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Workers’ Compensation Misclassification

Workers’ Compensation Misclassification. Laborers’ International Union of North America Construction Department. Missouri Contractors’ Credit Premium Adjustment Program (Construction only). Illinois Workers’ Compensation Statistics. 7 th highest in wages 23 rd highest in premium rates

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Workers’ Compensation Misclassification

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  1. Workers’ CompensationMisclassification Laborers’ International Union of North America Construction Department

  2. Missouri Contractors’ Credit Premium Adjustment Program (Construction only)

  3. Illinois Workers’ Compensation Statistics • 7th highest in wages • 23rd highest in premium rates • 37th highest in injury rates Source: 2004 Annual Report

  4. The Labor Ready Story • Information was obtained from the monopolistic States of • Ohio • West Virginia • Washington

  5. Ohio • Labor Ready construction workforce misclassified as: • Retail store employees: 10.2% • Clerical office employees: 8.8%

  6. Washington • Labor Ready construction workforce misclassified as: • Office services employees: 47%

  7. West Virginia • Labor Ready construction workforce misclassified as: • Miscellaneous repair and maintenance (includes piano tuning, taxidermists, chain saw repair, lawn mower repair, firearm repair)

  8. West Virginia Piano Tuners or Construction Workers • Larry Richards dispatched by Labor Ready to 126 construction/landscaping projects • 99 times classified as a taxidermist/ piano tuner at $1.11 per $100 of payroll • Construction trades workers’ compensation rate is minimum $10 per $100 of payroll. Source: The Sunday Gazette-mail, Charleston, WV

  9. Economic Impact of Misclassification in Ohio

  10. Economic Impact of Misclassification in Washington

  11. Economic Impact of Misclassification in West Virginia *includes piano tuning, taxidermists, chain saw repair, lawn mower repair, firearm repair

  12. Misclassification Example • The Tenth Diamond Inc. and Astech Corp. are both owned by the same owner in Charleston, WV • Tenth Diamond, Inc. is classified as General Construction contractor paying $9 per $100 of payroll • Astech Corp. is classified as Asbestos Removal contractor paying $48 per 100 of payroll, but has no employees • Astech leased all employees from Tenth Diamond, Inc. • The State of WV claims that Astech/Tenth Diamond owes the state $800,000 in workers’ compensation premiums.

  13. NCCI Manual Premium Rates

  14. NCCI Manual Premium RatesEffects of Misclassification

  15. Conclusion • Workers’ Compensation Misclassification costs legitimate contractors, jobs. • States and insurance companies need more enforcement and penalties.

  16. Workers’ CompensationMisclassification Laborers’ International Union of North America Construction Department

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