Washington Administrative Code › Title 296 - Labor and Industries, Department of › Chapter 296-17 - General reporting rules, audit and recordkeeping, rates and rating system for Washington workers' compensation insurance › Section 296-17-31013 - Construction

Current through Register Vol. 24-14, July 15, 2024
(1)
What is
			 the classification approach for construction contractors?
We classify contractors by phase of construction.
Phase
				of construction
refers to the type of construction work or the parts of
				a construction contract we classify and rate separately. This means contractors
				performing multiple types of construction generally have more than one basic
				classification.
Example 1:
A contract for building a kitchen may
				include cabinet installation, tiling, and painting. These three pieces of the
				contract are considered separate phases of construction since each of the types
				of work are often performed by a separate specialty contractor. A contractor
				performing multiple phases reports employees' hours by each phase of
				construction.
Example 2:
A concrete contractor agrees to build a
				new concrete driveway. As part of this job, the contractor has employees
				assemble wood forms to pour the concrete into. Since assembling wood forms for
				concrete construction is not normally subcontracted out to specialty
				contractors, we consider this work included in the concrete work
				classification. The concrete contractor reports the assembly of the wood forms
				in the classification for the concrete work.
Example 3:
A plumbing contractor must remove a
				section of wall, or tear up some flooring to repair a pipe. The minor tear out
				and repair is considered part of the pipe repair phase of construction as long
				as the work is performed by the plumber's own employees. The contractor reports
				this work with the plumbing work. However, if the plumber contracts out the
				floor or wall repair, the subcontractor reports in the classification(s) that
				best describe the work performed.
Note:
If we have assigned multiple classifications
				to your construction business, take special care in maintaining the records
				required in the auditing and recordkeeping section (
WAC
				296-17-35201 Recordkeeping and
				retention
). If you fail to keep the required records, we assign all
				worker hours for which the records were not maintained to the highest rated
				classification applicable to your business or the highest rated classification
				a worker was exposed to.
(2)
Who do the construction rules apply
			 to?
If we assign one or more of the following classifications to
				your business, this rule applies to you: 0101, 0103, 0104, 0105, 0106, 0107,
				0108, 0112, 0201, 0202, 0210, 0212, 0214, 0217, 0219, 0301, 0302, 0303, 0306,
				0307, 0403, 0502, 0504, 0507, 0508, 0509, 0510, 0511, 0512, 0513, 0514, 0516,
				0517, 0518, 0519, 0521, 0540, 0541, 0550, 0551, 0601, 0602, 0603, 0607, 0608,
				and 0701.
(3)
To
			 simplify recordkeeping and reporting requirements, can I have a single
			 classification assigned to my business to cover a specific construction
			 project?
Yes, you can request a single classification to cover all
				phases of work for an entire project, by contacting your account manager. A
				separate request is required for each project where you want a single
				classification for reporting.
(4)
How does the department determine
			 the single classification for a project?
We prorate based on the information you provide. You must give
				us a description of the project with an estimate of the total number of hours
				expected to be worked in each 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 1,000 work hours to
				perform all the plumbing work and 500 work hours to do the steel erection
				work.
With this information we will estimate the premiums by
				classification:
We determine that the plumbing work is covered under
				classification 0306 and the steel erection work is covered under classification
				0518.
Assume for this example that classification 0306 has an hourly
				premium rate of $2.50 and classification 0518 has an hourly premium rate of
				$3.50. We estimate the total premium on this job to be $4,250; (1,000 hours x
				$2.50 = $2,500) + (500 hours x $3.50 = $1,750).
Note: Rates in this table are for this
						example only.
Plumbing (0306)
Steel erection (0518)
Hours
1,000
500
Risk classification
0306
0518
Rate (assume for this example)
$2.50/hour
$3.50/hour
Estimated premium
1,000 x $2.50 or $2,500
500 x $3.50 or $1,750
Total estimated premium
$2,500 + $1,750 = $4,250
We then develop an average hourly rate for the project, by
				taking the estimated premium of $4,250 and dividing this number by the 1,500
				hours estimated. This provides an average hourly rate of $2.83.
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:
* The average hourly rate for this project is $2.83.
* The rate for the plumbing classification (0306) is $2.50 per
				hour.
* The rate for steel erection is $3.50 per hour.
We would assign classification 0306 as the single
				classification applicable to this project, and send you a written notice which
				will specify the basic classification and premium rate that will apply to this
				project.
(5)
If I
			 request and receive a single classification for my construction project, am I
			 required to use the classification for reporting all of my hours?
No, but let your account manager know you decided against using
				the single classification and you will report the work by phase of
				construction. This will avoid any potential confusion if you are
				audited.
(6)
I have
			 no employees because I either perform the work myself or I subcontract it out.
			 Do I need a workers' compensation account with the department of labor and
			 industries?
If you do not hire workers who are covered by Washington's
				workers' compensation laws, you are not required to have a workers'
				compensation account with the department of labor and industries (L&I).
				However, Washington state laws (
RCW
				 51.08.180
and
51.08.181
)
				interpret some workers, even when paid by a federal 1099 form, as covered
				workers who you must report to L&I and pay workers' compensation premium
				for, along with any employees you report to the IRS as employees.
If you do not pay premium for someone you hire as an
				contractor, and it is later determined he, or she, is a covered worker, you
				will be responsible for paying the premium you owe with interest, as well as
				any assessed penalties; these can include claim costs associated with an
				injury.
You can also be held responsible for premiums owed to L&I
				if you subcontract work to another contractor and they fail to pay premiums on
				their own workers (
RCW 51.12.-070
).
To avoid these unexpected costs, it is in your best interest to
				make sure all of your subcontractors:
* Meet state law as independent contractors;
RCW
				 51.08.180
and
51.08.181
.
* If they hire workers, are registered contractors in good
				standing by verifying their status at www.lni.wa.gov.
For additional information about subcontractors, see
WAC
				296-17-31004
, visit our
				web site, or call us at 360-902-4817.
(7)
What records must I keep on the
			 subcontractors I use?
For each subcontractor, you are required to keep record of
				the:
* Subcontractor's legal name.
* Contractor registration number and expiration date.
* UBI number (or L&I 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.
* Completion date of contracted work.
Failure to maintain these records may result in the
				subcontractor being considered a covered worker who you must report.
Note:
See
WAC
				296-17-35201
for
				recordkeeping requirements for workers and contractors under mandatory coverage
				and reporting requirements.
(8)
What classification should I use to
			 report construction site cleanup by my employees?
For construction contractors, construction site cleanup and
				debris removal are included in the phase of construction describing the work.
				You should report the cleanup of construction debris in the same classification
				that applies to the work responsible for the debris.
Example:
A roofing contractor with an employee
				picking up roofing debris off the ground reports the cleanup work in the
				roofing classification (0507).
However, if the debris is not specific to any one phase of
				construction and applies to a construction site's work overall, report the
				general site cleanup in the classification applicable to the type of building
				you are constructing:
* Nonwood buildings - Site cleanup is included in
				classification 0518.
* Wood frame buildings - Site cleanup is included in
				classification 0510.
If neither of these scenarios applies, please talk to your
				account manager to determine the correct classification.
(9)
My business is construction site
			 cleanup. I am not a construction contractor, my employees do no construction
			 work, and they only pick up construction debris. What classification do I
			 report site cleanup in?
If your employees are collecting and/or removing any type of
				debris (household junk, yard or garden waste, furniture, appliances,
				construction or building materials, waste resulting from smoke or water damage,
				etc.), whether it results from the construction work or not, you report in
				classification 4305-22.
(10)
How is the final preoccupancy
			 cleaning at a construction site classified?
We consider
preoccupancy cleaning
as limited to
				the final cleaning preparation after the conclusion of a construction project.
				Activities include washing paint and overspray from windows; vacuuming carpets;
				washing floors and fixtures; dusting woodwork, doors and cabinets; and other
				general cleaning tasks. Preoccupancy cleaning as described here is reported in
				classification 6602 only if both of the following conditions apply:
* The workers perform no other construction related work, such
				as construction debris cleanup.
* All of the construction work is completed and all
				construction equipment and debris have been removed prior to the
				cleaning.
Note:
If you are not a construction contractor and
				you take contracts to clean up construction debris and contracts for
				preoccupancy cleaning, and you maintain accurate accounting records for both
				activities, you may divide hours between risk classifications 4305-22, Debris
				removal, and 6602-03, Janitorial cleaning services. (See subsection (9) of this
				section.)
(11)
In
			 what construction classification should I report setting up of scaffolding,
			 hoists, cranes, towers or elevators at a construction site?
Report the setup, operation, and disassembling in the same
				classification that applies to the work responsible for the scaffolding,
				hoists, cranes, towers or elevators.
Example:
A roofing contractor with employees
				setting up scaffolding at the construction site reports these activities in the
				roofing classification (0507).
If the setup at the construction site is not specific to a
				single phase of construction, the setup work is reported in the classification
				applicable to the type of building:
* Nonwood buildings - Setup is reported in classification
				0518
* Wood frame buildings - Setup is reported in classification
				0510
If neither of these scenarios applies, please talk to your
				account manager to determine the correct classification.
Note:
If a helicopter service assists in hoisting
				work, the flight crew is reported in classification 6803. (See
WAC
				296-17-31018(4)
.)
Note:
Some work performed by a mobile crane at a
				construction site can be reported in classification 3506-02, Mobile crane and
				hoisting services. (See
WAC
				296-17A-3506
.)
Statutory Authority:
				  RCW
				   51.16.035,
				  51.16.100, 2008 c 70, and
				  Title
				  51 RCW. 08-15-132, §
				  296-17-31013, filed 7/22/08, effective 10/1/08. Statutory Authority: RCW
				  51.06.035,
				  
											51.08.010,
				  51.04.020. 07-12-045, §
				  296-17-31013, filed 5/31/07, effective 7/1/07. Statutory Authority:
				  RCW
				   51.16.035,
				  51.16.100. 06-12-075, §
				  296-17-31013, filed 6/6/06, effective 1/1/07; 05-12-031, § 296-17-31013,
				  filed 5/24/05, effective 7/1/05. Statutory Authority: 2004 c 243,
				  RCW
				   51.04.020 and
				  51.16.035. 04-20-023, §
				  296-17-31013, filed 9/28/04, effective 11/1/04. Statutory Authority:
				  RCW
				   51.04.020 and
				  51.16.035. 04-18-025, §
				  296-17-31013, filed 8/24/04, effective 10/1/04; 04-13-017, § 296-17-31013,
				  filed 6/4/04, effective 7/5/04. Statutory Authority:
				  RCW
				   51.16.035. 01-23-059, § 296-17-31013,
				  filed 11/20/01, effective 1/1/02; 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.