What factor is considered in establishing a rate for an employer's WC premiums?

The correct answer is based on the fact that remuneration, which refers to the total amount an employer compensates its employees, is a significant factor in determining workers’ compensation premiums. In Minnesota, as in many jurisdictions, the premiums that an employer is required to pay for workers' compensation insurance are calculated based on their payroll. This includes all forms of remuneration, such as wages, salaries, and bonuses paid to employees. The higher the remuneration, the greater the potential exposure for the insurance provider, leading to higher premiums.

When calculating workers' compensation rates, the insurer looks at the total payroll because it is directly correlated with the risk of workplace injuries and the potential costs associated with those injuries. More employees typically mean a greater chance of claims, hence a higher premium rate is assigned to account for this increased risk.

Other factors may play a role in the overall coverage and specifics of the policy, but the employee remuneration is foundational to establishing the premium rate. Elements like previous injury claims and industry regulations, while important in managing risk and ensuring compliance, do not directly impact the basic formula used to calculate premiums based on remuneration.