For staffing firms, workers’ compensation is one of the most significant insurance costs. At PEC, we believe that knowing how your rate is calculated is the first step toward managing it effectively and protecting your business.
Classification Codes and Payroll
Every employee is assigned a classification code that reflects the nature of their work. In staffing, this means correctly identifying the duties performed by each placed worker across different job sites and industries. These codes carry individual base rates set by the Pennsylvania Compensation Rating Bureau.
Your premium is calculated by multiplying the carrier’s classification rate by your payroll in that class, per $100. Accurate classifications and payroll reporting are essential to avoid overpaying or facing unexpected audits.
The Experience Modification Factor
Your experience modification factor, or mod, is based on your company’s historical loss experience compared to others of similar size and industry. A mod of 1.00 means your actual loss experience matches up with expected loss experience for companies of similar size and classification.. If your firm has fewer and less severe claims, your mod may be lower than 1.00, reducing your premium. A higher mod typically results in higher premiums.
Because staffing firms often have diverse placements and complex claim exposures, actively managing your mod can lead to substantial cost savings.
Captive Program Advantages
As a member of PEC’s captive program, you benefit from more than just traditional insurance coverage. You have access to shared risk management resources, expert claims handling, and potential dividend opportunities. This collaborative structure helps keep costs stable and predictable while supporting long-term safety improvements.
Why It Matters
Understanding how your rate is calculated empowers you to control it. With accurate classification, effective safety practices, and a partner like PEC, staffing firms can take a proactive role in reducing workers’ compensation expenses while protecting their people.
To learn more about how PEC supports staffing firms through our captive program, contact us today.