Industrial Insurance Recordkeeping & Reporting Workshop

Department of Labor & Industries

Dave Busch L&I Auditor (509) 324-2603

What is Industrial Insurance? Employer coverage policy for injured workers Workers are mandatorily covered unless

exempted by law Employer must report worker hours, and pay

premiums to L & I State Fund, unless self-insured

Self-insured employers post a sufficient bond to cover injury claims

Which Workers are Covered in a Governmental or Non-Profit Organization?

Paid Employees Volunteers for a private non-profit entity

(unless certified as a charitable non-profit by IRS)

Volunteers for State Agencies (medical aid only)

Non-Exempt Labor Subcontractors

Exempt Independent Contractors

RCW 51.08.180 An Independent Contractor is exempt when

providing more than their personal labor.

The contract involves the labor of multiple workers (owners and/or workers)

The essence of the contract is substantive equipment provided by the independent contractor

Continued…

Exempt Independent Contractors Alternative Test RCW 51.08.180; 51.08.195

Each of the following conditions must be satisfied:

1. Free from direction and control in performing the work.

2. Service provided is outside course of your business, away from your business, or the contractor has their own place of business.

3. Customarily engaged in their own business or qualified for IRS business deduction.

Continued…

Exempt Independent Contractors

Alternative Test RCW 51.08.180; 51.08.195

4. Be considered an independent contractor by the IRS.

5. Have an active account with Department of Revenue.

6. Maintain their own set of books and records.

7. For construction work, the contractor must also possess their own valid contractor registration or electrical license.

Record Keeping: WAC 296-17-35201

• Payroll Records Worker name and SSN Date of Hire and Date of Termination Basis of pay and hours worked (timecards)

• Subcontractors Subcontractors legal name State UBI Number Contractor registration number Expiration date

Calculating Reportable Hours Workers Paid Hourly Wages or Piecework

Wages• Actual hours worked

Salaried Workers• Actual hours worked or 160 hours per month

* The same method must be used for all salaried workers

Workers Paid on a Commission Basis• Actual hours worked or

- 160 hours per month - 8 hours per day (part-time)

* The same method must be used for all commissioned workers

• Inside commissioned workers must be reported at actual hours

Actual HoursRegular & Overtime

(does not include vacation, sick, holiday)

Alternative Methods For Calculating Reportable Hours

Schools and School Districts may report hours for employed contract personnel in one of three ways:

Salaried personnel may be reported at 160 hours per month

Each contract employee may reported at 1,440 annual hours (8 hours x 180 days), divided by 9, 10, 11, or 12 months, as stipulated by contractContinued…

Alternative Methods For Calculating Reportable Hours

Actual hours may be reported, provided that records are kept which support the reported hours. Contracted hours will be accepted as the basis for this reporting method, calculated quarterly to determine reportable hours.

Example:

Actual quarterly hours = Daily contract hours times the working days, minus leave time, plus any additional hours worked.

Employee Payroll Deduction A portion of the full premium paid by an

employer is deductible from employee wages

The amount of premium subject to employee payroll deduction, for the applicable risk classification, is applied per worker hour

The current employee payroll deduction rates applicable to your account are found in your L & I Employer Rate Notice

Risk Classifications

6103 Schools – public or private K-12, trade or vocational: Clerical, Teaching, Administrative workers

6104 Schools – public or private K-12, trade or vocational: All other employments, such as cooks, drivers, and janitors.

Worker hours may be divided between these risk classes, if detailed time records are kept. Worker duties and exposure determine risk classification of hours in these risk classes.

continued…

Risk Classifications 4906 Institutions of Higher Education – public or

private universities, colleges, and junior colleges: all employments.

www.LNI.wa.gov

Reporting Premiums (taxes)

1Q January – March due April 30

2Q April – June due July 31

3Q July – September due October 31

4Q October – December due January 31

You must file a report each quarter, even if you

have zero hours, or taxes will be estimated for you.

Filing your Quarterly Report

Summary Know Who you are required to cover

– Covered worker vs. Exempt Independent Contractor

Know How Many hours are reportable– Follow rules for calculating reportable hours

Know Which risk class applies to each reportable hour– Apply the Definitions of Your Assigned Risk Classes

(Found in WAC 296-17A, and also available from your account manager)

If You Need Help….

Account Manager (contact info on quarterly report)

L&I local office