Premium & Payroll
Your workers’ compensation premium is based on the amount of remuneration paid to workers during the 12-month policy period. Remuneration means money or substitutes for money. North Dakota law prohibits employers from deducting wages or otherwise billing workers for any part of the premium.
- Extra pay for overtime
- Reportable tips
- Pay for holidays, vacations, or sick leave
- Cafeteria plans, 401K’s, annuity plans, Davis-Bacon wages, etc.
- Value of meals, lodging (rent value of a house or apartment), or other gratuities received by a worker as part of pay
Liability for Payment of Workers’ Compensation Premium:
As a general rule, when a business organizes formally as a corporation, an LLC, or some similar entity, one of the major benefits it receives is the protection of the owner's personal assets against business losses.
North Dakota workers’ compensation law, however, permits North Dakota Workforce Safety & Insurance (WSI) to pursue individuals personally for the debts of their business. North Dakota Century Code (N.D.C.C.) § 65-04-26.1 assesses personal liability against officers and directors of a corporation, managers and governors of a limited liability company, partners in a limited liability partnership, and employees who own 20% of the business and have control over the reporting of payroll to WSI. Once liability is assessed and the employer’s appeal time has expired, WSI may pursue the debt through a civil lawsuit.
The employees of an independent contractor or subcontractor are deemed employees of the general contractor pursuant to N.D.C.C. § 65-01-02(16)(c). As a consequence, the statute authorizes the assessment of unpaid premium against the general contractor for the unpaid workers’ compensation premium debt of his subcontractors or independent contractors.
Premium Calculation and Payroll Reports:
Your annual payroll reports are used by WSI to calculate the premium you pay for workers’ compensation insurance. Upon reviewing the payroll report, premium is calculated by applying the rate for a class of employment to the amount of taxable payroll in that classification. If you have several classifications, your premium is the sum total of all classifications. The maximum taxable payroll for each worker is capped at 70% of the state’s average annual wage. This amount is commonly referred to as the “wage cap.” The average annual wage cap becomes effective on July 1 of each year.
As per N.D.C.C. § 65-08-01 (5), An employer who opens an account with WSI is obligated to report all wages earned in North Dakota to WSI.
Determining Classifications and Rates:
Some classes of employment are inherently more hazardous than others, and our rate class system reflects that risk. Based on the risk, each class of employment is assigned a classification. In turn, each classification is assigned a rate. These rates reflect factors such as occupational risk, medical costs, and benefit levels.
Resources for Premium/Payroll:
WSI requires employers to supply payroll information on an annual basis. When a new account is established, estimated payroll is requested for 12 months and employers are billed premiums based on that estimate.
After the 12 months have lapsed, employers are mailed an Employer Payroll Report requesting actual wages for the 12-month payroll period. The completed report is due 30 days after your account’s renewal.
If you fail to submit your payroll report by the due date, you will be penalized $50. Continued failure to report payroll may lead to an additional penalty and an “uninsured” status.
If you estimated more payroll than your actual wages, your billing statement will reflect the appropriate credit, just as an understated estimate will generate additional premium. We use your submitted actual payroll figures to bill an estimated premium for the next 12-month payroll cycle. If you anticipate a significant increase or decrease in payroll from the submitted amounts, please note this change on your payroll report or contact Policyholder Services so an appropriate billing can be generated.
You may choose to complete your payroll report by hand and mail or fax it to us or complete your payroll report through our online Payroll Reporting system. The online process is efficient, confidential, and paper free. On the 16th day of the month of your account’s renewal, your account information is available online. Your online access code is printed on the payroll report. You may also contact Policyholder Services to receive your code.
In addition to gathering annual payroll information, the payroll report reflects coverage in place for owners, spouses, and/or family members. Refer to the Elective Coverage section for more details.
Contact Customer Service at 701-328-3800 or 800-777-5033 if any of the following changes occur to your operation:
- General nature of operation
- The type(s) of work being done
- Trade name
- Incorporation of business or change in corporate officer status
- Subsidiaries or new locations
- Mailing address
- You cease having workers or are closing your business
- Any of your workers will be working outside North Dakota
- Change of ownership
- Obtain or cease services of a professional employer organization (PEO)
Premium Payment Options:
You may either pay your premium in a single payment by the due date or in monthly installments. If you choose to make installment payments, interest is charged on the outstanding balance. The interest rate equals the base rate posted by the Bank of North Dakota plus 2.5%.
Installment payments are limited to prepaid premiums only.
Premiums in default are assessed penalty interest at 2% per month, 24% annually.