Many states and cities are enacting new minimum wage laws, and all will feel the impact. Not only will the cost of goods go up, but also every business will see an increase in workers’ compensation costs. Those Midland business with a high minimum wage work force will see an even higher premium increase.
Texas adopts the federal minimum wage rate. Effective July 24, 2009, the federal minimum wage is $7.25 per hour. The Texas Minimum Wage Act does not prohibit employees from bargaining collectively with their employers for a higher wage. Is Texas going to increased its minimum wage?
In California for example, the wage increase affects 43% of the state’s workforce and makes California’s minimum wage the highest in the country. Oregon Just passed a statewide minimum wage as well. Alaska, Arkansas, Colorado, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, Rhode Island, South Dakota, and Vermont also increased minimum wages in 2016.
Increased wages will mean increased payroll, and your workers’ compensation premiums are based on your payroll. With increased payroll, come increased benefits, which lead to increased overall claims costs and experience mods.
What is Workers’ Compensation?
Workers' compensation insurance is insurance that provides lost income, medical benefits, disability benefits, and rehabilitative services for workers injured on the job or while performing work-related duties.
Why Your Business Needs Workers’ Compensation Insurance
When one of your employees gets hurt on the job or has a work-related illness, only workers’ compensation will cover them. Health insurance benefits will not provide coverage for on the job injuries.
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