Home > Workmens Compensation > Classification Compliance Reviews–why bother?

Classification Compliance Reviews–why bother?

That’s what most small businesses think when you mention the subject. Today, the local Department of Labor workers’ compensation fund AND the Federal Department of Labor have been coordinating reviews of business classification reports.

The most thought bookkeepers, accountants, and payroll companies give to reviewing your classifications assigned to your business is: none. That is your responsibility by State and Federal law. You tell the accounting folks who worked, how many hours, and how much to pay, and they send in the quarterly reports. Not that simple anymore.

Classifications have to be reviewed every year to keep up with the changes in the reporting requirements. The assessed amounts by the government can put you instantly out of business. Most small businesses learn by word-of-mouth how to keep the books. Unfortunately, bookkeepers and accountants are not trained on employer workers’ compensation compliance issues; only employee human resource state and federal payroll compliance issues.

Recently, the fifth largest payroll company in America was asking what the difference between employer and employee compliance reporting was. They did not have a clue.

Allegations of worker misclassification in the construction industry by the Labor Department focus on holding large builders accountable for classification violations by their subcontractors. In the transportation industry, the Uniform Transportation Commission and Department of Transportation dictate how small carriers can operate which conflict with local workers’ compensation compliance.

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