By Ted Schwartz, An OSHA Outreach Trainer, HR Ideas, LLC
I recently spoke with a small Plumbing Contractor who asked me why he had received a $600.00 “bill” from Cal-OSHA when he did not have any report of injury or citations. After a brief discussion, I found out that his Workers’ Compensation “Modification Rating” just recently exceeded 125%. That is the key to his problem.
Not only did his Workers’ Compensation insurance increase significantly, but he was also hit with the “Cal-OSHA Targeted Inspection and Consultation Fund” fee. The ”Cal-OSHA Targeted Inspection and Consultation Fund”, codified under California Labor Code Section 62.7 (and approved by the legislature) is a “special account” where the proceeds go to Cal-OSHA for their “targeted inspection program and consultation”. The “assessments” usually go out around March-April of EACH year.
The assessment is assessed to ALL EMPLOYERS who have a “Modification Rating” in excess of 125% and is based upon a company’s annual payroll as follows (and is codified under California Labor Code Section 62.9):
If you do not pay the amount within 30 days of the mailing date, you are assessed a 25% penalty. Collections of unpaid assessments are referred to the Franchise Tax Board, so ultimately, they will get their money.
As mentioned, the money is earmarked for the “Cal-OSHA Targeted Inspection and Consultation Fund, which means that the money can not only be used by the Cal-OSHA Consultation Service, but also targeted inspections.
Also, if your “Modification Rating” exceeds 125%, you are on Cal-OSHA Targeted Inspection’s “list” and can expect either an announced or unannounced inspection from Cal OSHA including a visit from the “Economic and Employment Enforcement Coalition (EEEC)” which will also include personnel from EDD, Department of Labor, State Contractors Licensing Board, and other applicable state/federal agencies, so be prepared!
Ted Schwartz is a Human Resources Specialist and OSHA Outreach Trainer for HR Ideas, LLC. He can be reached at 925.922.1603 ©, 925.556-4404 (t), 925-415-5160 (f), 2262 Camino Ramon, Suite 103, San Ramon CA 94583. Or visit his website at www.hrideas.com.
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