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Dec. 14, 2004

Early check on premium rate could save contractors money later

TUMWATER — The Department of Labor & Industries (L&I) is reminding contractors they should verify the correct hourly workers’ compensation premium rate before they bid on a construction contract. Failure to do so could cost them money if it is found that they reported in a wrong risk class that had a lower hourly rate. Depending on the circumstances, the loss could be substantial.

Construction contractors all have different premium rates, depending on the type of work they do and the number of workplace injury claims they’ve had. As a result, contractors could wind up underbidding contracts if they use the wrong rates in determining what a job will cost.

To avoid unexpected premiums, contractors should contact their account manager at the phone number listed on their quarterly report, or call L&I’s Employer Services Division at 360-902-4817. There, they can confirm whether or not they are using the correct risk class in calculating the bid, verify what their hourly premium rate will be and, if necessary, add a risk classification to their industrial insurance account.

This precaution is more important than ever because, as part if its anti-fraud effort, L&I has dramatically increased the number of audits it does in the construction industry. In the fiscal year that ended June 30, the agency identified and collected $4.5 million in premiums that had previously gone unreported in the construction industry. The anti-fraud campaign was started at the urging of employers, who complained that they were at a competitive disadvantage when bidding against contractors who weren’t registered and weren’t properly paying the industrial insurance premiums they owed.

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For media information: Robert T. Nelson, L&I Public Affairs, 360-902-6043 or nelq235@LNI.wa.gov or visit the L&I News and Media Center at www.LNI.wa.gov/News.

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