SB 317 Changes Nevada’s Payroll Limitation For Premium Calculations
As we navigate the evolving landscape of Nevada employment law, we’re committed to keeping you informed about changes that directly impact your business operations, insurance program, and employee benefits.
What Has Changed?
As Nevada updates its workers’ compensation system, employers should be aware of an important change to how payroll is capped for workers’ compensation premium calculations.
Nevada Senate Bill 317 (SB 317) changes how payroll is capped for workers’ compensation premium calculations. This matters most for employers with higher-wage employees whose payrolls were previously limited under the old cap. Nevada is not moving to unlimited payroll for workers’ compensation premiums. Instead, the current $36,000 annual payroll cap is being replaced with a higher cap tied to the state’s maximum average monthly wage. Based on the current published wage figure referenced in NCCI’s analysis, that new cap is approximately $101,000. The effective date for the payroll cap change is October 1, 2026. The other changes become effective July 1, 2027.
In simple terms:
• Before: only the first $36,000 of payroll for certain employees counted toward premium calculations.
• After: up to approximately $101,000 of payroll will count, subject to the statutory formula and annual updates.
What Does This Mean for Premiums?
Although the payroll cap is increasing, NCCI has indicated that this change is expected to be generally premium-neutral on average statewide. Because workers’ compensation loss costs and assigned risk rates are developed based on payroll exposure, the increase in reportable payroll is expected to be offset by a corresponding decrease in loss costs and assigned risk rates. NCCI estimates that the overall loss costs in Nevada may decrease by approximately 33% to 43% in order to offset the increase in payrolls, resulting in no overall statewide premium change on average. However, individual employer impacts may still vary depending on industry group, class code, and wage distribution.
Why the Change?
The prior $36,000 cap had become low relative to current wage levels. SB 317 updates the payroll limitation formula so that payroll used for workers’ compensation premium calculations more closely reflects today’s earnings. The bill also includes several additional workers’ compensation reforms intended to improve aspects of system administration and claim handling.
Key Impacts to Employers
Changing premium calculations: Employers with higher-paid employees will likely have more payroll included in the premium calculation than under the old $36,000 cap.
Overall premiums are not expected to increase statewide: NCCI’s analysis indicates that the larger payroll base is expected to be o set by lower loss costs and assigned risk rates, making the effect generally premium-neutral on average statewide.
Individual employer outcomes may still vary. While the overall statewide effect is expected to be neutral on average, the impact on a specifc employer may vary. NCCI notes that some industry groups and classifications may experience effects that are less than or greater than the statewide average.
Cost Control Measures in SB 317
ODG Drug Formulary: Introduces evidence-based prescription guidelines to help reduce unnecessary or high-cost medications.
Faster temporary partial disability decisions: The bill sets a timeline for insurers to issue payment or make a determination, which may help move claims faster.
Provider list requirements: Insurers must maintain more reliable provider information, which can help injured workers access treatment more efficiently.
Other administrative updates: SB 317 includes broader workers’ compensation process changes intended to improve consistency and system efficiency.
What Should Employers Do Now
Review policies: Audit current Workers‘ Comp coverage and ask your broker to model the premium impact for policy periods affected on or after October 1, 2026.
Update payroll systems with accurate wages and job classifications.
Train HR Teams: Educate staff on the changes to handle claims accurately.
Strengthen safety programs, claims management, and return-to-work practices to help offset premium pressure.
If you have specific questions regarding your unique situation, please contact your insurance team directly.
This document is intended to be information only and does not constitute legal advise.