COVID-19: Auto-Owners Insurance & Furloughed Payroll
Auto-Owners recognizes that many businesses are in a situation where they are paying their employees furloughed wages, meaning they are doing no work for the business and are not located at the businesses premises. Auto-Owners plans to give consideration to this payroll for their workers compensation, commercial general liability and/or garage liability premium audits.
Their intent is to not charge premium for furloughed payroll. That being said, they do need to document this payroll. To achieve this, accurate record keeping will be essential for for auditors to determine whether payroll is furloughed or not. Be sure those who process your payroll make the appropriate changes in their record keeping practices. The payroll will need to be kept separately, and percentages of the total will not be accepted for furloughed payroll. For garage liability, if hours are shown in the payroll records so that furloughed payroll could be calculated, those hours will not be included in the full time equivalent (FTEE) total that is collected.
Additionally, for employees that are working in an alternate capacity (i.e. modified job duties), their payroll for that time period will be classified based on the governing classification on the policy and will not be reclassified to a temporary class code. This work is considered temporary and does not warrant an alternate classification. This position may be subject to an adjustment depending on the duration of the COVID-19 crisis and/or if the business experiences a complete change in operations.
This method of handling could be subject to change in the event that a state or bureau mandates a different directive. The effective date of this change is 3/01/2020
Contact With Questions
If you have any questions regarding your audit, feel free to reach out to any of our commercial lines agents!
For more information on preparing for your audit, visit HERE!
Content provided by Auto-Owners Insurance