PROPOSED RULES
LABOR AND INDUSTRIES
Original Notice.
Preproposal statement of inquiry was filed as WSR 01-11-149.
Title of Rule: Workers' compensation plan, chapter 296-17 WAC.
Purpose: The agency proposes to revise the general reporting rules and classification plan. This includes amending two general reporting rules, repealing ten existing drywall risk classifications and establishing four new drywall risk classifications applicable to chapter 296-17 WAC for workers' compensation insurance underwritten by the Department of Labor and Industries.
Statutory Authority for Adoption: RCW 51.16.035.
Statute Being Implemented: RCW 51.16.035.
Summary: The department proposes to amend two general reporting rules, establish four new drywall risk classification definitions, and repeal ten drywall risk classification definitions.
Reasons Supporting Proposal: RCW 51.16.035 requires that the department maintain actuarial solvency of the industrial insurance (workers' compensation) funds and maintain a classification plan. Adjustments to the classification and rating plan reflect changes in Washington industries. Revisions to general reporting rules and risk classification definitions are being amended to provide greater detail and clarity for rules applicable to the drywall industry.
Name of Agency Personnel Responsible for Drafting: Ken Woehl/Bill Vasek, Tumwater, Washington, (360) 902-4775/902-5015; Implementation: Kathy Kimbel/Ken Woehl, Tumwater, Washington, (360) 902-4739/902-4775; and Enforcement: Doug Mathers, Tumwater, Washington, (360) 902-4750.
Name of Proponent: Department of Labor and Industries, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The department is required by RCW 51.16.035 to establish and maintain a workers' compensation insurance classification plan that classifies all occupations or industries within the state, and to set basic rates of premium for all classifications. The rule proposals are intended to better clarify certain general reporting rules, to distribute the costs fairly among employers, and to ensure actuarial solvency. The department proposes to revise the general reporting rules and classification plan applicable to the drywall industry.
This includes amending two general reporting rules, establishing four new drywall risk classifications, and repealing ten drywall risk classification definitions applicable to chapter 296-17 WAC for workers' compensation insurance underwritten by the Department of Labor and Industries.
The department is proposing changes to the general reporting rules classification plan for the drywall industry in order to provide greater detail and descriptions for the classification definitions applicable to the drywall industry.
Proposal Changes the Following Existing Rules: Amend General Reporting Rules: WAC 296-17-35203 Special reporting instructions and 296-17-31013 Building construction.
Establish New Risk Classifications: WAC 296-17-52140 Classification 0540 Wallboard installation -- Discounted rate, 296-17-52141 Classification 0541 Wallboard taping -- Discounted rate, 296-17-52150 Classification 0550 Wallboard installation -- Nondiscounted rate, and 296-17-52151 Classification 0551 Wallboard taping -- Nondiscounted rate.
Repeal Existing Risk Classifications: WAC 296-17-52116 Classification 0524 Wallboard installation -- Discounted
rate, 296-17-52118 Classification 0526 Wallboard taping -- Discounted rate, 296-17-52119 Classification 0527 Wallboard priming and texturing -- Discounted rate, 296-17-52120 Classification 0528 Wallboard stocking by nonmaterial
dealer employees -- Discounted rate, 296-17-52121 Classification 0529 Wallboard scrapping by nonmaterial dealer employees -- Discounted rate, 296-17-52122 Classification 0530 Wallboard installation -- Nondiscounted rate, 296-17-52123 Classification 0531 Wallboard taping -- Nondiscounted rate, 296-17-52124 Classification 0532 Wallboard priming and texturing -- Nondiscounted rate, 296-17-52125 Classification 0533 Wallboard stocking by nonmaterial dealer employees -- Nondiscounted rate, and 296-17-52126 Classification 0534 Wallboard scrapping by nonmaterial dealer employees -- Nondiscounted rate.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
The Insurance Services Division of the Department of Labor and Industries is proposing amendments to various sections of chapter 296-17 WAC applicable to the drywall industry reporting rules, classification definitions and rating rules. Amendments include amending two general reporting rules, adding four new risk classification definition sections, repealing ten risk classification definition sections, and amending two experience rating rules (tables). The department is granted authority to modify these rules through the provisions of RCW 51.16.035.
RCW 51.16.035 states, in part, that the department shall classify all occupations or industries by degree of hazard, and set basic rates of premium which are the lowest necessary to maintain actuarial solvency of the accident and medical aid funds. This law allows the department to set and/or adjust premium rates annually, or at other times as necessary to carry out the legislative standard of rate adequacy.
The department has complied with these mandates by establishing more than 300 classifications of risk and related premium rates. The rate assigned to each classification is a composite of three separate components commonly known as the accident, medical aid, and supplemental pension funds. Premium rates applicable to each risk classification are based, in part, on the claims experience of employers reporting in the classification and the reported exposure (premium hours or units) over which this cost is spread. The actual premium rate paid by an employer is based on the nature of their business and is independent of employer size. Since the premium is based on hours or units worked, each employer pays an overall premium relative to the exposure of their workers.
The department's actuarial staff annually, or more frequently as financial conditions of the funds change, review the overall solvency of the workers' compensation trust funds, legislative mandates, past loss experience, general conditions of the state's economy and employment projections, to determine if adjustments are necessary to the premium base.
Chapter 19.85 RCW requires agencies to evaluate the economic impact to businesses when new rules or changes to existing rules are being considered. This law further requires agencies to mitigate the cost of compliance where possible to small business when such deviation is provided by law. Since the classification and rate making procedure (RCW 51.16.035) is legislatively mandated, and no provision is contained in these laws allowing the department to deviate from the legislative standard, the department is unable to provide a different standard for small businesses.
SUMMARY OF PROPOSED RULES: The department is proposing changes to chapter 296-17 WAC applicable to the drywall industry reporting rules, classification definitions, and rating rules. The rule proposals include amending two general reporting rules, adding four new risk classification definition sections, repealing ten risk classification definition sections, and amending two experience rating rules (tables). These changes would reduce the number of drywall risk classification definitions from ten classifications to four classifications and provide greater clarity and simplify the record-keeping requirements. Implementation of these changes will result in no additional premiums to the department, and provides no specialized treatment between small or large drywall businesses.
INDUSTRY ANALYSIS: Although the Regulatory Fairness Act requires economic analysis to be made using a six-digit North American Industry Classification Code (NAISC), such analysis relative to workers' compensation insurance premiums would distort the actual impact to businesses. NAISC codes are based on certain business groupings, and are often dissimilar in composition to workers' compensation insurance classifications. Also, most businesses insuring with the state fund are assigned several workers' compensation insurance classifications, but only a single NAISC code. Thus, a more precise analysis of impact to business can be derived using the department's workers' compensation plan.
COST OF COMPLIANCE: The department is proposing changes to chapter 296-17 WAC applicable to drywall businesses registered to perform work in Washington. The changes would reduce the number of drywall risk classification definitions from ten classifications to four classifications and provide greater clarity and simplify the record-keeping requirements. Implementation of the changes will result in no additional premiums to the department, and provides no specialized treatment between small or large drywall businesses.
The rule proposal includes repealing ten drywall risk classification definitions (0524-Wallboard installation - discounted rate, 0526-Wallboard taping - discounted rate, 0527-Wallboard priming and texturing - discounted rate, 0528-Wallboard stocking - discounted rate, 0529-Wallboard scrapping - discounted rate, 0530-Wallboard installation - nondiscounted rate, 0531-Wallboard taping - nondiscounted rate, 0532-Wallboard priming and texturing - nondiscounted rate, 0533-Wallboard stocking - nondiscounted rate, and 0534-Wallboard scrapping - nondiscounted rate) and creating four new drywall risk classification definitions (0540-Wallboard installation - discounted rate, 0541-Wallboard taping - discounted rate, 0550-Wallboard installation - nondiscounted rate, and 0541-Wallboard taping - nondiscounted rate).
The rule proposal does not impose additional record-keeping requirements, require the purchase of new equipment or completion of new forms or reports.
INVOLVEMENT OF SMALL BUSINESS: The department amends many general reporting rules and risk classification definitions at the request of businesses and trade associations. A major initiative to the drywall industry was undertaken in 1997 whereby the basis of workers' compensation premium reporting was formally changed from worker hours to square footage installed. Also in 1997, the number of risk classification definitions was expanded from two risk classifications to a total of ten risk classifications (drywall businesses could qualify for use of reporting in five discounted risk classifications or report in five nondiscounted risk classifications). The department also established an ad hoc drywall advisory committee in 1997, at the time these changes were made. This committee was comprised of a combination of business, labor, drywall supply dealers, and large and small drywall contractors. The purpose of this committee was to address additional concerns arising from drywall contractors to make future rule changes as needed. The rule changes as part of this rule proposal are the recommendations of this committee. These recommendations were further shared with all registered drywall businesses and a total of six statewide informal meetings (June 13 - June 22, 2001) were held to solicit comments, suggestions or concerns they may have. The result of these informal meetings was very neutral. The rule proposal treats all drywall businesses uniformly and consistently irrespective to the size of the business.
PROFESSIONAL SERVICES: This proposed change does not result in the need for additional professional service.
MITIGATION: Legislative authority granted to labor and industries relative to classification and rate setting does not include a provision for mitigating the cost of insurance for small businesses or exempting small businesses from the requirement to pay premiums. To the contrary, the legislative standard for rate making is that rates be based on business or occupational groupings and that they vary by degree of hazard. The more hazardous the industry or business grouping, the higher the premium rate per hour. Compliance with the mitigation provision of the Regulatory Fairness Act would cause the department to exceed its legislative authority and would be contrary to law.
CONCLUSION: In accordance with chapter 19.85 RCW, Regulatory Fairness Act, the department has evaluated the potential economic impacts of the 2002 workers' compensation general rules and classification definitions applicable to the drywall business community. This analysis concludes that the cost of compliance with the proposed rule changes will result in no total increase in premiums paid to the department.
This analysis has been conducted in order to provide industry, industry representatives, the legislature, and the department with an understanding of the potential impacts these proposed changes may produce.
A copy of the statement may be obtained by writing to Department of Labor and Industries, P.O. Box 4100 [44100], Olympia, WA 98504-4100, phone (360) 902-4776, fax (360) 902-4729.
RCW 34.05.328 does not apply to this rule adoption. Although the department was not required to prepare analysis under RCW 34.05.328, it has voluntarily completed the analysis.
Hearing Location: Spokane Labor and Industries Office, 901 North Monroe, Conference Room #4, Suite 100, Spokane, WA 99201-2149, on October 29, 2001, at 10:00 a.m.; and at the Tumwater Labor and Industries Office, 7273 Linderson Way S.W., First Floor Auditorium, Tumwater, WA 98504-4851, on November 2, 2001, at 10:00 a.m.
Assistance for Persons with Disabilities: Contact Office of Information and Assistance by November 2, 2001, TDD (360) 902-5797.
Submit Written Comments to: Department of Labor and Industries, Douglas Connell, Assistant Director for Insurance Services, P.O. Box 4100, Olympia, WA 98501-4100 [44100], or fax (360) 902-4729, or e-mail GUNT235@LNI.WA.GOV, by November 2, 2001.
Date of Intended Adoption: November 20, 2001.
September 19, 2001
Gary Moore
Director
OTS-5146.3
AMENDATORY SECTION(Amending WSR 99-18-068, filed 8/31/99,
effective 10/1/99)
WAC 296-17-31013
Building construction.
(1) Does this same
classification approach apply to building and construction
contractors?
Yes, but it may not appear that way without further explanation. We classify contractors by phase and type of construction since it is common for each contract to vary in scope.
Example: A contractor who builds and remodels private residences may frame the structure and work on no other phases of the project. On another job the same contractor may do only the interior finish carpentry. On still another job the contractor may install a wood deck or build a garden arbor. Each of these carpentry activities is covered by a different classification code. To ensure that contractor businesses receive the same treatment as other businesses, we assign classifications according to the phases and types of construction they contract to perform. Since some contractors specialize in one area of construction, such as plumbing, roofing, insulation, or electrical services, this classification approach mirrors that of nonbuilding contractor businesses. The policy of assigning several basic classifications to contractors engaged in multiple phases of construction may seem to be in conflict with the classification approach used for nonbuilding contractor businesses, but we have simply used the multiple business classification approach.
If we have assigned multiple classifications to your construction business you should take special care in maintaining the records required in the auditing and recordkeeping section of this manual. If we discover that you have failed to keep the required records we will assign all worker hours for which the records were not maintained to the highest rated classification applicable to the work that was performed.
(2) Who does this rule apply to?
If you are a building, construction or erection contractor
and we have assigned one or more of the following classifications
to your business, this rule applies to you: 0101, 0103, 0104,
0105, 0107, 0108, 0201, 0202, 0210, 0212, 0214, 0217, 0219, 0301,
0302, 0303, 0306, 0307, 0403, 0502, 0504, 0506, 0507, 0508, 0509,
0510, 0511, 0512, 0513, 0514, 0516, 0517, 0518, 0519, 0521,
((0524, 0526, 0527, 0528, 0529, 0530, 0531, 0532, 0533, 0534))
0540, 0541, 0550, 0551, 0601, 0602, 0603, 0607, 0608, and 0701.
(3) Can I have a single classification assigned to my business to cover a specific construction project?
Yes, to simplify recordkeeping and reporting requirements we will assign a single classification to cover an entire project.
(4) How do I request the single classification for one of my construction projects?
You should send your request to the attention of your policy manager at the address below:
Department of Labor and Industries
P.O. Box 44144
Olympia, Washington 98504-4144
(5) If I have asked for a single classification on one of my construction projects, how do you determine which classification will apply?
You must supply us with a description of the project and a break down of the total number of hours of exposure by phase of construction that you are responsible for.
Example: You notify us that your company will be responsible for all plumbing and iron erection work on a commercial building site. You have requested a single classification for this project. In your request you tell us that you estimate that it will take one thousand work hours to perform all the plumbing work and five hundred work hours to do the steel erection work.
With this information we will estimate the premiums by classification.
Example: We determine that the plumbing work is covered under classification 0306 and the steel erection work is covered under classification 0518. Assume that classification 0306 has an hourly premium rate of $1.50 and classification 0518 has an hourly premium rate of $2.55. We estimate the total premium on this job to be $2,775 (1,000 hours x $1.50 = $1,500 + 500 hours x $2.55 = $1,275).
Our next step in this process is to develop an average hourly rate for the project. We will use this information to select the single classification which will apply to this project.
Example: We will take the estimated premium ($2,775) and divide this number by the estimated hours (1,500) and arrive at an average hourly rate of $1.85.
To select the single classification that will apply to a construction project, we will compare the average hourly rate that we have computed to the rates of the classifications applicable to the project. We will select the classification whose hourly rate is the closest to the average hourly rate that we computed from the information you supplied us with.
Example: From the information you supplied, we have determined that the average hourly rate for this project is $1.85. We also know that the rate for the plumbing classification (0306) is $1.50 per hour and the rate for steel erection is $2.55 per hour. We would assign classification 0306 as the single classification applicable to this project.
(6) How will I know what classification will apply to my construction project?
We will send you a written notice which will specify the basic classification and premium rate that will apply to this project.
(7) If I have asked for a single classification to cover one of my construction projects, am I required to use the single classification which you gave me?
No, but you should call your policy manager to verify what other classifications would apply to the project. The name and phone number of your policy manager can be found on your quarterly premium report or your annual rate notice. For your convenience you can call us at (360) 902-4817 and we will put you in contact with your assigned policy manager.
(8) I am a general construction or erection contractor, I subcontract all my work and have no employees of my own. Do I have to report to the department of labor and industries?
No, since you do not have employees, you do not need to report to the department of labor and industries. You should be aware that the workers' compensation insurance laws of Washington include certain independent contractors as workers. If we determine that an independent contractor that you used qualifies as a covered worker, you will be responsible for the premium due for their work time. You can also be held responsible for premiums due to labor and industries if you subcontract with an unregistered contractor and they fail to pay premiums on behalf of their employees. It is in your best interest to make sure that your subcontractors are registered contractors by contacting us at 1-800-647-0982.
(9) Am I required to keep any special records of subcontractors that I use?
Yes, you are required to keep certain information about the subcontractors that you use. The information required is:
Subcontractor's legal name;
Contractor registration number and expiration date;
UBI number (or labor and industries account ID number).
If you supply materials to a subcontractor, also keep a record of the:
Amount of material supplied;
Project name or location;
Date material was supplied; and
Completion date of contracted work.
Failure to maintain these records may result in the subcontractor being considered a covered worker for whom you must report hours.
[Statutory Authority: RCW 51.16.035. 99-18-068, 296-17-31013, filed 8/31/99, effective 10/1/99; 98-18-042, 296-17-31013, filed 8/28/98, effective 10/1/98.]
The following rules shall apply to the written agreement:
(a) Agreement must be in writing and signed by the employer and the individual athlete.
(b) Agreement must specify the state that is to provide coverage. The state agreed upon to provide coverage must be a state in which the player's team, during the course of the season, will engage in an athletic event. For example, if the Washington-based team is a part of a league with teams in only Washington, Oregon, and Idaho, the player and the employer can agree to any of those three states to provide coverage. However, they could not agree to have California provide the coverage as this would not qualify as a state in which the player regularly performs assigned duties.
(c) The state agreed upon accepts responsibility for providing coverage and acknowledges such to the department by certified mail.
(d) Agreement and certification by the other state must be received by this department's underwriting section prior to any injury incurred by the athlete.
(e) Agreement will be for one season only commencing with the assigning of the player to a particular team. A separate agreement and certification must be on file for each additional season.
Failure to meet all of these requirements will result in the athlete being considered a Washington worker for premium and benefit purposes until such time as all requirements have been met.
Professional sports teams who are domiciled outside the state of Washington and who participate in sporting events with Washington-domiciled teams are not subject to Washington industrial insurance for their team members while in this state. These out-of-state teams are not considered employers subject to Title 51 on the basis that they are not conducting a business within this state.
(2) Excluded employments. Any employer having any person in their employ excluded from industrial insurance whose application for coverage under the elective adoption provisions of RCW 51.12.110 or authority of RCW 51.12.095 or 51.32.030 has been accepted by the director shall report and pay premium on the actual hours worked for each such person who is paid on an hourly, salaried-part time, percentage of profit or piece basis; or one hundred sixty hours per month for any such person paid on a salary basis employed full time. In the event records disclosing actual hours worked are not maintained by the employer for any person paid on an hourly, salaried-part time, percentage of profits or piece basis the worker hours of such person shall be determined by dividing the gross wages of such person by the state minimum wage for the purpose of premium calculation. However, when applying the state minimum wage the maximum number of hours assessed for a month will be one hundred sixty.
(3) Special trucking industry rules. The following subsection shall apply to all trucking industry employers as applicable.
(a) Insurance liability. Every trucking industry employer operating as an intrastate carrier or a combined intrastate and interstate carrier must insure their workers' compensation insurance liability through the Washington state fund or be self-insured with the state of Washington.
Washington employers operating exclusively in interstate or foreign commerce or any combination of interstate and foreign commerce must insure their workers' compensation insurance liability for their Washington employees with the Washington state fund, be self-insured with the state of Washington, or provide workers' compensation insurance for their Washington employees under the laws of another state when such other state law provides for such coverage.
Interstate or foreign commerce trucking employers who insure their workers' compensation insurance liability under the laws of another state must provide the department with copies of their current policy and applicable endorsements upon request.
Employers who elect to insure their workers' compensation insurance liability under the laws of another state and who fail to provide updated policy information when requested to do so will be declared an unregistered employer and subject to all the penalties contained in Title 51 RCW.
(b) Reporting. Trucking industry employers insuring their workers' compensation insurance liability with the Washington state fund shall keep and preserve all original time records/books including supporting information from drivers' logs for a period of three calendar years plus three months.
Employers are to report actual hours worked, including time spent loading and unloading trucks, for each driver in their employ. For purposes of this section, actual hours worked does not include time spent during lunch or rest periods or overnight lodging.
Failure of employers to keep accurate records of actual hours worked by their employees will result in the department estimating work hours by dividing gross payroll wages by the state minimum wage for each worker for whom records were not kept. However, in no case will the estimated or actual hours to be reported exceed five hundred twenty hours per calendar quarter for each worker.
(c) Exclusions. Trucking industry employers meeting all of the following conditions are exempted from mandatory coverage.
(i) Must be engaged exclusively in interstate or foreign commerce.
(ii) Must have elected to cover their Washington workers on a voluntary basis under the Washington state fund and must have elected such coverage in writing on forms provided by the department.
(iii) After having elected coverage, withdrew such coverage in writing to the department on or before January 2, 1987.
If all the conditions set forth in (i), (ii), and (iii) of this subsection have not been met, employers must insure their workers' compensation insurance liability with the Washington state fund or under the laws of another state.
(d) Definitions. For purposes of interpretation of RCW 51.12.095(1) and administration of this section, the following terms shall have the meanings given below:
(i) "Agents" means individuals hired to perform services for the interstate or foreign commerce carrier that are intended to be carried out by the individual and not contracted out to others but does not include owner operators as defined in RCW 51.12.095(1).
(ii) "Contacts" means locations at which freight, merchandise, or goods are picked up or dropped off within the boundaries of this state.
(iii) "Doing business" means having any terminals, agents or contacts within the boundaries of this state.
(iv) "Employees" means the same as the term "worker" as contained in RCW 51.08.180.
(v) "Terminals" means a physical location wherein the business activities (operations) of the trucking company are conducted on a routine basis. Terminals will generally include loading or shipping docks, warehouse space, dispatch offices and may also include administrative offices.
(vi) "Washington" shall be used to limit the scope of the term "employees." When used with the term "employees" it will require the following test for benefit purposes (all conditions must be met).
| The individual must be hired in Washington or must have been transferred to Washington; and | |
| The individual must perform some work in Washington (i.e., driving, loading, or unloading trucks). |
Failure to produce these required records within thirty days of the request, or within an agreed upon time period, shall constitute noncompliance of this rule and RCW 51.48.030 and 51.48.040. Employers whose premium computations are made by the department in accordance with (d) of this subsection are barred from questioning, in an appeal before the board of industrial insurance appeals or the courts, the correctness of any assessment by the department on any period for which such records have not been kept, preserved, or produced for inspection as provided by law.
(a) General definitions. For purpose of interpretation of this section, the following terms shall have the meanings given below:
(i) "Actual hours worked" means each workers' composite work period beginning with the starting time of day that the employees' work day commenced, and includes the entire work period, excluding any nonpaid lunch period, and ending with the quitting time each day work was performed by the employee.
(ii) "Work day" shall mean any consecutive twenty-four-hour period.
(b) Employment records. Every employer shall with respect to each worker, make, keep, and preserve original records containing all of the following information for three full calendar years following the calendar year in which the employment occurred:
(i) The name of each worker;
(ii) The Social Security number of each worker;
(iii) The beginning date of employment for each worker and, if applicable, the separation date of employment for each such worker;
(iv) The basis upon which wages are paid to each worker;
(v) The number of units earned or produced for each worker paid on a piece-work basis;
(vi) The risk classification(s) applicable to each worker;
(vii) The number of actual hours worked by each worker, unless another basis of computing hours worked is prescribed in WAC 296-17-31021. For purposes of chapter 296-17 WAC, this record must clearly show, by work day, the time of day the employee commenced work, and the time of day work ended;
(viii) A summary time record for each worker showing the calendar day or days of the week work was performed and the actual number of hours worked each work day;
(ix) In the event a single worker's time is divided between two or more risk classifications, the summary contained in (b)(viii) of this subsection shall be further broken down to show the actual hours worked in each risk classification for the worker;
(x) The workers' total gross pay period earnings;
(xi) The specific sums withheld from the earnings of each worker, and the purpose of each sum withheld;
(xii) The net pay earned by each such worker.
(c) Business, financial records, and record retention. Every employer is required to keep and preserve all original time records completed by their employees for a three-year period. The three-year period is specified in WAC 296-17-352 as the composite period from the date any such premium became due.
Employers who pay their workers by check are required to keep and preserve a record of all check registers and cancelled checks; and employers who pay their workers by cash are required to keep and preserve records of these cash transactions which provide a detailed record of wages paid to each worker.
(d) Recordkeeping - estimated premium computation. Any employer required by this section to make, keep, and preserve records containing the information as specified in (b) and (c) of this subsection, who fails to make, keep, and preserve such records, shall have premiums calculated as follows:
(i) Estimated worker hours shall be computed by dividing the gross wages of each worker for whom records were not maintained and preserved, by the state's minimum wage, in effect at the time the wages were paid or would have been paid. However, the maximum number of hours to be assessed under this provision will not exceed five hundred twenty hours for each worker, per quarter for the first audited period. Estimated worker hours computed on all subsequent audits of the same employer that disclose a continued failure to make, keep, or preserve the required payroll and employment records shall be subject to a maximum of seven hundred eighty hours for each worker, per quarter.
(ii) In the event an employer also has failed to make, keep, and preserve the records containing payroll information and wages paid to each worker, estimated average wages for each worker for whom a payroll and wage record was not maintained will be determined as follows: The employer's total gross income for the audit period (earned, received, or anticipated) shall be reduced by thirty-five percent to arrive at "total estimated wages." Total estimated wages will then be divided by the number of employees for whom a record of actual hours worked was not made, kept, or preserved to arrive at an "estimated average wage" per worker. Estimated hours for each worker will then be computed by dividing the estimated average wage by the state's minimum wage in effect at the time the wages were paid or would have been paid as described in (d)(i) of this subsection.
(e) Reporting requirements and premium payments.
(i) Every employer who is awarded a forest, range, or timber land services contract must report the contract to the department promptly when it is awarded, and prior to any work being commenced, except as provided in (e)(iii) of this subsection. Employers reporting under the provisions of (e)(iii) of this subsection shall submit the informational report with their quarterly report of premium. The report shall include the following information:
(I) The employers' unified business identification account number (UBI).
(II) Identification of the landowner, firm, or primary contractor who awarded the contract, including the name, address, and phone number of a contact person.
(III) The total contract award.
(IV) Description of the forest, range, or timber land services work to be performed under terms of the contract.
(V) Physical location/site where the work will be performed including legal description.
(VI) Number of acres covered by the contract.
(VII) Dates during which the work will be performed.
(VIII) Estimated payroll and hours to be worked by employees in performance of the contract.
(ii) Upon completion of every contract issued by a landowner or firm that exceeds a total of ten thousand dollars, the contractor primarily responsible for the overall project shall submit in addition to the required informational report described in (e)(i) of this subsection, report the payroll and hours worked under the contract, and payment for required industrial insurance premiums. In the event that the contracted work is not completed within a calendar quarter, interim quarterly reports and premium payments are required for each contract for all work done during the calendar quarter. The first such report and payment is due at the end of the first calendar quarter in which the contract work is begun. Additional interim reports and payments will be submitted each quarter thereafter until the contract is completed. This will be consistent with the quarterly reporting cycle used by other employers. Premiums for a calendar quarter, whether reported or not, shall become due and delinquent on the day immediately following the last day of the month following the calendar quarter.
(iii) A contractor may group contracts issued by a landowner, firm, or other contractor that total less than ten thousand dollars together and submit a combined quarterly report of hours, payroll, and the required premium payment in the same manner and periods as nonforestation, range, or timber land services employers.
(f) Out-of-state employers. Forest, range, or timber land services contractors domiciled outside of Washington state must report on a contract basis regardless of contract size for all forest, range, or timber land services work done in Washington state. Out-of-state employers will not be permitted to have an active Washington state industrial insurance account for reporting forest, range, or timber land services work in the absence of an active Washington forest, range, or timber land services contract.
(g) Work done by subcontract. Any firm primarily responsible for work to be performed under the terms of a forest, range, or timber land services contract, that subcontracts out any work under a forest, range, or timber land services contract must send written notification to the department prior to any work being done by the subcontractor. This notification must include the name, address, Social Security number, farm labor contractor number, (UBI) of each subcontractor, and the amount and description of contract work to be done by subcontract.
(h) Forest, range, or timber land services contract release - verification of hours, payroll, and premium. The department may verify reporting of contractors by way of an on-site visit to an employers' work site. This on-site visit may include close monitoring of employees and employee work hours. Upon receipt of a premium report for a finished contract, the department may conduct an audit of the firm's payroll, employment, and financial records to validate reporting. The department will notify the contractor, and the entity that awarded the contract, of the status of the contractors' account immediately after verification. The landowner, firm, or contractors' premium liability will not be released until the final report for the contract from the primary contractor and any subcontractors has been received and verified by the department.
(i) Premium liability - work done by contract. Washington law (RCW 51.12.070) places the responsibility for industrial insurance premium payments primarily and directly upon the person, firm, or corporation who lets a contract for all covered employment involved in the fulfillment of the contract terms. Any such person, firm, or corporation letting a contract is authorized to collect from the contractor the full amount payable in premiums. The contractor is in turn authorized to collect premiums from any subcontractor they may employ his or her proportionate amount of the premium payment.
To eliminate premium liability for work done by contract permitted by Title 51 RCW, any person, firm, or corporation who lets a contract for forest, range, or timber land services work must submit a copy of the contract they have let to the department and verify that all premiums due under the contract have been paid.
Each contract submitted to the department must include within its body, or on a separate addendum, all of the following items:
(I) The name of the contractor who has been engaged to perform the work;
(II) The contractor's UBI number;
(III) The contractor's farm labor contractor number;
(IV) The total contract award;
(V) The date the work is to be commenced; a description of the work to be performed including any pertinent acreage information;
(VI) Location where the work is to be performed;
(VII) A contact name and phone number of the person, firm, or corporation who let the contract;
(VIII) The total estimated wages to be paid by the contractor and any subcontractors;
(IX) The amount to be subcontracted out if such subcontracting is permitted under the terms of the contract;
(X) The total estimated number of worker hours anticipated by the contractor and his/her subcontractors in the fulfillment of the contract terms;
(j) Reports to be mailed to the department. All contracts, reports, and information required by this section are to be sent to:
The Department of Labor and Industries
Reforestation Team 8
P.O. Box 44168
Tumwater, Washington 98504-4168
(k) Rule applicability. If any portion of this section is
declared invalid, only that portion is repealed. The balance of
the section shall remain in effect.
(5) Logging and/or tree thinning -- Mechanized operations -- Industry rule. The following subsection shall apply to all employers assigned to report worker hours in risk classification 5005, WAC 296-17-66003.
(a) Every employer having operations subject to risk classification 5005 "logging and/or tree thinning - mechanized operations" shall have their operations surveyed by labor and industries insurance services staff prior to the assignment of risk classification 5005 to their account. Annual surveys may be required after the initial survey to retain the risk classification assignment.
(b) Every employer as a prerequisite of being assigned risk classification 5005 and having exposure (work hours) which is reportable under other risk classifications assigned to the employer shall be required to establish a separate subaccount for the purpose of reporting exposure (work hours) and paying premiums under this risk classification (5005). Except as otherwise provided for in this rule, only exposure (work hours) applicable to work covered by risk classification 5005 shall be reported in this subaccount. In the event that the employer's only other reportable exposure (work hours) is subject to one of the standard exception risk classifications, or the shop or yard risk classification then all exposure (work hours) will be reported under a single main account.
(c) Every employer assigned to report exposure (work hours) in risk classification 5005 shall supply an addendum report with their quarterly premium report which lists the name of each employee reported under this classification during the quarter, the Social Security number of such worker, the piece or pieces of equipment the employee operated during the quarter, the number of hours worked by the employee during the quarter, and the wages earned by the employee during the quarter.
(6) Special drywall industry rule.
(a) Why have we changed the way you pay premiums? Under
Washington law (RCW 51.16.035), we are given the authority to
establish how workers' compensation insurance rates are computed.
For most industries, workers' compensation insurance rates are
based on hours worked by employees. While the worker hour system
works well for most industries, this method of paying premium can
be unfair when a large segment of workers within an industry are
not paid an hourly wage. The drywall industry is one in which
many workers are paid on the basis of material installed((,))
and/or finished, ((stocked and/or scrapped)) (piece work), not
the hours they work. To help remedy the problems caused by
using work hours as the basis of how you pay premiums, and to
provide greater fairness to employers engaged in drywall work,
the premium for classifications ((0524, 0526, 0527, 0528, 0529,
0530, 0531, 0532, 0533, and 0534)) 0540, 0541, 0550, and 0551 is
based on material (square feet).
(b) How can I qualify for a discounted rate? For each drywall industry classification, we have established a second classification covering the same activity. The second classification carries a discounted rate. To qualify for a discounted classification and rate you are required to meet all of the following conditions:
(i) Prior to the end of the quarter that you want the discounted classifications and rates to be applied to your business, you (an owner/officer) must attend two workshops that we offer. For example, if you want the discounted classifications and rates to apply to your business for the third calendar quarter (July 1 through September 30), you (an owner/officer) must attend the two workshops by September 30. One workshop covers claims and risk management practices; the other workshop covers premium reporting and recordkeeping. The two workshops may be offered together or separately. Be sure to sign in so that you receive credit for attending the workshops.
(ii) You (an owner/officer) must provide us with a signed
and completed voluntary release of information form that we
((will)) may provide to you ((or your representative)) at the
workshops. If we audit your account we will use this release
form to obtain material and supply/purchase sales records from
the material supply dealer(s) you use. This will aid us as we
verify the information you supply us on your premium and
supplemental reports. If we need to verify the information that
you supplied us, we will send you written notice before we
contact your material supply dealer(s). We must receive this
release form prior to the end of the quarter in which you want
the discounted classifications and rates to become effective. For example, if you want the discounted classifications and rates
to apply to your business for the third calendar quarter (July 1
through September 30), we must receive your signed and completed
release of information form by September 30. You can complete
the voluntary release form at the workshop and give it to our
representative at the workshop or mail it to:
Labor and Industries
Employer Services - Drywall Manager
P.O. Box 44166
Olympia, Washington 98504-4166
(iii) You must submit complete and accurate premium reports
when they are due and be current with all premium reports and
payments. If you owe us money (premiums) for any quarter ((or
period prior to December 31, 1996)), we will not allow you to
report in the discounted classifications((. To meet this
condition you must file all reports required by this section when
due; and if you have not paid premiums which were due for any
quarterly report you submitted to us prior to and including the
fourth quarter 1996 (October 1, through December 31, 1996),
either pay the balance due immediately or maintain a current
payment agreement with us for any past due premium. For purposes
of this section, a "current payment agreement" is a written legal
agreement which we have approved and entered into with you. This
agreement will set forth your unpaid premium obligation, any
applicable penalties and interest that must be paid, the amount
of each installment (payment) and a schedule of payment due
dates. If you fail to make any payment covered in a payment
agreement you will lose the right to use the discounted
classifications and rates. You will not be allowed to use a
discounted classification or rate if you fail to submit reports,
or make premium payments on time for any period beginning with
the first quarter 1997)) until your premium obligations have been
paid. This requirement applies to any classification assigned to
your business and for any exposure (hours, square feet, etc.,)
which occurs ((after January 1, 1997)). Businesses requesting
the use of the discounted classifications while in field audit
status shall not be assigned the discounted classifications and
rates until the audit process is complete and all criteria for
this rule have been met.
(iv) You must provide us with a supplemental quarterly report which shows by employee the employee's name and Social Security number, the wages you paid them during the quarter, the basis for how they are paid, (piece rate, commission, hourly, etc.,) their rate of pay per unit/hour, and a notation as to whether they are an installer, finisher, scrapper, painter, etc. This report is to be attached to and submitted with your quarterly premium report.
(v) For any work which you subcontract to others, you must maintain the records described in WAC 296-17-31013 which requires you to keep certain information about the subcontractors you use and materials you may have supplied to the subcontractors.
(vi) You must keep and retain the payroll and employment records described in WAC 296-17-35201.
If you do not meet all of the above conditions, we will not assign the discounted rates to your business and you will be required to pay premiums in the nondiscounted classification(s).
(c) Can I be disqualified from using the discounted rates? Yes, as opposed to failing to qualify because you did not meet the conditions of (b) of this subsection, your business will be disqualified from using the discounted premium rates if:
| You do not file premium reports on time; | |
| You fail to pay premiums on time; | |
| You under report or misclassify the work performed by your employees; or | |
| (( |
|
| You fail to meet any other condition set forth in this rule. |
(e) I have several businesses. If one of my businesses is disqualified from using the discounted rates will that affect my other businesses? Yes, if you have ownership interest in a business which has been disqualified from using the discounted rates, and you also have ownership interest in other construction businesses which have separate industrial insurance accounts or subaccounts, all businesses in which you have ownership interest will be disqualified from using the discounted rates. This includes a business which you own or owned that is in bankruptcy status and for which you have not entered into a payment agreement, if you owe us any money; or money that you owe us which we wrote off as an uncollectible debt.
(f) If I make a mistake in how I reported to you, should I correct the error? Yes, you should send in a revised report(s) with an explanation of the error you are trying to correct to the drywall underwriter. If we audit your business, and we determine that you have under reported exposure in any classification assigned to your business, all exposure which you reported in the discounted classifications for the audit period will be reclassified to the nondiscounted classifications.
(g) If I disagree with an audit or other decision can I still use the discounted rates while we are resolving the issue? Yes, if you are involved in a dispute with us over the status of an independent contractor, the issue being whether an individual is a covered worker; the proper classification of work your employees performed; or under reporting; you may qualify for the discounted classifications by paying the disputed amount while the issue is under dispute. In the event the issue is resolved in your favor we will refund any moneys which you paid which were disputed. We will not pay interest on the refunded amount. If you do not pay the audit balance or disputed amount when requested or do not post an equivalent bond, you will not be permitted to use any of the discounted classifications.
(h) I am the owner of the business, and I do some of the work myself. Can I deduct the work I do from the total square feet to be reported to you? Yes, as an owner of the business you can deduct the amount of work that you did from the total square feet which you are going to report to us.
(i) How do I calculate and report this deduction to you? To claim this deduction you must send us a report which shows by job, project, site or location the total amount of material that was installed or finished at that job, project, site or location; the amount of material which you, the owner, installed and/or finished at the job, project, site or location; the hours it took you to install and/or finish the material you are claiming deduction for; the total material installed and/or finished by subcontractors (including the subcontractor's legal name and Unified Business Identifier (UBI) at the job, project, site or location); the total material installed and/or finished by employees at the job, project, site or location; and the hours the employees worked by job, project, site or location. This report must accompany the quarterly report in which you are claiming a deduction. If there are several owners, you must supply this information for each owner for whom you wish to claim a deduction.
[Statutory Authority: RCW 51.16.035. 99-18-068, 296-17-35203, filed 8/31/99, effective 10/1/99; 98-18-042, 296-17-35203, filed 8/28/98, effective 10/1/98.]
0540-00 Wallboard installation, including scrapping - discounted
rate (to be assigned only by the drywall underwriter)
Applies to contractors engaged in the installation or repair
of wallboard. This classification includes the installation of
wallboard, drywall, or sheetrock in all types of residential or
commercial buildings or structures. The process consists of
cutting wallboard with a utility knife, hacksaw, or power saw to
the desired size and then butting material into place and nailing
or screw fastening to wood or metal wall studs. Electrical box,
window, or door openings are cut out where needed. Installation
may require the use of scaffolding, ladders, specialty lifts, or
stilts when working at heights, including the use of T holders or
hydraulic lifts to hold material being installed on ceilings.
This classification also includes wallboard scrapping (picking up
and discarding unused portions of wallboard remnants or scraps)
at the construction site when performed by employees of the
wallboard contractor.
This classification excludes delivery of materials to the construction site by material dealer employees which is to be reported separately in the applicable delivery classification; delivery and stocking of materials to the construction site when performed by employees of the wallboard contractor which is to be reported separately in classification 1101; wallboard taping (including priming and texturing when performed by employees of the wallboard contractor) which is to be reported separately in classification 0541 or 0551; wallboard scrapping by nonwallboard contractor employees which is to be reported separately in the applicable construction debris cleanup classification; plastering, stuccoing or lathing work which is to be reported separately in classification 0303; and the framing of nonbearing walls when performed by the drywall contractor which is to be reported separately in classification 0516.
Special note: The basis of premium for this classification is material installed (square feet). The amount used to determine premium calculation for material installed shall be the same amount used for premium calculation of material finished for use in classification 0541 or 0551. The amount of wallboard purchased for each job, project, site or location shall be equal to the amount of material installed or finished. For contractors to be assigned and continue to report in this classification, their account must remain in good standing and conform to the conditions specified in the special drywall industry rule.
[]
0541-00 Wallboard taping, including texturing and priming
-discounted rate (to be assigned only by the drywall underwriter)
Applies to contractors engaged in taping wallboard in
residential or commercial buildings or structures. The process
of taping occurs after wallboard, drywall, or sheetrock has been
installed and involves taping the seams, and spreading joint
compound over the seams and nail or screw heads. When dry, the
seams are sanded to remove any rough edges. This classification
includes the following activities when performed by employees of
a wallboard contractor and part of the taping process which
includes wallboard texturing (a putty-like material that is
sprayed over the prepared wallboard in a clump-like application
and smoothed with a trowel or putty knife), and wallboard priming
(the application of an undercoating that may be applied either
directly to the wallboard or after it has been textured). This
classification also includes incidental painting when performed
by employees of a wallboard contractor and part of the taping
process.
This classification excludes wallboard installation which is to be reported separately in classification 0540 or 0550; wallboard priming and texturing not performed by employees of the wallboard contractor and part of the taping process which is to be reported separately in classification 0521; interior painting which is to be reported separately in classification 0521; and wallboard scrapping by nonmaterial dealer employees which is to be reported separately in classification 0540 or 0550.
Special note: The basis of premium for this classification is material finished (square feet). The amount used to determine premium calculation for material finished shall be the same amount used for premium calculation of material installed for use in classification 0540 or 0550. The amount of wallboard purchased for each job, project, site or location shall be equal to the amount of material installed or finished. For contractors to be assigned, and continue to report in this classification, their account must remain in good standing and conform to the conditions specified in the special drywall industry rule.
[]
0550-00 Wallboard installation, including scrapping
-nondiscounted rate (to be assigned only by the drywall
underwriter)
This classification excludes delivery of materials to the construction site by material dealer employees which is to be reported separately in the applicable delivery classification; delivery and stocking of materials to the construction site when performed by employees of the wallboard contractor which is to be reported separately in classification 1101; wallboard taping (including priming and texturing when performed by employees of the wallboard contractor) which is to be reported separately in classification 0541 or 0551; wallboard scrapping by nonwallboard contractor employees which is to be reported separately in the applicable construction debris cleanup classification; plastering, stuccoing or lathing work which is to be reported separately in classification 0303; and the framing of nonbearing walls when performed by the drywall contractor which is to be reported separately in classification 0516.
Special note: The basis of premium for this classification is material installed (square feet). The amount used to determine premium calculation for material installed shall be the same amount used for premium calculation of material finished for use in classification 0541 or 0551. The amount of wallboard purchased for each job, project, site or location shall be equal to the amount of material installed or finished. For contractors to be assigned and continue to report in this classification, their account must remain in good standing and conform to the conditions specified in the special drywall industry rule.
[]
0551-00 Wallboard taping, including texturing and priming
-nondiscounted rate (to be assigned only by the drywall
underwriter)
Applies to contractors engaged in taping wallboard in
residential or commercial buildings or structures. The process
of taping occurs after wallboard, drywall, or sheetrock has been
installed and involves taping the seams, and spreading joint
compound over the seams and nail or screw heads. When dry, the
seams are sanded to remove any rough edges. This classification
includes the following activities when performed by employees of
a wallboard contractor and part of the taping process which
includes wallboard texturing (a putty-like material that is
sprayed over the prepared wallboard in a clump-like application
and smoothed with a trowel or putty knife), and wallboard priming
(the application of an undercoating that may be applied either
directly to the wallboard or after it has been textured). This
classification also includes incidental painting when performed
by employees of a wallboard contractor and part of the taping
process.
This classification excludes wallboard installation which is to be reported separately in classification 0540 or 0550; wallboard priming and texturing not performed by employees of the wallboard contractor and part of the taping process which is to be reported separately in classification 0521; interior painting which is to be reported separately in classification 0521; and wallboard scrapping by nonmaterial dealer employees which is to be reported separately in classification 0540 or 0550.
Special note: The basis of premium for this classification is material finished (square feet). The amount used to determine premium calculation for material finished shall be the same amount used for premium calculation of material installed for use in classification 0540 or 0550. The amount of wallboard purchased for each job, project, site or location shall be equal to the amount of material installed or finished. For contractors to be assigned, and continue to report in this classification, their account must remain in good standing and conform to the conditions specified in the special drywall industry rule.
[]
The following sections of the Washington Administrative Code are repealed:
| WAC 296-17-52116 | Classification 0524. |
| WAC 296-17-52118 | Classification 0526. |
| WAC 296-17-52119 | Classification 0527. |
| WAC 296-17-52120 | Classification 0528. |
| WAC 296-17-52121 | Classification 0529. |
| WAC 296-17-52122 | Classification 0530. |
| WAC 296-17-52123 | Classification 0531. |
| WAC 296-17-52124 | Classification 0532. |
| WAC 296-17-52125 | Classification 0533. |
| WAC 296-17-52126 | Classification 0534. |