Help with L&I Audit in Washington State
L&I hits small business owners with the same fines over and over. Learn to avoid these common problems - 80% of all businesses that are audited are fined in Washington State.
Workers compensation L&I reporting for office staff employees: 2 common issues that lead to finesThere are two really common issues with office staff in Washington State L&I workers compensation audits.
First, construction or other types of manufacturing companies where office staff share space with storage materials or a workshop space can face unexpected fees. L&I auditors will watch for office staff in a shared space without a wall between office employees and a workshop or a storage space, and if there is no physical wall the business owner will have to pay a higher wage rate classification for office staff.
Second, a busy small business owner might as an office staffer to purchase supplies for a business that are not strictly office supplies. it might seem like it's not a big deal to ask an employee to pick up a roofing supply or a small load of materials. And of course, most employers use Amazon for almost everything now anyway.
Employers should still keep in mind that Washington’s L&I Department will ding employers for any office staffer who is used to buy materials that are not strictly office supplies under WAC 296-17A-4904. If an auditor learns of even one trip, L&I will reclassify all of the work hours for the employee at a higher rate, and the auditor will try to exclude the employee from the office staff risk classification lower rate class entirely. The employer will have to pay the unpaid wage risk classification, plus late fees and fines for all the reclassified hours. It can be an expensive misunderstanding.
Workers compensation L&I reporting for business owners who also work on job sitesBusiness owners are normally exempt from reporting their hours as an employee. However, if L&I auditors find a business owner working alone on a job site as a laborer without any other employees present, the auditor will require that the hours spent on the job site be reported as if the business owner were a worker. It's not usually a large fine, but it can also lead to late penalties and other fees.L&I auditors check invoices for details that would indicate a business owner worked a site alone. They also ask customers, clients, and other business owners to report on each other. It's generally best to keep in mind that even for a small job, a business owner who performs work at the job site should be sure to bring at least one other employee with him to avoid a compliance check or fine.
Workers Compensation L&I reporting for construction businesses with a permanent storage spaceConstruction companies like to be able to report their lower-skill employees for work spent loading and unloading at a lower risk classification rate. However, employers without a "main" storage space/yard work are not allowed to qualify for “Permanent Yard or Shop” under WAC 296-17A-5206-79.
L&I auditors in Washington will only allow workers to be reported for this lower payment if the shop is used for storage and maintenance only. Auditors will look for a shop that combines functions in one storage space and ding the employer for a higher risk classification for all employees. L&I auditors will also watch for companies that use the "yard work" classification for workers loading and unloading at a job site, or other location. To qualify for the lower rate, the work has to be performed at a permanent storage or shop facility.