Workers' compensation laws are designed to ensure payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. State workers' compensation tax laws vary by state. Some states have a quarterly workers compensation tax, although most states let employers purchase workers compensation insurance from private insurance companies. Washington is the only state with worker's compensation tax rates based on the hours worked rather than per $100 in wages paid. Local laws should be consulted for specific requirements in your area.
The following is an example of a state law dealing with worker's compensation taxes:
"(A) For the purpose of carrying out sections 4123.412 [4123.41.2] to 4123.418 [4123.41.8] of the Revised Code, the administrator of workers' compensation, with the advice and consent of the workers' compensation oversight commission, shall levy an assessment against all employers at a rate, of at least five but not to exceed ten cents per one hundred dollars of payroll, such rate to be determined annually for each employer group listed in divisions (A)(1) to (3) of this section, which will produce an amount no greater than the amount the administrator estimates to be necessary to carry out such sections for the period for which the assessment is levied. In the event the amount produced by the assessment is not sufficient to carry out such sections the additional amount necessary shall be provided from the income produced as a result of investments made pursuant to section 4123.44 of the Revised Code.
Assessments shall be levied according to the following schedule:
Amounts assessed in accordance with this section shall be collected from each employer as prescribed in rules the administrator adopts.
The moneys derived from the assessment provided for in this section shall be credited to the disabled workers' relief fund created by section 4123.412 [4123.41.2] of the Revised Code. The administrator shall establish by rule classifications of employers within divisions (A)(1) to (3) of this section and shall determine rates for each class so as to fairly apportion the costs of carrying out sections 4123.412 [4123.41.2] to 4123.418 [4123.41.8] of the Revised Code.
(B) For all injuries and disabilities occurring on or after January 1, 1987, the administrator, for the purposes of carrying out sections 4123.412 [4123.41.2] to 4123.418 [4123.41.8] of the Revised Code, shall levy an assessment against all employers at a rate per one hundred dollars of payroll, such rate to be determined annually for each classification of employer in each employer group listed in divisions (A)(1) to (3) of this section, which will produce an amount no greater than the amount the administrator estimates to be necessary to carry out such sections for the period for which the assessment is levied.
Amounts assessed in accordance with this division shall be billed at the same time premiums are billed and credited to the disabled workers' relief fund created by section 4123.412 [4123.41.2] of the Revised Code. The administrator shall determine the rates for each class in the same manner as he fixes the rates for premiums pursuant to section 4123.29 of the Revised Code.
(C) For a self-insuring employer, the bureau of workers' compensation shall pay to employees who are participants regardless of the date of injury, any amounts due to the participants under section 4123.414 [4123.41.4] of the Revised Code and shall bill the self-insuring employer, semiannually, for all amounts paid to a participant. "
