OAR 836-042-0060: Conditions for Division of Payroll of Individual Employees

(1) When there is an interchange of labor, the payroll of an individual employee shall be divided and allocated among the classification or classifications that may be properly assigned to the employer, provided verifiable payroll records maintained by the employer disclose a specific allocation for each such individual employee, in accordance with the standards for rebilling set forth in OAR 836-043-0190 and this rule. (2) This rule does not apply to a single employee whose duties vary within exposure areas normally anticipated by the scope of a single classification or who spends only a limited amount of time, on an infrequent or irregular basis, in a classification exposure that is not a normal job function for that employee. As used in this section, “infrequent or irregular” means that the time spent in the classification exposure is limited, is not anticipated in the normal duties of the employee and occurs only randomly. (3) When verifiable payroll records are required with respect to a single employee and the employer does not maintain them as required in this rule, the entire payroll of the employee shall be assigned to the highest rated classification exposure in accordance with the standards for rebilling set forth in OAR 836-043-0190. (4) For purposes of this rule, payroll records of an employee are verifiable if they have the following characteristics: (a) The records must establish a time basis, and the time basis must be hourly or a part thereof, daily or part thereof, weekly or part thereof, monthly or part thereof or yearly or part thereof; (b) For each salaried employee, the records must also include time records in which the salary is converted to an hourly, daily, weekly, monthly or yearly rate and then multiplied by the time spent by the employee in each classification exposure; (c) The records must include a description of duties performed by the employee, to enable the insurer to determine correct classification assignment. Records requiring additional explanation or interpretation are not considered to be verifiable; and (d) The records must be supported by original entries from other records, including but not limited to time cards, calendars, planners or daily logs prepared by the employee or the employee’s direct supervisor or manager. Estimated ratios or percentages do not comply with the requirement of this subsection and are not acceptable for verification. Verifiable records must be summarized in the insured employer’s accounting records. (5) The payroll of any individual employee used by an insurer to compute workers’ compensation insurance premium must be determined in a manner consistent with the definition of “overtime work” and “payroll” in sections (5) and (6) of OAR 836-042-0055. (6) The amendments to this rule that are effective July 27, 1995, apply to policies issued on or after July 1, 1991, except that the amendments do not apply with respect to any policy that is or has been subject to judicial review on the issue of division of payroll.