Employers' Guide To Workers' Compensation Insurance In Washington State Page 16
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40Chapter 4
Delinquent Accounts
Days Delinquent
Penalty
1st month overdue
5% penalty ($10 minimum) + 1% interest on the premium owed
2nd month overdue
Additional 5% penalty + 1% interest on premium owed
3rd month overdue
Additional 10% penalty + 1% interest on premium owed
4th month overdue and thereafter
Additional 1% interest on premium each month
Recordkeeping
ƒ
Gross pay.
ƒ
Deductions from earnings and the purpose
State law requires every employer to keep
of each deduction.
records that will allow Labor & Industries to
ƒ
Net pay.
compute premiums. These records must be open
for examination by L&I. Accurate, properly
ƒ
Check numbers of checks issued.
maintained records will help you manage your
In addition to payroll and time records, the
business and, in case of an audit, minimize the
following tax records also need to be maintained
time needed for an accurate review.
for at least three years:
To properly document hours reported on quarterly
ƒ
Unemployment tax returns from the
reports, maintain the following payroll and time
Employment Security Department.
records on each employee for at least three years:
ƒ
State excise tax returns from the Department
ƒ
Employee name, address and Social
of Revenue.
Security number.
ƒ
Internal Revenue Service forms and tax
ƒ
Date hired (and terminated, if applicable).
returns. For example, W-2 statements,
ƒ
Job title and type of work performed.
Form 941 (quarterly report), Form 1099
(See “Splitting Worker Hours” on Page 11.)
(miscellaneous income), Form 1065
ƒ
Type of compensation (hourly, salary,
(partnership return), Form 1040 (Schedule C).
commission, etc.).
Other records and information that may need to
ƒ
Pay period.
be referenced include:
ƒ
Actual hours worked each day.
ƒ
Check registers.
-
You must keep records of actual hours
ƒ
Canceled checks.
worked for workers paid on an hourly
ƒ
Cash disbursement journal (materials and
or piecework basis. The number of units
supplies; miscellaneous contract labor).
earned or produced for piece workers
must also be recorded.
ƒ
Corporation documents, articles of
-
Keeping records of the actual hours
incorporation, bylaws, and minutes
that outside commissioned and salaried
of meetings.
employees work is optional but a record
ƒ
Contracts, invoices, financial statements,
of days worked is required if using the
worksheets maintained for industrial
8-hour per day premium option.
insurance reports, and subcontractor
-
If an employee is assigned to more than
records, specifically the:
one risk classification, records of actual
-
Legal name.
hours worked each day must also show
-
Registration or license number.
how many hours the employee worked
-
in each class.
UBI or L&I account ID number.
12
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