Located in Wisconsin, this auto repair business also does retail parts sales and auto dismantling. The company employs seven people.
The Rating Board showed up unannounced to undertake a classification audit. The audit resulted in a re-classification of the business, moving the company into a higher risk bracket and potentially increasing its annual premiums.
CWCAs reviewed the new findings by the Rating Board and discovered that the company was reclassified from auto repair to auto dismantling, based on the Rating Board’s determination that the greatest revenue was derived from that line of service. Through the due diligence of the CWCAs, it was found that the Rating Board was incorrect. Classification should not be based on revenue from a specific job, but from payroll allocations. In this case the job descriptions that represented the greatest payroll allocation were repairs and parts sales.
A letter was drafted to the Rating Board with all pertinent employee payroll figures, job descriptions and revenue figures. The correspondence stated that the company should not be reclassified at the higher rate because the finding was based erroneously on revenue. It further argued that payroll allocation should be the deciding criteria in the classification ruling. Using the correct criteria would mean that the classification should remain repairs and sales and not be changed to auto-dismantling.
The Rating Board agreed with the appeal letter, and reversed its ruling returning to the lower rated job classification. As a result, the company saved thousands of dollars in potential premium increases over the next two to three years had the ruling stood.
Source: Institute of WorkComp Professionals