from "Safety News", State Compensation Insurance Fund
State Fund would like to remind construction contractors of
the significance of proper payroll recordkeeping. When you report payroll
to your workers’ compensation carrier,
most trades are assigned two workers’ compensation classifications—also
known as dual wage classifications. These classifications allow construction industry employers to pay lower premium rates for workers whose hourly wages are above certain thresholds. Qualifying for the high- wage, low-rate classes requires accurate and verifiable recordkeeping. The classification used must correspond to the hourly wage level of your employees in each of the affected trades.
Employers in the construction industry are required to maintain timecards that record the start and stop times for their employees. The Worker’s Compensation Insurance Rating Bureau (WCIRB) requires employers wanting to take advantage of lower-rated classifications to make
available the physical timecards to workers’ compensation insurance provider auditors. Auditors must verify the hourly wage levels of all construction employees at the time of the audit.
Keep detailed records that clearly show the:
- Dates of employment
- Start and stop times
- Hours worked
- Job duties
- Wage rates
If you are paying your employees by piecework, you must keep a record of start and stop times and the hours worked for each employee to qualify for the lower-rated classifications. If you do not keep a time log of the start and stop times and hours worked, the auditor will assign all payrolls into the higher-rated classification as the WCIRB permits. Since these wage rates
are subject to verification at the time of audit through a valid source, maintaining a verifiable record is required.
Accurate records and correct payroll reporting can help reduce the possibility of unexpected premium owed at the end of the policy period. Remember, your ability to utilize the lower-rated construction classifications will depend on your ability to produce original timecards with start and stop times for all construction employees at the time of the payroll audit. Failure
to provide these records could result in increased premium costs.
Maintaining good records will help you take advantage of lower-rated classifications based on both dividing payroll between the various construction trades classifications, as well as determining which classifications should be applied due to the hourly wages you pay your employees.
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