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Does Workers’ Comp Cover Business Owners?

The Growing Challenge of Multi-State Payroll

Business owners, CFOs, and HR professionals know how complex the payroll process can be. When your company hires employees that live across multiple states, however, it becomes even more challenging.

 

Varying tax regulations and location-specific wage laws make it difficult to remain compliant. The rise of remote work means these complexities are becoming even more prevalent, ultimately costing companies time and money.

 

The administrative burden of multi-state payroll can lead to costly errors—particularly for small businesses. Professional employer organizations (PEOs) step in to alleviate some of that pressure by handling administrative tasks like payroll management. This means growing companies can stay focused solely on running their business.

 

Let’s take a closer look at multi-state payroll compliance, why traditional payroll may not be the right choice for your company, and how PEOs help simplify the payroll process.

 

Understanding Payroll Compliance Across State Borders

If you’re a small business owner, hiring remote workers means having the ability to access a larger pool of talent beyond your specific area. This can be incredibly beneficial for your business, but it also comes with challenges.

 

One of the biggest challenges companies should consider when hiring talent across state borders is remaining compliant with rules and regulations regarding payroll. Not only do these laws evolve constantly, but they also tend to vary from state-to-state. If your company falls out of compliance, you could be faced with hefty fines and penalties.

 

When hiring workers across multiple states, it’s important to keep in mind that state income tax rates, unemployment insurance requirements, wage and hour laws, and benefits mandates will vary depending on where your new employees are located. Keeping up with those regulations can be especially difficult for smaller businesses or companies without a human resources team.

 

Why Traditional Payroll Systems Fall Short

Traditional payroll systems typically handle one-size-fits-all scenarios. While they may process paychecks efficiently, they may not take multi-state payroll compliance into account.

 

In many cases, generalized payroll processing can lead to miscalculated tax withholdings, late or inaccurate state filings, or noncompliance with state wage laws.

 

How PEOPayGo Makes Multi-State Payroll Easy and Accurate

From streamlining payroll and ensuring compliance to flexible pay-as-you-go programs and expert support at your fingertips, PEOPayGo makes multi-state payroll easy and accurate.

 

1. Payroll Compliance

PEOPayGo specializes in understanding and keeping up with state and federal rules and regulations when it comes to payroll. No matter where in the United States your workers are located, PEOPayGo ensures that your business will remain in compliance with those laws.

 

2. Streamlined Payroll Processes

Beyond remaining compliant with state and federal regulations, a streamlined payroll process is essential to keep employees happy and your company thriving. PEOPayGo’s platform simplifies the entire process, from onboarding new employees and time tracking to tax filings and benefits management. Automating your payroll processes with the help of PEOPayGo also ensures that it’s done accurately and on time.

 

3. Expert Support

The team of experts at PEOPayGo is always available to help with what you need—whether you’re unsure of how to handle an employee moving to another state or you’re trying to understand varying wage laws. When you partner with PEOPayGo, you’ll receive the support you need as a small or medium-sized business.

 

Simplify Payroll with PEOPayGo’s Multi-State Expertise

Managing payroll across multiple states can be complicated, and as a small business owner, you likely have a lot on your plate already. It can be difficult to keep track of varying wage laws by state, especially when rules and regulations are constantly changing.

 

When you work with PEOPayGo, you can rest assured that your business will remain compliant with state and federal regulations when it comes to payroll. Not only will you receive compliance support, but you’ll have streamlined payroll processes to help your organization simplify and thrive.

 

If you’re a business owner or HR manager with multi-state or remote employees, reach out to PEOPayGo today to get the payroll support you need.

 

Contact us today to get the coverage and support you need!

Business owners have many responsibilities, including ensuring the safety of their employees. In most states, employers are required to purchase workers’ compensation insurance (also known as workman’s compensation or workers’ comp).

However, what about you, the business owner? Do you have workers’ compensation protection? Should business owners obtain coverage? You’ll learn in this article when business owners may be exempt from workers’ compensation, as well as what they usually choose to do.

Workers' Compensation: The Ins And Outs

How does workers’ compensation work and what are its benefits? Worker’s compensation covers medical bills and protects a portion of wages when workers are injured or ill at work.

In the absence of workers’ compensation, businesses could be liable for the medical bills, lost wages, and fines an employee might incur due to an accident. A few factors influence employee benefits, including the location of the business and the terms of the employee insurance policy. Workers’ compensation benefits often include medical treatment and partial wages.

Even though workers receive workers’ compensation benefits, it is the employer’s responsibility to buy and pay for the insurance policy.

In Case of Injury Or Illness, What Should I Do?

It is the employer’s responsibility to report any workplace accident or illness. After this, it is the employer’s responsibility to file a workers’ compensation claim. For all parties – the employer, employee, insurer, and medical providers – it is best to file the claim as early as possible so that they can focus on providing the employee with the best care and benefits.

How Do You Get Your Workers' Comp Insurance Rate?

To find your workers’ comp insurance rate, you need to identify the class codes that correspond to the work your employees will be performing. A class code is a classification used by insurance companies to categorize employees according to their risk level. You can get assistance from your insurance agent. It’s just a matter of knowing what your team will be doing throughout the day, and sometimes where they will be working. Your insurance agent can also help you get multiple quotes for workers’ compensation coverage, so you can be sure to get the best price.

Workers' Comp Requirements

The requirements for workers’ compensation vary by state and industry. In any case, you should speak with your insurance agent if you have any specific questions.

According to state law, failure to maintain workers’ compensation can result in hefty fines or jail time. Whenever you hire a new employee, you must have a policy ready.

Worker’s compensation requirements may also include exceptions. These may vary from state to state.

In most cases, independent contractors and self-employed individuals carry workers’ compensation. Partnerships and limited liability companies (LLCs) may also qualify for an exemption.

Can Business Owners Be Covered By Workers' Comp?

In short, yes, it can. Your workers’ compensation policy can cover business owners and executives. In many states, owners and officers are exempt from workers’ compensation insurance, so you are not required to include them.

To start, speak to your insurance agent about this exclusion. 

While excluding leadership reduces your workers’ compensation costs, it also means that your wages would not be covered if you had an accident at work.

What Business Owners Decide When It Comes To Their Own Workers' Comp

A majority of business owners choose not to participate in their workers’ compensation policies. Why is that? Because they are saving money. When you’re added to your company’s workers’ compensation policy, you’re yet another employee that needs insurance.   

The majority of small and large business owners find it motivating to get back to work. This is because their work affects the success and revenue of their business far more than just their salary.

It is imperative to remember that your health insurance must cover your injuries, even if they occur at work. Your health insurance company may place a limit on the total amount they’ll provide, or you might have to pay a deductible, depending on your plan.

However, workers’ compensation has no limit on how much it can cover for medical care related to injuries sustained on the job. In addition, workers’ compensation provides benefits to family members of workers who lose their lives due to work-related injuries. However, many business owners fail to purchase workers’ compensation policies to save money.

Prevention Is The Key To Avoiding Accidents

Deciding whether to enroll in a workers’ compensation policy is a personal one that involves balancing costs and benefits. You can save money by preventing accidents before they happen, improving employee morale, and lowering costs of insurance by avoiding injuries before they happen. Be proactive if you don’t yet have a plan. Get in touch with a broker today.

As a Professional Employee Organization (PEO), P.E.O.PayGo can help you get workers comp, bundle payroll, and HR, and perform all the headache functions of a small business, all while saving you time and money. Let our Instaquote do all the work, we don’t need much information and it takes 2 minutes. Our software does all the work for you. 

Get Ready, Set, and Covered Now!

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