West Virginia Code of State Rules › Agency 85 - Workers' Compensation › Title 85 - PROCEDURAL RULE WORKERS' COMPENSATION RULES OF THE WEST VIRGINIA INSURANCE COMMISSIONER › Series 85-10 - Primary Contractor Liability › Section 85-10-5 - Avoiding Primary Contractor Liability

Current through Register Vol. XLI, No. 28, July 12, 2024
5.1. In order to avoid liability under
				subdivision 4.1.a, the primary contractor must obtain a valid, current
				certificate of good standing for the subcontractor. The certificate of good
				standing can be obtained either from the commission or from the subcontractor.
				If the certificate of good standing was issued for some earlier quarter than
				the calendar quarter immediately preceding the current quarter, then the
				certificate cannot be relied upon. The certificate of good standing is valid
				only if it is issued for the immediately preceding quarter; provided, however,
				since current premium tax payments are only due within thirty (30) days after a
				quarter ends, if a certificate of good standing is issued during the first
				month of any quarter, then it will be considered valid if issued, in whole or
				in part, for the next preceding quarter. In addition, if the proffered
				certificate of good standing is fraudulent on its face, then the primary
				contractor can become liable under subdivision 4.1.a.
5.2. In order to avoid liability under
				subdivision 4.1.b, the primary contractor must first give notice to the
				commission that the primary contractor wishes to be notified by the commission
				if the subcontractor defaults. The primary contractor must provide the
				commission with the subcontractor's and the primary contractor's correct name,
				address, and federal employers' identification number (FEIN) or its equivalent
				as well as the policy numbers that are assigned by the commission to the
				primary contractor and to the subcontractor. The primary contractor is
				encouraged to use the attached form for this purpose. While other forms of
				notice, including computer print-outs, will be accepted, such notices must
				contain, at a minimum, the information and signature requested in the form. The
				primary contractor may use additional sheets attached to the form to indicate
				other subcontractors who are working at the same job site. If the primary
				contractor's notice is accurate and complete, then, before liability can be
				imposed by the commission under the provisions of W. Va. Code §
									23-2-1d,
				the commission must notify the primary contractor of the subcontractor's
				default in order to provide an opportunity for the primary contractor to take
				corrective action. The liability then begins as specified in subdivision 5.3.b.
				Notice of default by the commission to the primary contractor is complete upon
				placing the notice in the first class United States mail, postage prepaid, and
				addressed to the primary contractor at the address furnished to the commission
				by the primary contractor.
5.3.
				Determination of the beginning date of the primary contractor's liability under
				subdivision 4.1.b shall be accomplished as follows.
5.3.a. Before any employer attains default
				status, these actions must either occur or fail to occur as indicated. In the
				usual course for a usual employer account, payment is due by the last day of
				the month following the quarter for which payment is being made. For instance,
				for the first fiscal calendar quarter (July through September), the payment is
				due on or before October 31st. If payment is not made by that date, the
				commission is obligated to issue a delinquency notice to the employer informing
				it, among other things, that it is now delinquent and that payment must be made
				on or before the last day of the third month following the quarter for which
				payment is due. In the above example, payment would be due on or before
				December 31st. Failure to make payment by that date places the employer in
				default if the delinquency notice by the commission was timely made. The
				delinquency notice must be issued within sixty (60) days of the end of the
				quarter for which payment is due. In the above example, the delinquency notice
				must be issued on or before November 30th. These requirements are contained in
				W. Va. Code §
										23-2-5(b).
5.3.b. For purposes of primary contractor
				liability, in the example set forth in subdivision 5.3.a, the notice of default
				by the commission to the primary contractor cannot be issued until sometime in
				January. This is the beginning of the second quarter after the quarter for
				which payment is due. The subcontractor does not become default until December
				31st and, thus, no notice of default could be issued before that date.
				According to W. Va. Code §
										23-2-1d(b)(2),
				unless the primary contractor takes corrective action, the primary contractor's
				liability would then begin with the first day of the third quarter following
				the end of the quarter for which payment is due; that is, for the quarter
				beginning on April 1st. The primary contractor's liability for its contractor's
				payments begins with payments due in that third quarter. Payments that were due
				for the July through September quarter, payments that were due for the October
				through December quarter, and payments that were due for the January through
				March quarter are not the liability of the primary contractor under subdivision
				4.1.b.
5.3.c. It sometimes occurs,
				for a variety of reasons, that the delinquency notice to the employer that is
				described in subdivision 5.3.a is not timely made within sixty (60) days.
				Should that happen regarding a subcontractor affected by W. Va. Code §
										23-4-1d,
				then the time period described in subdivision 5.3.b may be affected. W. Va.
				Code §
										23-2-5(b),
				is understood to require at least a thirty (30) day notice to the employer
				before it shall be in default status. If in the example set forth in
				subdivisions 5.3.a and 5.3.b, the delinquency notice was not issued until
				December 14th (i.e., the seventy-fifth day), then the payment in order to avoid
				default would not be due until January 13th (thirty days from the issuance of
				the late delinquency notice). Default would begin on January 14th. Even later
				issuance of the delinquency notice would move the default date back
				accordingly. In the event a notice of default is issued less than thirty (30)
				days before the end of the quarter, liability will not be imposed upon the
				primary contractor until the first day after the end of the next quarter.
				Accordingly, in the example set forth in subdivisions 5.3.a and 5.3.b, if the
				notice is issued between March 2nd and March 31st, the primary contractor's
				liability would not begin until July 1st.
5.3.d. If an employer is required to file its
				payroll report and pay its premium taxes on a basis other than quarterly, then
				the time periods for curing delinquencies and the primary contractor's
				notification of the subcontractor's default shall be accordingly
				adjusted.