Reduce Workers’ Comp Fees: Compulsory Workplace Notices & WPS Charges

Did your company receive a notice from the New York Compensation Rating Board titled “Compulsory Workplace Safety and Loss Prevention Program”? Or did the State Insurance Fund or another insurance company add a “WPS” charge to your annual premium? If so, read on.

What the rule requires

NYS Department of Labor “Regulation 59, Workplace Safety and Loss Prevention Program” states that any New York employer with annual payroll over $800,000 and a published experience modification factor of 1.20 (a 20% charge) or higher must, within 30 days of notification by the NYS Workers’ Compensation Rating Board, undergo a workplace safety and loss prevention consultation.

The consultant will charge a fee of about $3,000, inspect your entire operation, make safety recommendations, re-inspect once you comply, and submit a compliance certificate to the NYS Labor Department for an additional fee.

The cost of not complying

Failure to comply brings a mandatory 5% premium surcharge, known as the “WPS charge.” Continued failure adds another 5% each year. For example, an employer with a $100,000 annual premium would be surcharged $5,000 in the first year, $10,000 in the second, and $25,000 by the fifth. The penalty is never removed until you comply.

The better way out

The best way to avoid the time, cost and penalty is to find out whether your company was overcharged on past claims, or whether an employee reported fraudulent claims. If so, your experience modification can be reduced below 1.20 and you are no longer required to comply. You will also be eligible for a premium refund if your experience modification is reduced.