North Carolina Revises Workers’ Comp Premium Rules Related to COVID-19

May 20, 2020

Two new rule revisions to the North Carolina Basic Manual for Workers Compensation and Employers Liability (NC Basic Manual) related to the COVID-19 pandemic have been approved by the North Carolina Department of Insurance.

The North Carolina Rate Bureau (NCRB) announced the rule changes May 7 to address businesses that have suspended operations due to COVID-19 but continue to pay employees either not working or who are working from home in a different capacity.

The rule revisions allow payments/payroll to furloughed employees to be excluded from premium calculations; and allow employers to reclassify eligible employees working from home to a lower-rated classification.

NCRB adopted the B1441 filing from the National Council on Compensation Insurance (NCCI) allowing payments/payroll to furloughed employees to be excluded from premium calculations and adds information about reporting payments and zero rate/premium if applicable for payments/payroll made to furloughed employees. This change is applicable to all policies in effect on or after March 1, 2020 until December 31, 2020.

The rule states separate, accurate and verifiable records must be maintained for furloughed employees.

NCRB told told Insurance Journal in April that it was waiting to see the National Council on Compensation Insurance’s (NCCI) rule change for businesses, saying it would likely file NCCI’s language for use in North Carolina to maintain consistency across states.

In addition to the changes addressed by the NCCI’s filing, NCRB implemented a North Carolina state-specific rule to allow employees, whose duties were previously assigned to a higher-rated governing classification, to be reassigned to Classification Code 8871 – Clerical Telecommuter Employees.

This reclassification is intended for employees now working in a stay-at-home environment and performing duties consistent with clerical operations, when the higher-rated governing classification does not include clerical operations. This rule is applicable to policies in effect on or after March 30, 2020 – the day the North Carolina stay-at-home order was issued – until 45 days after the order is lifted to allow employers flexibility to implement their own return-to-work-plan.

NCRB said if separate, accurate and verifiable records are not maintained, payroll is assigned to the classification for work normally performed by the employee prior to any emergency orders, laws, or regulations issued due to the COVID-19 pandemic.

For either furloughed temporarily reassigned employees, payroll records must “clearly reflect the division of payroll between pre and post North Carolina stay-at-home order,” NCRB said.

Source: North Carolina Rate Bureau

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