Experience mod (workers comp)
The experience modification factor scales workers comp premium up or down based on your claims history relative to your industry’s expected losses.
A mod of 1.0 is average for your class codes and payroll size; below 1.0 earns a discount, above 1.0 a surcharge. Some general contractors and project owners refuse subcontractors with mods above 1.0, which turns the mod from a pricing input into a revenue gate for trades businesses.
A PEO arrangement can change how the client’s payroll and claims enter experience rating, but policy and state rules vary. Do not assume a poor record disappears or that a favorable mod will remain available after exit. Ask the carrier or rating authority how the specific program reports unit statistical data, claims, and client experience.