Does Innovative Employee Solutions (IES) as the employer of record provide workers compensation insurance?

Peter Limone, CPA, CGMA – President and CFO

The short answer is yes, in all 50 states. In addition IES also provides Defense Base Act insurance for government and department of defense contractors working overseas.

In reality, providing workers compensation insurance is only the tip of the iceberg, IES provides a workers compensation program which includes insurance.

Safety is a core value at IES. Managing workers compensation starts before the employee is hired. Light industrial prospects or clients will complete a site evaluation questionnaire detailing the environment and conditions the contingent employee will be exposed to. The completed safety questionnaire will be evaluated for any issues and if any are found, a discussion with the client will typically resolve any safety issues.

Workers compensation classification is important. Each worker’s position must be coded properly in order for the cost of worker’s compensation to be appropriate. Factors that change the classification and cost include job duties, environment, and the North American Industry Classification System (NAICS) assigned to the client. As a way of example, insurance cost for a clerical position in California may cost as little as 0.56% of payroll, whereas a riskier position such as a janitorial services contractor may cost up to 15% of payroll. WC premiums will be less for companies that have a strong safety program and fewer injuries, resulting in lower markups.

Innovative Employee Solutions provides a single point of contact for its workers compensation program. The workers compensation program manager works with the client to communicate the safety program. If an injury occurs, the client is responsible for reporting the injury in a timely manner to the workers compensation manager in order to process the claim efficiently and effectively. Getting the employee back to health and back to work is a priority for all of us.

OSHA has specific guidelines to follow for contingent workforce when a client/employer of record relationship exists. Specifically:

• The employer of record must evaluate the host employer’s worksite. IES accomplishes this by requesting a safety evaluation questionnaire be completed by the client. The questionnaire reviews the task assignments and job hazards in order to identify and eliminate potential safety and health hazards and identify necessary training and protections for each worker.
• The employer of record provides educational material to its contingent employees about basic safety principles and the hazards commonly faced by its temporary workers in order to discover hazards and work with the host employer to eliminate or lessen identified workplace hazards before an injury or illness occurs.
• Occupational Safety and Health Responsibilities must be assigned and defined the Scope of Work in the Contract. The extent of the responsibilities the staffing agency and the host employer have will vary depending on the workplace conditions and should be described in their agreement
• Employer knowledge of workplace injuries and investigation of these injuries are vital to preventing future injuries from occurring. Information about injuries should flow between the host employer and the employer of record. If a temporary worker is injured and the host employer knows about it, the employer of record should be informed promptly, so the employer of record knows about the hazards facing its workers. Equally, if an employer of record learns of an injury, it should inform the host employer promptly so that future injuries might be prevented, and the case is recorded appropriately. The parties should therefore also discuss a procedure to share injury and illness information between the employers, ideally specifying that procedure contractually. Tip - Injury and Illness Recordkeeping Requirements: Both the host employer and the employer of record should track and where possible, investigate the cause of workplace injuries. However, for statistical purposes, OSHA requires that injury and illness records (often called OSHA Injury and Illness Logs) be kept by the employer who is providing day-to-day supervision, i.e., controlling the means and manner of the temporary employees’ work (the host employer, generally).

Interested in more information? Visit www.osha.gov

An experienced employer of record can help you avoid expensive issues that may arise with your contract or contingent workers. Reach out to the friendly experts at Innovative Employee Solutions for further assistance today!