Key Changes of Nevada Senate Bill 317 SB317 and Their Impact on Business Owners
- Stephanie Miller
- 1 day ago
- 3 min read
Nevada Senate Bill 317 (SB317), signed into law in June 2025 and effective starting October 1, 2026, introduces significant changes to the state's workers' compensation system. These changes will directly affect business owners across Nevada, especially regarding insurance premiums and payroll calculations. Understanding these modifications is crucial for business owners to prepare for the financial and operational impacts ahead.
What Is Nevada Senate Bill 317?
SB317 is a legislative update aimed at reforming the workers' compensation insurance framework in Nevada. The bill focuses on removing the existing payroll cap used to calculate workers' compensation premiums. Previously, businesses paid premiums based on a capped amount of employee payroll, limiting the maximum payroll considered for insurance purposes. SB317 eliminates this cap, meaning the full payroll amount will now be used to determine premiums.
This change intends to create a more equitable system where insurance costs better reflect the actual size and payroll of a business. However, it also means that many business owners will face higher insurance premiums starting in late 2026.
Key Changes Introduced by SB317
Removal of the Payroll Cap
Before SB317, Nevada had a payroll cap for workers' compensation insurance premiums. This cap limited the payroll amount considered when calculating premiums, which often resulted in lower insurance costs for businesses with high payrolls. SB317 removes this cap entirely.
What this means:
Businesses will pay premiums based on their total payroll without any upper limit.
Larger businesses with higher payrolls will see a more significant increase in premiums.
Smaller businesses with payrolls below the previous cap will experience little to no change.
Adjusted Premium Calculations
With the cap removed, insurance carriers will calculate premiums using the full payroll figures. This change aligns premium costs more closely with the actual risk exposure of businesses.
Effective Date and Transition
The bill takes effect on October 1, 2026. This gives business owners time to review their current insurance policies and prepare for the upcoming premium adjustments.
How the Removal of the Payroll Cap Impacts Insurance Premiums
To understand the practical impact of SB317, consider the following example:
Example:
A business with 50 employees, each earning $60,000 annually.
Previous payroll cap was $36,000 per employee for premium calculations.
Total payroll for premium calculation before SB317: 50 employees × $36,000 = $1,800,000.
Total actual payroll: 50 employees × $60,000 = $3,000,000.
Premium Impact:
Under the old system, premiums were calculated on $1.8 million.
Under SB317, premiums will be calculated on $3 million.
This represents a 40% increase in the payroll base for premium calculations.
This example shows how businesses with employees earning above the previous cap will face higher insurance costs. The increase can be substantial depending on the size of the payroll exceeding the cap.
What This Means for Business Owners
Increased Insurance Costs
The most immediate impact is the rise in workers' compensation insurance premiums. Business owners should expect:
Higher annual insurance expenses.
The need to budget for increased operational costs.
Potential adjustments in employee compensation or hiring plans to manage costs.
Greater Transparency and Fairness
Removing the payroll cap creates a system where premiums more accurately reflect business size and risk. This can benefit smaller businesses that were previously subsidizing larger ones under the capped system.
Planning and Risk Management
Business owners should:
Review current payroll and insurance policies.
Consult with insurance providers to understand new premium structures.
Explore risk management strategies to reduce insurance costs, such as improving workplace safety.
Impact on Business Competitiveness
Higher insurance premiums may affect pricing, profitability, and competitiveness, especially for labor-intensive industries. Business owners might need to:
Adjust pricing strategies.
Increase operational efficiency.
Consider insurance alternatives or self-insurance options if feasible.
Preparing for SB317 Changes
Assess Payroll Data
Gather accurate payroll information to estimate future premium costs under the new system.
Engage with Insurance Providers
Discuss the implications of SB317 with your insurance agent or broker to get tailored advice and quotes.
Explore Cost-Saving Measures
Implement safety programs and employee training to lower workplace injury risks, which can help reduce premium rates.
Budget for Increased Expenses
Plan financials to accommodate higher insurance premiums starting in late 2026.
Final Thoughts
Nevada Senate Bill 317 marks a significant shift in how workers' compensation insurance premiums are calculated by removing the payroll cap. For business owners, this means higher premiums for those with payrolls exceeding the previous cap, but also a fairer system that aligns costs with actual business size.
Understanding these changes now allows business owners to prepare strategically, manage costs, and maintain a competitive edge. Start by reviewing your payroll and insurance policies today to navigate the transition smoothly and avoid surprises when SB317 takes effect.
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