On July 1st, 2019 New York construction payroll limitation will increase. The New York Compensation Insurance Rating Board has made an update to the construction industry payroll limitation. Effective July 1st, 2019 the limitation will increase from $1,401.17. This new limitation applies to policies effective on or after July 1st, 2019. For policies effective before July 1st, 2019, the limitation remains at $1,357.11 per week
What is the construction payroll limitation?
Construction employees working under specific classifications will earn higher than average wages. Location, skill level, and working on a prevailing wage job are reasons for this. This means employers paying higher wages for the same work end up paying higher premiums. The Rating Board started the payroll limitation in 1999 to bring fairness to insurance premiums by evening out the playing field. Each week, payroll for qualifying employees is established at the limitation set by the Rating Board for audit purposes.
What does this mean?
If a qualifying construction employee earns more than the limitation throughout the week, their payroll is capped at the limitation for audit purposes. Additionally, the limitation applies from week to week. If an employee earns more than the limitation one week, the rule applies. The full wage is included that week if an employee earns less than the limitation.
Does this apply to me?
If you are in the construction industry and have employees in the qualifying classes, this will apply to you. You can find a list of the eligible codes on the State Insurance Fund website.
Furthermore, if any of your employees earn more than the limitation, your workers compensation insurance might cost more than it should.
What About Wrap Ups?
Good Question! The payroll limitation also applies on Wrap Ups too. Your certified payroll reports may not have a provision to report limited payroll. As such, you should not assume the wrap admin is making the adjustments for you.
