Employee Classifications vs WC Classification Codes
The Employee Classifications and WC classification codes are entirely different. I had written about this subject late last year. I receive a few questions every time the online press starts publishing articles warning employers concerning classifications. There is a big difference in these two very similar sounding terms.
It has never been OK to purposely classify an employee as an independent contractor. We have never given the advice to classify employees as independent contractors. This method of cost savings will only backfire. If you are unsure whether a person that performs work for you is an employee or and independent contractor, please refer to this blog post on independent contractors.
Many states have clamped down on employee misclassification (contractor vs. employee) not the classification codes on your Workers Comp policies or E-Mod sheets. If you think some of your employees have been misclassified with the wrong Class Code, you can check on the codes and make a decision whether to dispute them or not.
Employee misclassification does not mean classifying an employee under a classification (class) code such as 8810 Clerical. Those are the classification codes that are assigned by the carrier, NCCI, or State Rating Bureau. Disputing a classification code has never been illegal unless it is done to delay paying a Workers Compensation premium audit bill.
There are many more complications that can arise when an employer tries to reclassify the Classification Codes. Approximately 20% of the time, I have seen it actually cost the employer more premium. That discussion turns to the ELR or D-ratio that you will see on your rating sheets.
There are many articles in this blog on how to determine whether or not your employee or employees are under the wrong classification codes and the proper dispute process.
©J&L Risk Management Inc Copyright Notice
