies committed to risk management, you can help your client get the coverage they need and avoid costly mistakes.