The Hanover Insurance Group

Workers' compensation assignment of payroll to class code 0012

Effective immediately for all new and renewal policies as well as to all in-force policies as of March 1, 2020.

Applies in: AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MO, MS, MT, NE, NH, NM, NV, OK, RI, SC, SD, TN, UT, VA, VT, WV

Additional states: NJ, MA, WI, MI, MN, NC, CA (eff. 3/19/20)

Many states have approved the use of class code 0012 on workers’ compensation polices due to the country-wide COVID-19 pandemic. This class code is designated for paid furloughed employees and specifically for payments (payroll) to these paid furloughed employees. Paid furloughed employees means employees who continue to receive payroll during a temporary layoff or an involuntary leave and are not performing any work duties for an employer.

Payments to paid furloughed employees means payments made by an employer or any public governmental entity to paid furloughed employees as a result of federal, state, and/or local emergency orders, laws or regulations, issued due to the COVID-19 (coronavirus) pandemic which impact an employer’s staffing or business operations. Such payments do not include any appropriated funds or loans received by an employer as authorized by any law or regulation, or public governmental entity, that are used by an employer specifically to retain or hire working employees.

Payments to paid furloughed employees must be assigned to code 0012. Payments to paid furloughed employees are excluded from the premium and experience rating calculations only if the employer keeps separate, accurate, and verifiable records. 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 (coronavirus) pandemic. If an employee is requested to perform any duties for an employer, the employee is not deemed a paid furloughed employee for any period of time they are performing duties for the employer and are assigned to the classification applicable to the work being performed.

The Hanover has implemented class code 0012 and we are prepared to endorse payroll unto our policyholders’ workers' compensation policies.

We would ask that you work with our mutual policyholders to communicate this new rating benefit where applicable and endorse the workers' compensation policy with qualifying wages to class code 0012. Also, please enclose a signed attestation from the policyholder to validate the payment of furlough wages to their employees. An attestation example is provided for your review and one will be required to endorse the furlough payroll on the workers' compensation policy.

We appreciate all the efforts necessary to identify and communicate these furlough payroll regulations; this is a unique situation and we value the opportunity to provide these options for premium relief.

If you have any questions at all, please feel free to direct them to your underwriter.

Download attestation form

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