Can Premium Audits = Manufacturing Rate For An Office Employee?
When can premium audits generate manufacturing rates? Two weeks ago, I posted on how two computer programmers could be rated as manufacturing employees at the year-end premium audit. Unfortunately, I did not complete the next posting on the subject. I will go ahead and do that now.
Quite often, companies will make the honest mistake of having clerical employees end up in their highest rated classification. My prior example was of two computer programmers that had to cross through the manufacturing area in a plant to go on break. An insurance carrier in California during one of their premium audits charged the company the full rate for the manufacturing classification code and not the computer programmer code.
Was this proper? If the employees were on break and not performing their job duties, can the break time actually be counted as work time for the premium audit?
No, it was not as the employees only went through the manufacturing area while on break. In CA, as other states, this would not cause the employees to be rated as manufacturing. The key here is they were on break at the time. If the employees had to cross through the manufacturing area for a job duty, then the premium auditor would have been correct to assign the manufacturing class code.
We see this situation occur on premium audits due to miscommunication between the auditor and the employer contact during the time of audit. How can this situation be avoided? I will post on that next time.
The California employer decided to dispute two of their premium audits due to the employee’s work centered being a programmer approximately 99.9% of the time. The results of that dispute are still pending. The word “break” makes the audit dispute valid to a point.
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