Labor & Employment Law Articles

Workers' Compensation: Are Your Workers Classified Properly?

Workers' compensation rates are determined by classifying employees and charging rates that are dependent on the comparative risks inherent in the job classifications. Thus, a company pays higher premiums for a construction worker or a window washer than it would for an accountant or secretary. However, not all such distinctions are so clear cut. A recent case in our office involved the contention of the State Insurance Fund that employees who were classified as receptionists were actually security guards. Needless to say, there was a great disparity between the rates for the two classifications. Fortunately, we were able to convince the Fund that these employees were actually receptionists. Since that time, we have been involved with numerous other audits conducted by the State Insurance Fund and other workers' compensation insurance carriers who have sought what they claimed to be substantial underpayments arising from misclassifying employees to less risky job classifications. In a few situations, the employer discovered that it was due money because its employees had been misclassified.

We recommend that employers conduct their own self-audit to determine if their employees are classified properly prior to the conduct of any audit by the State Insurance Fund or other insurance carrier. We can assist your company in conducting such a self-audit