Contract Release Presentation
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1 Contract Release Presentation RCW CASC MRSC: Renton October 30, 2014 Revised October 2014 Contract Release and Workers Compensation How tax is assessed for workers compensation How completed contracts are reviewed by L&I Things that cause delays in the release Helpful information for awarding agencies 1
2 What is Contract Release RCW LIEN FOR LABOR, MATERIALS, TAXES ON PUBLIC WORKS 5% retainage withheld for collection of any wages, taxes, or vendor/supplier payments owed on the project Only required on contracts $35,000 and over May be cash or bond Contract bond is required in place of retainage for all federally funded transportation projects What is Contract Release Contract Closeout Notice of Completion is sent to L&I, ESD, and DOR L&I, ESD, and DOR can collect from the retainage for any taxes owed by the PC L&I reviews the workers compensation reporting and payment of all firms for the work completed on a public works contract 2
3 Overview of Workers Compensation Workers compensation coverage applies to most Washington employees unless excluded by law or lack of jurisdiction Employees excluded from coverage: By Law Owners, to include sole proprietors, partners, corporate officers, LLC member/managers By Jurisdiction Native American tribes, maritime (Longshore and Harbor Workers), federal employees Reciprocal States (WAC ) Oregon, Idaho, Montana, Nevada, North Dakota, Utah, Wyoming* Not all states are the same. Some reciprocal agreements exclude construction work Overview of Workers Compensation A worker is covered by law: Regardless if the employer has a workers comp account and reports to L&I or not (RCW Employments included Declaration of policy, RCW Who entitled to compensation) Employers are required to have a workers comp account (RCW ) Coverage cannot be waived (RCW ) 3
4 Overview of Workers Compensation Construction Classification Basic classes are assigned for each phase and type of construction work performed Phase of construction refers to type of work foundation, framing, interior finish carpentry, plumbing, etc. Type of construction refers to wood framed or other type of structure (concrete, steel, etc.) Request for Contract Release As of April 1, 2013 NOC s submitted without all Affidavit #s listed will be returned as incomplete 4
5 Review of Contract L&I reviews all contractors: The Prime Contractor (PC) and all subcontractors All contractors must file an Affidavit of Wages Paid once their work is complete on the project Each Affidavit must list all employees and subcontractors hired to perform work on the project May result in several sub tier layers Review of Contract We compare Affidavits with quarterly reports PWIA (Prevailing Wage Intents and Affidavits): Affidavits list dates worked and hours by occupation Workers Compensation: Quarterly reports list hours by risk classification To compare, we must understand nature of work performed on the contract Description of contract work listed on the Notice of Completion Nature of work listed on Affidavit If unclear more information is requested 5
6 Review of Contract Possible Approval Delays: Non filed Affidavits Misclassified hours (most common problem found) Not enough hours (Affidavit lists more hours than reported) Unreported workers Workers compensation Premiums owed for work completed during the contract Review of Contract Affidavit of Wages Paid: L&I Account ITEM screen in LINIIS: 6
7 Affidavit of Wages Paid: Review of Contract L&I Account ITEM screen in LINIIS: Review of Contract Resolution of primary compliance issues Two step process: The premiums reported by each contractor must be correct and the premiums must be fully paid Step 1: Assessment We start with the reported premium liability (more than $100) Step 2: Collection If a contractor owes more than $100, we pursue collection 7
8 Review of Contract Step 1: Assessment If reporting appears wrong, we must get the premium liability corrected Amended quarterly reports Assessment Notice Audit If we believe that misclassification is likely We call or the prime contractor and/or the public body to verify work performed We then discuss the reporting problem with the firm Review of Contract Once misreporting is confirmed with the contractor Amend: We allow two weeks for submission An is sent to the firm with the appropriate risk class(es) and request amended quarterly reports Assessment Notice: If not willing to amend adjustments are made and findings are issued to firm Audit referrals will be made for Unregistered firms Independent Contractor issues Multiple contracts with same issue Egregious non compliance, a full audit will be made 8
9 Review of Contract Step 2: If debt is owed, we refer to Collections If owed by subcontractor, attempt collection from the GC/hiring firm (RCW ) If owed by GC, attempt collection from retainage If unable to collect from retainage, may attempt collection from the public body or performance bond (RCW ) Secure Access Washington (SAW) Awarding agencies have special access to verify contractor s status with L&I to include: Contractor registration Citations & Violations Workers compensation status Detailed reporting history Assigned risk classes *Strike/Debarment status to be added soon 9
10 SAW Contractor Restricted Premium Status SAW Contractor Restricted Premium Status 10
11 SAW Contractor Restricted Premium Status SAW Contractor Restricted Premium Status 11
12 SAW Contractor Restricted Premium Status Improvements on the Horizon L&I is working on easing our customers burdens and is rolling out the following upgrades over the next 8 months: Strike/Debar List Online searchable database instead of PDF documents Certified Payroll System If a contractor has filed an Intent, they will have the ability to upload Certified Payroll records into our secured system Small Works Projects Online combined Intent/Affidavit form submittal by contractor Project Dashboard List all projects for your agency, to include Small Works Projects Links to Intent, Affidavit, and Certified Payroll records (if uploaded) 12
13 Questions? For more information and the latest Notice of Completion form: Review frequently asked questions: If you still have questions, contact Contract Release at: Phone: Opt #4 13
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