Workers’ Compensation
Record Keeping and Reporting Guides
Packet Contents:
;
Record Keeping
;
Computing Worker Hours
;
Standard Exception Classications
;
Excluded Employments
;
Corporate Ofcers
;
Limited Liability Companies (LLC)
;
Independent Contractor
;
If Family Members Work for You
For a Washington Business License
Application: www.bls.dor.wa.gov
For reporting information, go to Labor
& Industries: www.Lni.wa.gov
Report industrial insurance employer
fraud: www.Lni.wa.gov/Fraud,
1-888-811-5974
33
Record Keeping and Reporting Guides
Workers’ Compensation
State law requires every employer to keep records that will
allow the department to compute premiums. These records
must be open for examination by the department. Failure
to maintain these records will result in penalties subject to
WAC 296-17-35201 ($500 per worker). To properly document
hours reported on quarterly reports, maintain the
following records for three full calendar years following
the year in which employment occurred.
Employment Records
For each worker:
Name
SSN
Beginning and Ending
Date of Employment
Basis of Pay
Units Earned
or Produced for
Pieceworkers
Summary of Hours
Worked Each Quarter
Worker’s Total
Gross Pay
Worker’s Specic
Withholding
(with purpose of
withholding)
Worker’s Net Pay
Risk Class for each
Employee
Time Record showing Days Worked and Hours
Worked each Day (unless WAC rules provide an
alternative to actual hours). Daily and Summary Time
Records must show the Applicable Occupation and
Risk Class.
Financial Records
Check Register and
Canceled Checks
Bank Statements
Cash Disbursements
Journal
Employers who pay their workers by check are
required to keep and preserve all check registers and
bank statements. Employers who pay their workers by
cash are required to keep and preserve records of these
cash transactions which provide a detailed record of
wages paid to each worker.
Tax Records
Employment Security
Reports
Department of Revenue
Reports
Internal Revenue
Return, Forms
W-2
941 (Quarterly Report)
1099 (Miscellaneous
Income)
Annual Tax Return
Other Records to Maintain
Purchase Records for
Materials and Supplies
Miscellaneous Contract
Labor
Corporate Documents
Articles of Incorporation
Bylaws, Minutes of
Meetings
LLC Documents
Certicate of Formation
Contracts
Invoices
Financial Statements
Worksheets maintained
for L&I Reports
Construction Contractors
Contractors may be liable for premiums on their
subcontractors if the subcontractors provide essentially
labor only or if the subcontractor is controlled. If you have
subcontractors that you consider exempt from coverage
you must keep the following records:
Subcontractor’s legal name
Contractor Registration Number AND expiration date
UBI Number (or L&I Account ID Number)
AND
If you supply materials to the subcontractor, you must
also keep records on:
Type and amount of material supplied
Project name or location
Date material was supplied
Completion date of contracted work
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
PUBLICATION F212-222-000 [03-2022]
44
Date Start Time End Time Total Hours Type of Work Job Number
4/21/2014 8:00 am 4:30 pm 8 Interior Painting 306 Calvary
4/22/2014 8:00 am 4:30 pm 8 Interior Painting 865 Capital
4/23/2014 8:00 am 4:30 pm 8 Exterior Painting 421 Elm St.
4/24/2014 8:00 am 4:30 pm 8 Interior Painting 865 Capital
4/25/2014 8:00 am 4:30 pm 8 Exterior Painting 421 Elm St.
40
Total Hours
WEEKLY TOTALS:
24 Interior Painting
16 Exterior Painting
Your Company Name
Your Company Slogan
Address
City, State ZIP
123-456-7890 Fax 123-456-7890
TIME SHEET
Employee Name: John Doe Title: Crew Lead
Employee Number: 12345 Status: In Training
Department: Painting Supervisor: Dave Smith
Employee Signature:
John Doe
Date: 4/25/2014
Supervisor Signature: Dave Smith Date: 4/25/2014
55
Computing Worker Hours
Workers’ Compensation Record Keeping and Reporting Guides
Hourly Employees
Actual hours.
Includes overtime.
Excludes holiday, vacation, and sick pay.
Salaried Employees, Owners with
Optional Coverage
Employees who receive a xed wage each pay period.
160 hours per month = 480 hours/quarter
or
Actual hours.
The same method must be used for all salaried workers.
Commissioned Personnel
Persons whose compensation is based upon
a percentage of the amount received for the
commodity or service rendered.
Different rules apply to Outside Commissioned
employees (who work primarily away from your
premises) and Inside Commissioned employees
(who work primarily at your premises).
You may report either actual or assumed hours
for Outside Commissioned employees. If you
choose to report assumed hours, report:
-
8 hours per day for part time,
-
OR 160 hours per month, for full time.
You must choose one method (actual hours
or assumed hours) and report all Outside
Commissioned employees using that method.
You cannot report some using actual hours and
others using assumed hours.
You can only report actual hours for Inside
Commissioned employees.
Piecework
Actual hours
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
The above methods of reporting do not exempt
the employer from Federal Labor Standards Act
requirements and overtime computation.
PUBLICATION F212-222-000 [03-2022]
77
Standard Exception Classifications
Workers’ Compensation Record Keeping and Reporting Guides
WAC 296-17-31018: Employments referred to as
standard exceptions are to be separately rated unless these
employments are specically included within the scope of
the basic classication.
A division of a single employee’s worker hours
SHALL NOT be permitted between two standard
exception classications or between a standard
exception classication and a basic business
classication.
Clerical Ofce – Class 4904 employees are dened
as those employees whose duties are conned to
keeping the books or records of the employer, in or
about the employer’s premises. Clerical workers may
make bank deposits, pick up and deliver mail at the
post ofce, or purchase ofce supplies as long if the
primary work duties are clerical in nature. They
may not handle product. Clerical workers may not
handle, show, demonstrate, or deliver any product
sold by the employer. Draftsmen will be considered
to be clerical ofce employees when their duties are
limited to ofce work only and they are not exposed
to the operative hazard of the business.
Sales Personnel, Outside – Class 6301 and 6303 are
dened as those employees engaged in such duties
away from the premises of the employer who sell,
solicit or service accounts of customers for the
employer. Provided that no employee duties include
handling merchandise such as delivery, stocking or
display set up. Messengers will be considered sales
employees provided the messenger is used solely by
the employer in connection with the administration
of the employer’s business operation and not a
general delivery service.
Optional Coverage is available for:
Corporate Ofcers – Class 7101 are dened as those
employees of a corporation elected and empowered in
accordance with the articles of incorporation or bylaws
as ofcers who are also shareholders and may serve
on the board of directors and whose duties are limited
to administrative, clerical ofce and outside sales
activities for the corporation. (See RCW 51.12.020 (8)).
Classication 7101 will only be assigned if the
classication describing the nature of the business
does not already include administrative/clerical
duties. Any corporate ofcer who is exposed to any
operative hazard of the business or directly supervises
workers who are exposed to any operative hazard of
the business may not report in class 7101. A corporate
ofcer engaged exclusively in outside sales shall be
assigned classication 6303. In no event however
will a corporate ofcer be assigned the clerical ofce
classication 4904.
Members/Managers of LLC are reported in class
7100 if their duties are limited to administrative,
clerical or outside sales duties. Classication 7100 will
only be assigned if the classication describing the
business does not already include administrative/
clerical duties. Any Member/Manager of an LLC
who is exposed to the operative hazard or directly
supervising workers exposed to the operative hazard
of the business, may not report in class 7100. If
engaged exclusively in outside sales, they are reported
in class 6303.
If any worker described above is exposed to any operative
hazard of the business, their entire worker hours shall be
assigned to the highest rated classication of work to which
they are exposed.
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
PUBLICATION F212-222-000 [03-2022]
99
Excluded Employments
Workers’ Compensation Record Keeping and Reporting Guides
RCW 51.12.020
Sole Proprietors and Partners
1
Sole proprietors and partners are excluded.
Corporate Officers
1
Excluded when meeting the criteria indicated
on the ‘Corporate Ofcer’ quick reference card.
(See RCW 51.12.020(8)).
Limited Liability Company Members and/or
Managers
1
Excluded from coverage if the company is qualied
under: Sect. 5 for Sole Proprietors and Partners OR
Sect. 8 for Corporate Ofcers.
For an LLC with members only and no
managers, each member may elect coverage,
individually.
For an LLC with managers, the LLC may elect
coverage for all exempt managers working
for the rm and receiving earnings (actual or
anticipated).
Beauticians, Barbers and Manicurists
1
Services performed by a booth renter or lessee when
leasing from a salon or shop.
Domestic Servant(s)
1
Domestic servants working in the private residence
of an individual are excluded unless the individual
employs two, or more, full time. If two servants are
regularly working at least 40 hours each per week,
then all domestic servants are covered.
Gardening, Maintenance and Repairs
2
Work done at the employer’s personal residence
is excluded.
Maintenance: Keep in proper condition.
Repair: Restore to sound condition after damage.
Construction of Private Residence
2
Workers hired by an individual to build a private
residence for the individual are excluded from
coverage if the residence is not built for resale, rental
or business use. Once the owner occupies the home,
work on the residence that exceeds maintenance or
repair is mandatorily covered.
Minor Children on Family Farm
Any child under eighteen years of age employed by
his or her parent or parents in agricultural activities
on the family farm.
Newspaper Carriers
Excluded in they sell or distribute newspapers
on the street, to ofces, to businesses, or from
house to house. Also exempt is any freelance news
correspondent or “stringer” who, using his or her
own equipment, chooses to submit material for
publication for free or for a fee when the material is
published.
Insurance Producer (dened in RCW 48.17.010)
or surplus line broker (licensed under chapter
48.15. RCW).
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
PUBLICATION F212-222-000 [03-2022]
1010
Services For Aid or Sustenance
2
Excluded when the aid is from a religious or
charitable (non-prot) organization.
Minor Children on Family Farm
2
Children under 18 years of age are excluded if
working on the family owned farm.
Children between ages 18 and 21 are
mandatorily covered unless an application for
exclusion is led by the parents.
At age 21, coverage is mandatory.
The Application for Exclusion/Inclusion of
Mandatory Coverage form is available at your local
Labor and Industries ofce. (The family farm may be
a sole proprietorship, partnership or corporation so
long as the controlling interest is with the family.)
Jockeys – Racing
2
Excluded only when participating in a race or when
preparing horses for race meets licensed with the
Washington Horse Racing Commission.
Musicians and Entertainers
2
Excluded under the following circumstances:
1. Under contract of service for a specic
engagement.
2. No other duties assigned.
3. Not regularly and continuously employed by the
establishment.
Newspaper Carriers
2
Excluded if they sell papers house-to-house or
on the street.
Insurance Agents, Brokers and Solicitors
2
Endnotes
1 Application for Optional Coverage, form F213-042-000, may be filed
with the department to elect coverage for partners, sole proprietors or
corporate officers. Each partner or owner who wants coverage must
sign for coverage. However, corporations who elect coverage must
cover all corporate officers who perform a service for the corporation
and receive earnings (actual or anticipated).
2 Optional coverage may be obtained for these employments by filing
an Application for Optional Coverage form, F213-112-000 with the
department.
1111
Corporate Officers
Workers’ Compensation Record Keeping and Reporting Guides
To be exempt from industrial insurance
coverage a corporate officer must meet the
following criteria.
Non-public Corporation
—
Does not meet the
definition of RCW 23B.01.400.
May exempt up to eight (8) ofcers, even if they
perform manual labor as long as they meet the
following criteria:
1. Shareholder in the corporation.
2. Exercise substantial control in daily management
of the corporation
—
on a daily basis, makes
management decisions over a function or functions
that have some effect on the entire corporation.
Family Corporation (all officers must be related)
May exempt all corporate ofcers if every ofcer is
related by blood within the third degree or marriage
and is a bona de ofcer. They are not required to be
shareholders or directors to be exempt from coverage.
1st Degree = Parent/child
2nd Degree = Grandchild/brother/sister/
grandparent
3rd Degree = Great grandchild/nephew/niece/
uncle/aunt/great grandparent
Related by marriage means legally married within the
laws of Washington State.
Public Corporation
A public corporation normally makes shares of stock
available on a stock exchange. See RCW 23B.01.400 for
a complete denition of public corporation.
1. Bona de ofcer.
Performing the duties of such ofce as dened in
the corporate articles and bylaws.
2. Voluntarily elected or appointed.
Elected or appointed of his/her own free will and
knowledge.
3. Bona de director and shareholder.
Carrying out the duties of the director as dened
in the corporate articles and bylaws and owning
corporate stock in his/her own name.
4. Exercise substantial control in the daily
management of the corporation.
On a daily basis, make management decisions over
a function or functions which have some effect on
the entire corporation.
5. Primary responsibility not to include manual labor.
Corporate ofcers are not exempt if their primary
duties include functions other than administration
or professional occupations. Those ofcers
performing blue-collar type duties are not exempt.
Status of Corporate Officers will be determined by
the following:
Title 23B RCW (Corporate Laws)
A corporation’s own bylaws and articles
Substance over form
Those holding honorary titles are not exempt
and are reportable if they provide a paid service
as a worker.
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
PUBLICATION F212-222-000 [03-2022]
1313
Limited Liability Companies (LLC)
Workers’ Compensation Record Keeping and Reporting Guides
Members or Managers
To be exempt from industrial insurance coverage
an LLC member or manager must meet the
following rules.
For an LLC with Members Only and No Managers
Members are excluded from coverage if they
meet the requirements of RCW 51.12.020(5) for
sole proprietors and partners.
Generally, all members are exempt, unless
management rights are restricted to certain
members. If management of the company
is restricted to certain members, only those
members are exempt from coverage.
For an LLC with Managers
If all managers are related within the third
degree of kin,
The managers who are also members in the LLC
are exempt from coverage.
The family relations may be by either blood
or marriage.
If any of the managers are not related to
one another,
Only the managers who are also members
qualify for the exemption.
To be exempt, the manager must exercise
substantial control in the daily management of
the company. On a daily basis, the manager must
make management decisions over a function
or functions that have some effect on the
entire company.
No more than eight managers may be
considered exempt.
Note: Coverage may be elected on form F213-042-000:
For an LLC with members only and no
managers, each member may elect coverage,
individually.
For an LLC with managers, the LLC may elect
coverage for all exempt managers working
for the rm and receiving earnings (actual or
anticipated).
This card is intended as a Quick Reference Guide for industrial insurance
(workers’ compensation) purposes. We make every effort to ensure that it is
correct. When using this card, please understand it is not intended to replace
Department of Labor & Industries’ or insured’s policies, procedures, RCWs
or WACs in their entirety. These exclusions apply to industrial insurance
(workers’ compensation) only and are not applicable to other programs,
such as the Division of Occupational Safety and Health or Employment
Standards, also managed by the Department of Labor & Industries.
PUBLICATION F212-222-000 [03-2022]
1515
Independent Contractors
Workers’ Compensation Record Keeping and Reporting Guides
Industrial Insurance: RCWs 51.08.180,
51.08.181 and 51.08.195
RCW 51.08.180 states that an independent contractor
who provides essentially personal labor is covered
by industrial insurance. If the individual provides
the labor of others (has their own employees) they
are exempt. If the individual provides equipment
(beyond ordinary hand tools), and they are not
controlled in the use of the equipment, they
are exempt. In these instances the individual is
providing more than their personal labor.
If the individual does not provide their own
employees or equipment in performing the contract,
they may still be exempt if they meet the six-part test
in RCW 51.08.195. The independent contractor must
meet ALL six parts of the test in order to be exempt.
For the construction trades, there are seven parts to
the test (RCW 51.08.181). Independent contractors in
the construction trades must meet ALL seven parts
of the test in order to be exempt.
1. Be free from your direction and control.
2. Need to pass one of the following three subtests:
Perform a service which is outside the course of
your business or,
Perform the service away from all your business
locations, or,
Be responsible, both under the contract and
in fact, for the costs of the principal place of
business from which the service is performed.
3. Need to pass one of the following two subtests:
Be customarily engaged in their own business
to provide the services which are of the same
nature as those performed under the contract or,
Provide a principal place of business that
qualies for an IRS business deduction; the
place must be used regularly and exclusively for
business purposes.
4. Be required under IRS rules to le a business tax
return with the IRS.
5. Have an active account and an active unied
business identier number (UBI) with the
Department of Revenue and an active and valid
account with any other state agency as required.
6. Maintain their own set of books and records
showing business income and expenses.
Additional requirement for the construction trades:
7. The individual must have a valid contractor
registration pursuant to chapter 18.27 RCW or an
electrical contractor license pursuant to chapter
19.28 RCW.
If you have any questions, check with your local
L&I eld ofce to verify if your subcontractor
would be considered your covered worker for
industrial insurance purposes, or online at:
www.Lni.wa.gov/IndependentContractor
This card is intended as a Quick Reference Guide for industrial insurance (workers’
compensation) purposes. We make every effort to ensure that it is correct. When
using this card, please understand it is not intended to replace Department of Labor
& Industries’ or insured’s policies, procedures, RCWs or WACs in their entirety.
PUBLICATION F214-012-000 [03-2022]
1717
If family members work for you,
know your obligations
If you have relatives, including children, who work
for you, they must be treated as employees with
the same rights as any other paid worker in the
state of Washington. This applies to anyone you
expect to show up for work at a certain time. There
are exceptions for those working on a farm owned
by their family. See details on the family farm
application at www.Lni.wa.gov/go/F213-113-000.
As an employer of family members,
youarerequired to:
Pay them at least minimum wage. Find
Washington State’s current minimum wage at
www.Lni.wa.gov/MinWage.
Provide workers’ compensation insurance.
Workers’ compensation insurance pays benets
to injured workers and also protects employers
from potentially enormous claim costs and
liability from work-related injuries and illnesses.
Provide a paid 10-minute break for every four
hours of work.
Provide an unpaid 30-minute meal break for
every ve hours of work.
Make sure they work safely.
Follow the state’s child labor laws.
Ensure that the work they do is appropriate
totheir age.
What else you should know:
These requirements do not include family members
who share ownership of a business, or children
under the age of 18 who work on a farm owned by
their parents.
The minimum age for employment is 14 years.
Need help or assistance?
Information is available at www.Lni.wa.gov. For
additional help, call your local Department of Labor
& Industries ofce or one of these numbers:
For questions on wages, breaks, or child labor laws:
www.Lni.wa.gov/workers-rights
1-866-219-7321
For questions about workers’ compensation
insurance: www.Lni.wa.gov/Claims
360-902-4817
For questions about workplace safety and health
requirements: www.Lni.wa.gov/safety-health
1-800-423-7233
Spanish and English are spoken at all these numbers.
For those who speak Chinese, Korean, Russian,
Thai, Vietnamese, or other languages, interpretative
services are available.
Upon request, foreign language support and formats for persons
with disabilities are available. Call 1-800-547-8367. TDD users,
call 711. L&I is an equal opportunity employer.
PUBLICATION F101-077-909 [01-2017]
Upon request, foreign language support and formats for
persons with disabilities are available. Call 1-800-547-8367.
TDD users, call 711. L&I is an equal opportunity employer.
PUBLICATION F212-222-000 [03-2022]