We’re aware of several Washington employers who have recently received audit notices from the Washington State Department of Labor & Industries (L&I) to review their risk classifications. Let’s run through what this means, what you should do if you are audited, and how to stay prepared in case you’re next on the list.
Why is L&I auditing our company?
The goal is to ensure workers are properly classified based on their actual work. In this system, the riskier the work, the higher the hourly premium rate. Because even small changes can significantly increase premium costs, preparation is the key to limiting that exposure.
What should we do if we receive a notice?
If you participate in Vigilant’s workers’ compensation services, your first step is to notify your Vigilant claims manager, safety professional, or Vigilant Law Group attorney. Together, we can guide you through the process and ensure you aren’t oversharing information. Note: If you aren’t participating in one of Vigilant’s programs be sure to reach out to your workers’ comp partner or legal counsel to alert them.
Next, you should audit your own data by:
- Pulling prior filings, payroll data and job descriptions to see what was previously reported.
- Identifying employees grouped under a single code whose actual duties differ.
- Spotting common errors, such as reporting office employees working at a manufacturing facility under higher-risk codes.
How are classifications determined?
L&I looks at day-to-day duties, not job titles. Review your roles with a critical eye, focusing on what employees actually do. This is an opportunity to distinguish between office and hands-on work or administrative and operational tasks. Even small differences in duties can justify different classifications. Updating job descriptions before an audit allows you to use clear language; vague descriptions often lead auditors to default to higher-risk (and more expensive) classifications.
How should we handle the audit process?
During the audit, be thoughtful and direct. Answer questions honestly but avoid speculating, over-explaining, or providing documentation that wasn’t explicitly requested. L&I wants to ensure you pay the right premiums, and your goal should be the same.
How can we stay prepared for the future?
You can maintain confidence in your rates by:
- Strengthening job descriptions regularly.
- Training HR and managers on classification basics.
- Conducting periodic internal reviews of your classifications.
These steps will help give you confidence that you’re paying appropriate premiums based on the type of work being performed and will help ensure you’re ready when you receive an L&I audit notice.
You don’t have to face an L&I audit alone. Washington manufacturing and agribusiness employers trust Vigilant for audit support—and everything in between for workplace safety and workers’ comp. Curious how we can support your company? Reach out today!
