WSR 97-02-026

EMERGENCY RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[Filed December 23, 1996, 11:52 a.m., effective January 1, 1997]

Date of Adoption: December 23, 1996.

Purpose: Adopt special drywall rules, classifications and base rates to implement a change in how workers' compensation premiums are charged. Industry representatives have asked that changes be implemented on an emergency basis by January 1, 1997.

Citation of Existing Rules Affected by this Order: Amending WAC 296-17-45003.

Statutory Authority for Adoption: RCW 51.04.020(1), 51.16.035, and 51.16.100.

Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.

Reasons for this Finding: Businesses have indicated unless rule changes are made and premium rates adjusted many will go out of business in early 1997.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 6, amended 1, repealed 2.

Number of Sections Adopted on the Agency's own Initiative: New 0, amended 0, repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, amended 0, repealed 0.

Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 6, amended 1, repealed 2.

Effective Date of Rule: January 1, 1997.

December 23, 1996

Mark O. Brown

Director

AMENDATORY SECTION (Amending WSR 96-12-039, filed 5/31/96, effective 7/1/96)

WAC 296-17-45003 Special construction industry rule. (1) Construction or erection operations. Each distinct type of construction or erection operation at a job site or location shall be assigned to the basic classification describing that operation provided separate payroll/time records are maintained for each such operation and which show in detail the name, rate of pay, and actual hours worked for each employee.

In the event payroll/time records are not maintained to support separate classification assignments the entire number of work hours in question shall be assigned to the highest rated classification which applies to the job site or location where the operation is being performed. The department may upon request by an employer (contractor) prior to the commencement of a contract authorize the use of a single basic classification to cover an entire project.

Selection of the basic classification will be determined by estimating the work hours for each construction operation at the site or location and calculating the premiums by each applicable classification--total estimated premiums will then be divided by the total estimated hours to produce an average rate. The basic classification assigned to the employer that carries the rate nearest to the estimated average rate will be selected provided that if the estimated average rate is equally between two classifications assigned to the employer the lower of the two rates will be selected.

Separate construction or erection classifications shall not be assigned to any operation which is within the scope of another basic classification assigned to such a job site or location. For example a carpenter employed by a concrete contractor to build foundation forms is to be assigned to a concrete construction classification and not a carpentry classification.

(2) Subcontracted work. ((The)) A general or specialty contractor as defined in RCW 18.27.010, who subcontracts work out to others must ensure that such subcontractors are properly registered ((and)) or licensed under chapter 18.27 or 19.28 RCW as applicable to avoid being held liable for industrial insurance premiums for such subcontractors (RCW 51.12.070). At the time of audit or ((within thirty days thereafter)) as agreed upon by the department, the general contractor or ((specialist)) specialty contractor as the case may be who has subcontracted work out to others must provide the department's traveling auditor((s)), agent((s)) or assistant((s)) a list containing the names of such subcontractors, their contractors registration ((of)) or license number, the expiration date of such registration or license, and their uniform business identifier or industrial insurance account number. In the event that the general contractor or specialty contractor purchases material such as but not limited to roofing material, framing lumber, concrete, or sheet rock, and subsequently supplies such materials to a subcontractor, the general contractor or specialty contractor shall also keep a record by subcontractor which they use and supply material to, the volume of material they have supplied (square feet) to the subcontractor, the subcontractor's contractor registration or license number and the expiration date of the registration or license. Failure by the general contractor or ((specialist)) specialty contractor to provide ((this)) the records required by this subsection at the time of audit or as agreed upon by the department may result in a premium assessment being made for each subcontractor used by the general contractor or ((specialist)) specialty contractor for who such required records were not kept.

(3) Debris removal. Work hours related to the removal of construction materials equipment or debris from a job site or location by employees of a general contractor or ((specialist)) specialty contractor are to be assigned to the construction classification applicable to the phase of construction work being supported by such clean up personnel. However, if clean up personnel are involved in general job site or location clean up then risk classification 0510 or 0518 will apply as applicable to the job site or location. Employees of a ((specialist)) specialty contractor engaged exclusively in debris removal services shall be assigned to risk classification 0510 or 0518 as applicable to the job site or location serviced.

(4) Scaffolding, hoists, and towers. Work hours related to the installation, maintenance or removal of scaffolding, hod hoists, distributing towers, sidewalk bridges, and elevators by employees of a general contractor or ((specialist)) specialty contractor are to be assigned to the construction classification applicable to the phase of construction being supported. However, if the scaffolding, hod hoists, distributing towers, sidewalk bridges and elevators being installed supports several phases of construction then risk classification 0510 or 0518 will apply as applicable to the jobsite or location. Employees of a ((specialist)) specialty contractor engaged exclusively in work described in this subsection shall be assigned to risk classification 0510 or 0518 as applicable to the job site or location.

(5) Preoccupancy clean up. Work hours related to preoccupancy clean up by employees of a general contractor or ((specialist)) specialty contractor are to be assigned to classification 6602 "Janitors, N.O.C." provided that the term "preoccupancy clean up" for purposes of this rule is limited in scope to dusting, washing windows, vacuuming carpets, mopping floors, and cleaning fixtures. A division of individual work hours between classification 6602 and any construction, erection, or shop classification is not allowed. Employees having duties that fall within a construction classification and who are also engaged in preoccupancy clean up are to be reported in the applicable construction classification.

(6) Shop or yard operations. Construction or erection contractors who maintain a permanent shop or yard operation may report the work hours of such employees in classification 5206, provided that this classification shall not apply to any yard or shop employee during any work shift in which the yard or shop employee has duties subject to another classification or if the classification assigned to the employer requires a separate treatment for shop operations.

(7) Construction superintendent or project manager. Applies to construction superintendents or project managers applicable to both general and specialty contractors for construction or erection projects. Construction superintendents spend some time in an office and spend the remainder of time visiting various job sites to confer with construction foreman to keep track of the progress occurring at each construction site or project location. Project managers are generally temporarily stationed at the construction site or project location and confined to a modular type of clerical office to schedule activities and arrival of supplies applicable to the job or project. Construction superintendents and project managers can be assigned classification 4900 provided such employees have no direct control over work crews and are not performing construction labor at the job site or project location. An employee performing superintendent or project manager duties and some type of construction labor or control over a work crew shall not be permitted a division of work hours between classification 4900 and any other construction classification, all work hours are to be reported in the applicable construction classification.

[Statutory Authority: RCW 51.16.035. 96-12-039, 296-17-45003, filed 5/31/96, effective 7/1/96. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 90-13-018, 296-17-45003, filed 6/8/90, effective 7/9/90; 89-24-051 (Order 89-22), 296-17-45003, filed 12/1/89, effective 1/1/90.]

NEW SECTION

WAC 296-17-45006 Special drywall industry rule. (1) Overview - Under Washington law (RCW 51.16.035), labor and industries is granted authority to adopt rules that govern how insurance rates are computed and collected. For most industries, workers' compensation insurance rates are computed and collected on the basis of hours worked by their employees. While this exposure medium (worker hours) fairly distributes the premium charge amongst employers within an industry, this basis of premium becomes unfairly discriminatory if a large segment of workers within an industry are not paid on an hourly wage basis. The drywall industry is one in which many workers are paid on the basis of material installed (piece rate), not hours worked. As a result, reported exposure (work hours) has become an estimate as employers seek to comply with hourly reporting requirements. To remedy this and provide greater fairness in the distribution of the premium charge to drywall employers the basis of premium for classifications 0522, 0523, 0524 and 0525 is changed to material installed (square feet) effective January 1, 1997.

(2) Discounted rate - In addition a classification for wallboard installation and a separate classification for wallboard taping and texturing which will be rated at manual base rates, the department will establish a discounted rate and classification for wallboard installation and a separate discounted rate for taping and texturing work. To qualify for the discounted rates an employer must meet all of the following conditions:

(a) Attend a special claims and risk management workshop;

(b) Be current with all premium reports and payments. A business in collection status will be permitted to report in the discounted classifications provided that all current premiums and reports are filed and paid on time and the establishment maintains a payment agreement for any past premiums;

(c) Provide supplemental employment reports;

(d) Authorize a voluntary release for labor and industries to secure material records from material supply dealers.

(3) Disqualification - Any business that becomes disqualified as a result of not filing premium reports on time, nonpayment of premiums, and under reporting will be disqualified from using the discounted classifications for three years (thirty-six months) from the period of last noncompliance. In the event that an owner(s) of a business which has been disqualified from using the discounted rates is involved in other construction businesses which have separate industrial insurance accounts or subaccounts, all businesses in which the owner(s) of the disqualified business has ownership interest will also be disqualified from using the discounted rates.

(4) Appeals - Any business that is involved in a dispute with the department over the status of an independent contractor, the issue as to whether an individual is a worker, or under reporting may qualify for the discounted classifications by paying the disputed amount while the issue is under dispute. If the issue is resolved in the employer's favor any moneys paid which were disputed will be refunded. Interest will not be paid on the refunded amount.

[]

NEW SECTION

WAC 296-17-52114 Classification 0522.

Wallboard installation - nondiscounted rate

This classification excludes taping and texturing which is to be reported separately in classification 0523.

[]

NEW SECTION

WAC 296-17-52115 Classification 0523.

Wallboard taping and texturing - nondiscounted rate

This classification includes incidental painting when performed by employees of an employer subject to this classification but excludes wallboard installation which is to be reported separately in classification 0522.

[]

NEW SECTION

WAC 296-17-52116 Classification 0524.

Wallboard installation - discounted rate

This classification excludes taping and texturing which is to be reported separately in classification 0525.

[]

NEW SECTION

WAC 296-17-52117 Classification 0525.

Wallboard taping and texturing - discounted rate

This classification includes incidental painting when performed by employees of an employer subject to this classification but excludes wallboard installation which is to be reported separately in classification 0524.

[]

NEW SECTION

WAC 296-17-89502 Industrial insurance accident fund, medical aid and supplemental pension rates by class of industry for nonhourly rated classifications. The base rates as set forth below are for classifications whose premium rates are based on units other than hours worked.

Base Rates Effective

January 1, 1997

Accident Medical Aid Supplemental

Class Fund Fund Pension Fund



0522 0.0242 0.0090 0.0003

0523 0.0151 0.0059 0.0003

0524 0.0160 0.0060 0.0003

0525 0.0100 0.0039 0.0003



[]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 296-17-52107 Classification 0515.

WAC 296-17-52112 Classification 0520.

Legislature Code Reviser

Register

Washington State Code Reviser's Office