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Wrong workers' comp class codes can raise premiums for staffing agencies
Premiums are calculated separately for each payroll classification under NCCI rules, so misclassifications are often corrected only at the annual audit, changing the final premium.
Workers' compensation premiums for staffing agencies at renewal are driven by three variables, class codes applied to payroll, the experience modification factor, and which carriers are willing to write the account, Insurance Business reports.
Under the National Council on Compensation Insurance rating structure, workers' comp premium is calculated per $100 of payroll within each classification code, with different rate categories applying within a single policy, so payroll booked to the wrong code is priced at the wrong rate until the annual audit corrects it, resulting in either a premium charge or a return.
Insurance Business also notes staffing workers' comp is treated as a specialist line because carriers may not fully understand how warehouse and light industrial work flows through temporary placement agencies, and those differences can matter for classification accuracy and pricing.