Florida Insurance Commissioner David Altmaier granted approval to the National Council on Compensation Insurance (NCCI) for a statewide overall workers’ compensation insurance rate decrease of 8.4 percent for policies effective in Florida as of January 1, 2023.

By lowering the cost for workers’ compensation insurance for employers. There may be substantial encouragement for more businesses to get involved with the construction trades in Florida as demand for those services has exploded in the wake of the massive damage done by hurricane IAN.

“Year after year, Floridians are seeing a decrease in workers’ compensation rates. This is fantastic news as Florida’s small businesses are the backbone of our economy and paying less for workers’ compensation coverage helps business owners combat the impacts of rising inflation,” said Chief Financial Officer Jimmy Patronis. “I’m always proud to support Florida’s small business community as we work to keep Florida the best place to live, work, and run a business.”

“I’m pleased to see the sixth consecutive year of a reduction in workers’ compensation rates,” said Attorney General Ashley Moody. “When businesses are able to succeed, they help create vibrant communities which ultimately allow Florida’s families to thrive.”

“For the sixth consecutive year, Florida businesses will see a reduction in workers’ compensation rates – which also means lower insurance costs for employers,” said Insurance Commissioner David Altmaier. “We look forward to another year of rate relief for Florida businesses.”

Additional information regarding the NCCI public hearing and rate filing is available on OIR’s website.

If your Florida based company is currently with a Professional Employer Organization (PEO), you may want to contact them to understand how your cost may be reduced starting in January 2023. If your Florida based company has a stand-alone Work Comp insurance policy now would be a good time to consider joining a PEO.

The impact of inflation and rising prices has become the top concern for businesses in the United States for quite a while.

Getting Inflation Defensive Strategies in Place

Larger businesses often have more cash reserves and more diverse revenue sources. Often operating within tight margins, many small and medium sized businesses have been adversely affected in the wake of COVID-19, supply chain disruptions, a tight labor market, and fear of an economic downturn.

These challenges happening simultaneously and compounded by inflation, means SMBs need to prepare defenses on multiple fronts at the same time.

Customers and Product Pricing

According to a study by the US Chamber of Commerce in March 2022, inflation pressures have caused 67% of small businesses to raise prices, with little relief in sight. Raising prices can have a negative effect on customers, especially for items with more price flexibility than essentials like gas and groceries. Obviously, customers dislike price hikes and business owners and managers must be aware of the delicate balance they have to strike to keep margins healthy while maintaining the customer’s trust.

Suppliers and Vendors

Rising prices don’t just affect your customers. Inflation also means the costs to run a small or medium-size business are rising. Many price hikes are the result of higher expenses born by suppliers. A survey from Business.org found that 9 out of 10 small business owners have dealt with rising costs of supplies and services since the start of the global pandemic. Around one in four of those surveyed have experienced hikes of around 20%.

Small and medium businesses must deal with inflation regarding their vendor and supplier partnerships also, which can not only strain their budget but may have negative effects on their personal relationships as well.

What it means for your team

It’s important to remember the key to your company’s success: your employees. The feel the strain from inflation both on the job and in their personal lives: when they buy groceries and fill up the gas tank, when they negotiate deals with vendors, when they interact with irritated customers, and when they get home and see bills stacking up. Economists and psychologists have noted that for many workers their emotional response to inflation makes them really upset. Managers should be aware that inflation is yet another stressor that hits workers at both work and home. In some cases managers may want to review their employee compensation arrangements and determine if they have the financial ability to improve that compensation in order to keep employees economically whole.

What you can do

With rising prices, it’s more important than ever to be a focused business leader at your small or medium-size organization. Pricing and sourcing decisions must be made carefully, and it’s a good time to look for ways to reduce spending where possible. If your business is paying for a service that you are not fully utilizing it may be a good time to reconsider if bearing that expense is worthwhile.

Depending on your business size, your industry and how leveraged you are, smart leaders can either look for more ways to cut operating costs or think of ways to grow and scale the company.

Employee satisfaction and engagement should be a priority, especially as employment numbers remain strong. Although you may not have the cash on hand for employee bonuses or raises to keep up with inflation rates, there are other policies you can implement to show your workers how much you care. That might include allowing for flexible work schedules to reduce the amount of money they are spending on gas. In addition, reviewing how competitive your total suite of compensation and employee benefits is with competing employers is a good way to keep your employees happier. If a bonus is not feasible, you could offer additional vacation days or other kinds of flexible policies to show that you realize the strain they have been under. Making employees feel like their situation is recognized in a work context is key to keeping them engaged.

Inflation is a particular kind of economic problem that attacks in multiple ways and smart small and medium-size businesses should prepare their defenses accordingly.

It remains uncertain how the massive increase in unemployment claims due to the COVID-19 crisis will be handled financially. Business owners and PEOs have concerns that the state unemployment (UI) funds will increase each operating company’s associated SUTA experience rate dramatically in the future.

Recently passed legislation for THE CARES ACT may make the best financial option to not release employees and then encourage them to file an unemployment claim. This legislation provides $350B in forgivable loans and allows business owners to retain their workers and ensure that those employees continue their compensation. It’s good for small businesses and their employees

With the passage of THE CARES ACT it may be financially in the best interest for the business owners and the employees to retain the employees on the payroll and use provisions in THE CARES ACT to be reimbursed for those paid wages during the crisis. In addition, most employee wages will exceed the compensation amount available via unemployment.

Highlights of THE CARES ACT

Begin by applying through a Small Business Administration (SBA) participating bank. Act by June 30, 2020.

They will require an affidavit be signed attesting to the business being adversely affected. Causes can include: a decrease in gross receipts or customers, business closure, staffing problems and supply chain disruptions.

Eligibility requires that the business have less than five hundred employees. Eating establishments may apply with less than five hundred employees per location.

The loan must be used for payroll, mortgage interest, utilities or rent. The loan will be forgiven if used to these purposes and such can be proven with documents and receipts. Loan amounts not used for the listed purposes will not be eligible for forgiveness and will be become a ten-year loan at a maximum interest rate of four percent.

Business using a Professional Employer Organization (PEO) should contact their assigned representative to get the appropriate payroll records and to receive advice on how the program can help them sustain their company.

• 76 percent of PEOs reported revenue increased in Q4 2018 compared to one year earlier.
• In the most recent quarter (2019 Q1), small business optimism dipped but remained historically high (its 15-year peak had been reached in the previous quarter).
• Total employment among small businesses (1-49 employees) increased by 118,000 jobs in 2019 Q1.
• 74 percent of the growth was among businesses with 20-49 employees.
• Over the last 12 months, the unemployment rate has decreased in 35 states, while increasing in 10.
• The average wage rate among small business employees went up 2.5% over the last 12 months.
• The hiring and job openings rates are currently highest in the Leisure/Hospitality and Professional/Business Services industries.
• Small business wages increased the most in Leisure/Hospitality and Manufacturing over the last 12 months.

Small Business Employment Change

Employment (total non-farm private sector), change in thousands, by company size

Unemployment Rates Dropping – Wages Increasing

In some of the largest states, unemployment claims are dropping and wages are increasing for workers at business with less than 50 employees.  The economy keeps getting better for the USA!

2019 Q1 Unemployment Rates by State

Conditions by Industry Sector

As the competition for workers escalates small business are raising wages and must work harder to make their companies a preferred employment option in their industry and location. Joining a PEO allows small business to offer top shelf benefits package for their workers.

Data in this article was sourced partially from the National Association of Professional Employers- NAPEO. We thank them for their good work.