A great question about workers compensation classification that I was asked earlier today!
To classify an employee properly, into a correct workers compensation classification code, written job descriptions are a great beginning point. We all know that most job duties are actually in constant flux. And it can be the fluctuations that create audit and classification problems for the employer.
Classification codes can be very specific. Think of a classification code as a narrow range or band of acceptable work processes hovering between two book end boundaries. As long as the employee’s work duties fall between those two book ends, a specific, descriptive classification code would apply. But what happens when that employee’s job duties are expanded and now all of a sudden one of their new duties takes them outside of their book end boundary?
Let’s add something. Let’s say at the beginning the employee worked full time in an office. They would come to work every day, walk into the office shut the door or stay in their cube and never venture outside until the end of the work day. Pretty easy to classify that employee as an office worker. Now let’s say the employer comes to that office employee one day and tells them that their new job duty includes what they were doing before, but now, once in a while, they would go outside, climb a scaffold and help other workers install roofing materials. How will that new job duty effect the proper classification of that employee? What if that extra duty only happens 20% of the time, or 10%…or 1%! Where is the line drawn? Or is it? These are the kind of questions we help our clients sort out.
It’s these shifts in job duties that create unknown exposure for an insurance carrier. It’s these shifts in job duites that move a previously low rate classification employee into a higher rate class code driving the workers compensation premium up for the employer. Most of the time these shifts are unknown to the employer and only discovered at audit time by the workers compensation auditor by either asking detailed questions about the job processes or by observing the activities of an employers employees.
Lesson Learned: Written job descriptions are important when it comes to classifying an employee for workers compensation purposes…But are not the only consideration.
Hope this helps you out and thanks for reading!