WSR 14-12-052 PERMANENT RULES DEPARTMENT OF LABOR AND INDUSTRIES [Filed May 30, 2014, 9:02 a.m., effective June 30, 2014] Effective Date of Rule: Thirty-one days after filing.
Purpose: This agency classifies businesses according to their nature. The former rules stated that employers could have more than one basic risk classification if they qualified, but they must use different employees in each business. The adopted rule making allows employers to use the same employees in more than one basic risk classification as long as work records are kept and the rules allow. The rule making also removes the need to identify the governing class, and simplifies reporting by including all instructions for this situation in one rule.
Citation of Existing Rules Affected by this Order: Repealing WAC 296-17-310171; and amending WAC 296-17-31017.
Statutory Authority for Adoption: RCW 51.04.020 and 51.16.035.
Adopted under notice filed as WSR 14-03-111 on January 21, 2014.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 1.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 1, Repealed 1.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: May 30, 2014.
Joel Sacks
Director
AMENDATORY SECTION (Amending WSR 13-11-128, filed 5/21/13, effective 7/1/13)
WAC 296-17-31017 Multiple classifications.
(1) Can I have more than one basic classification assigned to my account?
((Yes, we will assign other classifications to your business when the assignment of another basic classification is required or permitted by the description(s) of the employer's other classification(s).
Whenever you have more than one classification assigned to your account, you must keep detailed records of the actual time spent by each employee in each classification. An explanation of payroll records you must keep can be found under WAC 296-17-35201. Use of percentages, averages or estimates is not permitted. If you do not have original time card or time book entries to support your reporting, all worker hours in question will be assigned to the highest rated classification applicable to your business operations.
(2) Are there other circumstances when I can have more than one basic classification assigned to my account?
Yes, under certain circumstances we will assign more than one basic classification to your account. These circumstances include:
• The employer is operating a secondary business which includes operations that we do not consider a normal part of that employer's principal business in Washington, or
• The employer has multiple retail store locations.
In these instances we will assign additional basic classifications only if all of the following conditions are met:
• The employer maintains separate payroll records for each business,
• Different employees work in each business,
• Each business is separated by structural partitions if they share a common business location,
• Each business can exist independently of the other, and
• The classification language of the principal business does not prohibit the assignment of the secondary classification.
If all of the above five conditions are not met, then the operations of the secondary business will be reported in the highest rated classification that applies to the employer.
(3) What do you mean by the term "principal business?"
The principal business is represented by the basic classification assigned to an employer which produces the greatest amount of exposure. The principal business does not include standard exception or general exclusion classifications or operations.
(4) If my business is assigned a basic classification and a standard exception classification and I have an employee who works in both classifications, can I divide their exposure (hours) between the two classifications on my quarterly report?
No, you cannot divide an employee's exposure (work hours) between a basic classification and standard exception classification. An explanation of "standard exception classification" is discussed in WAC 296-17-31018(2). If an employee performs work covered by a basic classification and a standard exception classification, all of their exposure (hours) must be reported in the basic classification applicable to your business. You cannot report the exposure (hours) of any employee in a standard exception classification if they perform duties covered by a basic classification assigned to your business. Refer to WAC 296-17-31018 for a list and explanation of the "exception classifications."
(5) I have more than one standard exception classification assigned to my business. One of my employees works in more than one of the standard exception classifications. Can I divide their exposure (hours) between two or more standard exception classifications on my quarterly report?
No, you cannot divide an employee's work hours between two standard exception classifications. You must report all exposure (work hours) in the highest rated standard exception classification applicable to the work being performed.))
Yes, sometimes we will give you more than one basic classification because:
• The basic classification that describes your business specifies certain duties that must be reported separately.
• You have employees performing work described in the general exclusions, WAC 296-17-31018(4).
• You are a contractor with workers performing more than one phase of construction, as described in WAC 296-17-31013.
• You operate a farm that raises more than one type of crop or animal, as described in WAC 296-17-31014.
We also may assign more than one basic classification when a single classification does not describe all of your business operations because you have multiple enterprises.
A multiple enterprise is when you:
• Operate a secondary business with operations we do not normally consider related to your other business operations; or
• Have multiple retail stores.
When all four of the following conditions apply, we will add a basic classification(s) for a multiple enterprise:
• You maintain accurate payroll records that clearly distinguish the work performed for each business.
• Each business is physically separated and distinct.
• Each business can operate independently of any others. If one business closes, any others are able to continue on their own.
• The classifications are permitted to be assigned together by classification descriptions and general reporting rules.
If any of these conditions do not apply, we will assign your firm the classification(s) that identifies:
• Your principal business (this is the business that has the greatest number of hours); and
• Any secondary business operations that are higher rated than your principal business.
(2) My business is assigned a basic classification and a standard exception classification. I have an employee who works in both classifications. Can I divide this employee's hours (or alternative units) between the two classifications on my quarterly report?
Normally you cannot report employees in a standard exception classification if they also perform duties covered by a basic classification. If any of their work is covered by a basic classification, then all of their hours (or alternative reporting units) must be reported in the basic classification.
The only time you are permitted to divide a worker's hours between a standard exception classification and a basic classification is when the basic classification is assigned to you because it is a general exclusion under WAC 296-17-31018(4).
(3) Can I divide an employee's hours between two standard exception classifications on my quarterly report?
No, you cannot divide employees' hours between two standard exception classifications. You must report all of their hours in the highest rated standard exception classification applicable to their work.
(4) I have more than one basic classification assigned to my business and I have employees who work in more than one of these classifications. Can I divide their hours between these basic classifications on my quarterly report?
Yes, you may divide an employee's hours between basic classifications when:
• The classification descriptions allow a division of hours; and
• You maintain records on each employee and the department can determine from those records the hours worked in each classification.
If the classification descriptions do not allow a division of hours, or if you do not maintain adequate records, you must report the workers' hours in the highest rated risk classification applicable to your business, unless your records show that a worker did not work in that classification.
For the following examples, suppose an employer has the classifications and rates shown below:
Example 1: If the employer does not keep records of which classifications an employee worked in, all of the employee's hours must be reported in classification 0507.
Example 2: If the employer's records show the employee worked only in classifications 0510 and 0513, but no time records were kept, all of the employee's hours must be reported in classification 0510.
Example 3: If the employer's records show the hours the employee worked in classification 0510 and the hours the employee worked in 0513, the employer may report the employee's hours in both classifications.
(5) I have employees with duties that support more than one basic classification, but it is not possible to distinguish their hours between classifications. How do I report these workers' hours?
Sometimes employers are unable to divide a worker's hours between two or more classifications because the work simultaneously supports more than one basic classification. When this occurs, you must report the work in the highest rated classification that the work supports.
Example 1: You operate both a motel with classification 4905, and a restaurant with classification 3905. You have a laundry facility that cleans the linens for both the restaurant and for the motel and you choose not to distinguish schedules for washing the linens separately. If you do not maintain work or payroll records, you must report your employees in the higher premium rate classification.
If classification 3905 is higher than classification 4905, you need to report the laundry operations in classification 3905.
If classification 4905 is higher than classification 3905, you need to report the laundry operations in classification 4905.
Example 2: You have a floor covering store and also offers installation services to your customers. Your store operations are under classification 6309 and your employees performing the installation service are under classification 0502.
Since delivery is included in both your classifications, when your workers deliver floor covering to one of your own job sites, their drive time must be reported in whichever of your classifications is higher premium rated.
Example 3: You are a construction contractor and pay your workers for driving to and from the construction sites. Some of these workers work in more than one construction classification. You can keep records of when they work in each classification and report their hours at the job site accordingly, but all of their drive time on a given day must be reported in the highest rated construction classification they worked in the same day.
(6) How can I find the rates for the classifications assigned to my account?
Each of your classifications has a new rate assigned to it yearly. Your rates are on your annual rate notice and your quarterly report, or you may obtain your rates by contacting your account manager.
REPEALER
The following section of the Washington Administrative Code is repealed:
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