Presentation on theme: "REPORTING IN THE DRYWALL INDUSTRY Presented by the Department of Labor and Industries."— Presentation transcript:
REPORTING IN THE DRYWALL INDUSTRY Presented by the Department of Labor and Industries
In this presentation, you will learn about special reporting requirements for the drywall industry and how to qualify for discounted rates. In addition, you must attend the “Controlling Your Claims Costs” Workshop. Contact 360-902-5586 There are additional requirements as well which will be addressed during this on-line workshop.
Let’s begin. In most industries premiums are based on hours worked. However in the Drywall Industry, premiums are based on the square footage of material processed. Therefore, we will be using square footage as a measure for calculating and reporting. Next, lets get familiar with some drywall activities and the associated risk class.
We will be examining and reporting on the following main drywall activities to complete the quarterly report and the owner subcontractor report Stocking Hanging/scrapping Taping Texturing and priming We will now review these drywall activities and the correct risk class they belong in. Knowing the corresponding risk class for each activity will assist us in completing the Quarterly Report form later in this workshop.
The delivery and stocking of drywall to the jobsite is reported on an hourly basis in class 1101 (delivery), whether the work is performed by the drywall supplier or by the drywall contractor
Drywall installation includes scrapping when performed by the installation contractor. When the scrapping is not performed by the installation contractor, the scrapping is reported in either risk class 0510 (for wood framed structures) or risk class 0518 (for non-wood framed structures). Activities associated with 0510 and 0518 are reported on a hourly basis.
Taping includes texturing, priming, and painting when performed by the taping contractor. When the texturing, priming and painting are not performed by the taping contractor, the texturing, priming and painting are reported in risk class 0521 (interior painting). Activities associated with 0521 are reported on an hourly basis
Additionally, when a contractor installs metal studs, as well as the drywall, the time spent installing metal studs is reported in risk class 0516 (building repair). Also, when a contractor performs drywall work as part of general building repair, it is reportable in risk class 0516 but only if the project includes carpentry, drywall and at least one additional type of repair work (plumbing, cabinetry, etc.)
If a contractor performs drywall work as part of a mobile home setup (taping and texturing seams at the marriage line, repairing cracks, etc.) the work is reported in risk class 0517 (mobile home setup) by the hour worked.
And lastly, if a firm does site clean-up of construction debris and is not a construction contractor, then site clean-up is reported in class 4305-22 for debris removal.
We have reviewed some drywall activities. Now let’s discuss how to keep records. You will use these records later, when filling out the owner/subcontractor report. You are required to keep the following records for each project: A record of drywall purchased. A record of work performed by you the owner. A record of work performed by employees. And lastly, a record of work performed by subcontractors.
Here is some helpful information you will need to know about keeping records. The square footage of wallboard purchased for each job, project, site, or location shall equal the square footage reported in each drywall risk class, unless… The owner did the entire project by himself and does not have owner coverage.
As you keep a record of work performed by subcontractors, there should not be more than one sub contractor for each activity. On any particular job, a legitimate subcontractor can do all or part of the work. Then the owner will report this work on the owner subcontractor report.
Here are two easy ways to report. If the owner has elected optional coverage and has done all the drywall work on the project OR the employees have done all the drywall work on the project.
Other types of reporting are when the owner works on the project with employees and does not have coverage for himself. The owner will need to keep track of his hours report.
The square footage you purchased is on the summary report sand invoices provided by your material supplier. If your firm does not purchase the board, request a copy of the invoice from the contractor who supplied the board. The square footage for the job must include material you purchased and material provided by others.
For the following drywall activities, do not deduct footage from the amount of material purchased: Scrapping (debris) Taping or texturing not done on the base layer in a double board or triple board application Taping or texturing not done in some rooms or portions of the building
When a contractor performs drywall repair or warranty work on jobs his firm installed: If material is purchased, report additional footage in the installation and taping risk classes If no material is purchased, the work is already included in the footage previously reported. When a contractor performs repair or warranty work on jobs his firm did not install: If material is purchased, report the footage in the installation and taping risk classes. If no material is purchased, report a minimum of 32 square feet per patch in the taping risk class.
If the owner works with his workers, his owner footage may be deducted from the amount of material purchased for the job. To do this the owner must submit the Owner/Subcontractor Report with the Quarterly Report. Subcontractor footage may be deducted from the amount of material purchased for the job if the Owner/Subcontractor Report is submitted with the Quarterly Report as well. (Material scrapped or primed/textured by subcontractor cannot be deducted.)
Now it is time to practice preparing the Owner/Sub-contractor Report. You will need the following information to do this: The job names and locations The square footage used for each job The owner’s hours, by job and class The employees’ hours, by job and class The subcontractor footage, by job and by class
This formula is what you will be using to determine owner and worker exposure for drywall activities. First add the owner’s hours to the workers hours to get the total hours. To compute the % of owner deduction, divide the owner hours by the total hours that you just got. That’s your first computation. Use that % and multiply it by the total square footage of the job. This equals your owner footage. Now you’re going to take the total footage of the job and subtract the owner footage. This will give you the footage you need to report on the quarterly report form. Are you ready to do an example?
In this example, the owner hours are 28 hours and the worker’s hours are 67 hours. Adding them together, gives us a total of 95 hours. Next divide the 28 owner hours by the 95 total hours. This result is 29% which is the percentage the owner can deduct. Then we take that 29% and multiply it by the 12,000 square feet of the job. That number is 3,480, the owner’s square footage. Lastly, subtract 3,480 from the 12,000 total footage of the job. That will give us 8,520 which is the worker footage. The 8,520 work footage would then be placed in the corresponding exposure box on the owner/subcontractor form. For example, the install/scrapping box. We have now completed the install/scrapping portion of the form. To complete the tape, prime/texture portion of the form, you will use the same formula.
You have seen how to complete a report on a job where we just have owners and workers. Now let’s see how to report a project with a sub-contractor.
If you hired a subcontractor to perform some or all of your project, you must complete that portion of the owner/subcontractor report. Let’s use an example to show how to fill out the form. Say you’ve hired Hammer & Nail to install 14,472 square feet of drywall. Write the subcontractor’s name in the “Subcontractor Exposure” box and the UBI number. Fill in the “Square Footage Worked by Subcontractor” field with 14,472 square feet. Check the appropriate drywall activity worked by the subcontractor.
If the essence of the contract with your subcontractor is personal labor only (the sub has no workers), then review the publication called A GUIDE TO HIRING INDEPENDENT CONTRACTORS in Washington state. You will then be able to determine if your subcontractor is exempt. As a contractor, you know that you must pay workers’ compensation premiums for all of your own employees. But what happens if your subcontractor fails to pay premiums for his or her employees?
Under Washington law (RCW 51.12.070), you the – general contractor – could be held responsible. After completing this online workshop you can find additional information on our website under Trades and Licensing, hiring a contractor or under the tab at the top of this online workshop called “References”.
In the next section we will address payroll deductions. You can use payroll deductions to help offset the cost of premiums. Payroll deductions in the drywall industry differ from most other industries. Typically, the employee payroll deduction rate is multiplied by the number of hours worked to determine the payroll deduction amount. However, in the drywall industry, the employee payroll deduction rate is based on square footage installed instead of hours worked. To determine the payroll deduction amount, multiply the payroll deduction rate by the square footage installed by the employee.
If a worker is paid on an hourly basis, the employer needs to convert the hours worked into square footage installed. To do this, multiply the worker hours by 125 square feet per hour. This gives you an estimate of the square footage installed by the worker in this pay period. When we multiply John’s hours, 40, by 125, we arrive at 5000 sq ft. And when we multiply Paul’s hours worked, 30, by 125 we get 3750 sq ft. Notice how they total 8750 sq ft. That is the total amount of square footage worked for the job. Be aware that the square footage payroll deductions must not exceed the total square footage reported for the job.
Let’s look at some reporting options. Say you’ve purchased 10,000 square feet of drywall in a quarter for a job, but the job was not completed during that same quarter. You have three reporting options. But remember, when you pick an option, you must use that option each quarter. Report the square footage of drywall purchased during the quarter.Report the square footage on each completed project. Report square footage as completed during the quarter (whether or not the job/project was finished)
Now, let’s talk about the quarterly report. You will need to pay close attention to the following information: The quarter ending date and due date. These dates are for the quarter you are reporting. Gross Payroll entered in column 4. Square footage in hours/units in column 5 for drywall classes. Hours need to be entered for all other classes in column 5 Be careful to enter amounts on the correct lines If you feel you need an additional class call your account manager to discuss. Make sure you sign the report. By law the owner/sub contractor report must be submitted with the quarterly report if you have taken a deduction for the owner or subcontractor. Do not forget to complete and submit accurate quarterly reports with premiums on time.
In addition to the quarterly report, you must fill out the supplemental report to qualify for the discount. Let’s, look at the supplemental quarterly report. On the supplemental quarterly report you must list all employees and provide the following information: Employee name and social security number Total wages paid during quarter The basis for how they are paid Rate per hour or unit What type of work they did. Refer to the legend at bottom of report. Remember to include all workers on this report even if they did not do drywall installation or finishing.
Records for any subcontractor hired must contain the following information and be kept for 3 years. Subcontractor Information Subcontractor’s Legal Name Contractor’s License or Registration Number and Expiration Date UBI Number (or L & I Account ID) Record of Materials You Supplied to a Subcontractor Square Footage of Material Supplied Project Name or Location Date Material Given to Sub or Delivered to Job Site Completion Date of Subcontracted Work
The following information is for keeping and maintaining payroll and employment records. Name & Social Security number for each worker, along with beginning date and termination date. Pay basis upon which wages are paid. Number of units completed for each worker paid on a piecework basis. Applicable risk classification(s). Summary time record showing the calendar day or days of the week work was performed & the actual number of hours worked each work day. Workers’ gross pay, sums withheld from earnings with the purpose of each sum withheld, & net pay.
With a few risk exceptions, we will assign separate classifications for each phase of construction you are involved in. Please contact your account manager for these risk classifications.
In conclusion, let’s briefly look at the subjects we have gone over today: Drywall Reporting Requirements Qualifying for Lower Rates Drywall Activities and Risk Classes Required Records Owner & Subcontractor Deductions The Owner/Subcontractor Report Payroll Deductions The Quarterly Report and Supplemental Report Keeping and Maintaining Records
REMINDER: You are almost halfway there to qualifying for the discounted drywall rates. Call 360-902-5586 to sign up for the next workshop for controlling your claims costs.
Can I be disqualified from using the discounted rates? Yes!
You can be disqualified from using the discounted rates for three years if you: Do not file all reports, including supplemental reports, when due; Do not pay premiums on time; Underreport the amount of premium due or fail to maintain the requirements for qualifying for the discounted rates. Disqualification takes effect when a criterion for disqualification exists. The following is an example of disqualification from discounted rate: A field audit in 2002 reveals that the drywall installation firm underreported the amount of premium due in the second quarter of 2001. The firm will be disqualified from the discounted rates beginning with the second quarter of 2001, and the premiums it owed for that quarter and subsequent quarters for three years will be calculated using the non-discounted rates.
If the drywall underwriter learns that your business has failed to meet the conditions as required in this rule, your business will need to comply to retain using the discounted classifications. If your business does not comply promptly, the drywall underwriter may refer your business for an audit. If, as a result of an audit, the department determines your business has not complied with the conditions in this rule, your business will be disqualified from using the discounted classifications for three years (thirty-six months) from the period of last noncompliance.
Thank you for your time. If you have any questions, please refer to the Drywall Underwriters listed under ‘Contact’