Home > DOL, payroll, workers compensation compliance, Workmens Compensation > Who is Guarding the Hen House?

Who is Guarding the Hen House?

Why are workers’ compensation and liability insurance companies running scared? Just last week I got an ear full from both industries. One said I was not qualified to work for them. The other said whatever I offer for regulatory compliance programs would result in the user getting sued.

It seems any regulatory program introduced on the cloud to control workers’ comp premiums and unemployment insurance taxes get hammered. It appears the guardian of their current application program looks at their job security first (bottom line), and then at the benefit to the client.

Let’s take a closer look. Workers compensation insurance companies sell WC policies. After the policy period, they audit the company. They charge for this ‘service’. What guarantee does the client have the audit is not skewed? Does it prove the client was cheating? How accurate are the results? What about transparency? What about reciprocity with other States if this is a national company to save their client money and risk?

Why can’t the client control the data the WC insurance company is using instead of the other way around?

The liability company is the town crier—the protector of the client’s exposure. Why can’t they see the forest though the trees or outside their legal department’s billing cycle? No one is accountable for how the client creates compliance data. A lot of law firms don’t like the fact I am trying to put them out of business.

If the client looks at his data entry procedures and has a competent program to make him ‘self-insured’, he does not have to worry about the inaccurate regulatory reporting audits from any insurance company. It’s almost like they are trying to make clients prevailing wage reporters.

In fact there are applications that just do that. They are so accurate they can negate the annual WC and liability insurance audits. Some are expensive; others not. These should reduce the liability insurance policy premiums, too.

Here is one example: PRJC Prevailing Wage Projects from TIME integrator http://bit.ly/O7DuTL It is so accurate it can place employees and hired contractors in multi-classifications working in different States. It even does the head counts for quarterly reporting. All the client has to do is Add Hours after it is set up.

PRJC is a standalone program that even produces Affidavits. When you add a job or project, this format captures all the information for the required prevailing wage record keeping and reporting requirements. It is rather comprehensive, but must be completed for any audit by a State or agency. The Prime Contractor registration and State license number should be recorded here.
The dates required are listed as Bid Due Date, Award Date, Job Start Date, and Job Completion Date. Estimate these if not completely sure, but print this document and hand write the dates as they become available. Did you know you had to record beginning and ending dates for contractors as well as their hours on the job?
Labor is broken out from the Total Contract Amount as a record keeping requirement. Enter the Pay Rate and Fringe Rate here.
Each Project has an assigned business risk classification. It may be for this specific project or a general contractor license. Add it to the Classification menu. The Scope of Work can be for any reason such as describing the Project or special instructions, but should correspond to the risk classification.
The Sales Tax box is to remind you if you need to collect this tax. This information is on the contract you signed. If not, ask for the proper forms to make sure you do not pay sales tax twice.
If the project specifies Piecework, then work hours have to be signed for on the Project Timesheet for record keeping compliance in addition to the Units such as square feet, lineal feet, or roofing squares.

Next week, we will talk about adding classifications the insurance company assigns and the breakdown to save premiums on each job.

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