Labor and Industries Tips for Summer

Now that the RETRO programs are under attack in this state, what can the Builder Associations do to serve its members? Update the accounting and human resources departments on the current audit practices of Labor and Industries. Field Auditors are penalizing most of the companies I work with by disallowing the records they keep and reclassifying all hours to the highest classification per audit policy. On average, that means a 40% increase in assessed premiums up to three years. So much for the efficiency of the RETRO programs in the state. How do I know? I used to be one of them: Tax Discovery/Fraud Prevention in King County for 6 years. To save yourself a lot of grief, take the time to read WAC 296-17 General Reporting Rules, Audit, and Recordkeeping for Washington Workers’ Compensation Insurance. Then call me because the audit manuals re-interpret the WAC rules.

Ever read the back of your LNI Quarterly Report form? Take a look at Liability for Work by Contract section. Did you know you can legally withhold final payment for work done by contract until you are assured all premiums have been paid? Make the check out to the Department AND the subcontractor so it is credited on your account in that quarter. This applies to subcontractors, too. In this economy, small subcontractors are not paying payroll or state taxes. It happened in 1987 when I was developing and building in Kitsap County, and now again in 2008. The underground economy is getting worse because of the non-documented businesses and the incompetence of L&I to monitor Prime Contractor Liability. This means premiums will rise rapidly next year.

Senate Bill 5042 may be passed, but L&I won’t honor it because it has been waiving fines historically. It is one of their bargaining chips at Reconsiderations and at the Board of Industrial Insurance Appeals.

So, do yourself a favor. Check up on your accounting and HR staff to monitor your subcontractors more closely by interpreting the rules. My company would be glad to hold continuing Q&A classes on any L&I subject of your choice at the MBA for one hour sessions to educate and prevent surprise audits. You can visit our web page for more information at www.libertybayconsultantsllc.com. Thanks you for your time

Liberty Bay Consultants, LLC
Workers Compensation Analysis
Ted Carlson, Certified Fraud Examiner
1100 Dexter Ave N, Ste 100
Seattle, WA 98109
206.273.7800