Workers compensation is one of the insurance staples of the American workforce; a federally mandated insurance for every United States based company with employees, minus very few exceptions. Though crucial, it’s also a major headache for business owners to get right.
The insurance is based on a certain amount of the employer’s payroll for a certain period, which is usually a 12 month policy period. Often, a business owner will sit down at the beginning of the year and “guesstimate” what they believe the 12 month policy earnings will be, setting aside the appropriate payments throughout the year. At the end of the year, there’s an audit; if the payroll is over what the initial estimate was, there’s an immediate payment due within 30 days, which can be extremely detrimental to a business owner.
Dino Carbone is the Co-founder and Executive Vice President of Sales and Marketing for SmartPay Solutions, a Connecticut-based company. He joined us on the podcast to explain how cloud-based platforms & technology like this is transforming the workers compensation process for the better.
SmartPay is a Pay-as-You-Go solution, allowing for the calculation of the premium to be based on payroll in each pay period. The money is deducted immediately from the business owner’s account, and the pay-by-period system allows them to prepare and adjust much better, resulting in less cash flow issues. Carbone explains why this is particularly powerful for human capital management companies.
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