Wash. L&I and Labor Ready Reach Accord

October 15, 2002

The Washington Department of Labor and Industries and Tacoma-based Labor Ready have settled their dispute over the amount of money the temporary help firm owed the state in workers’ compensation premiums dating back to 1998.

Under terms of the agreement, L&I will withhold $139,000 of a refund Labor Ready was due from its participation in the department’s Retrospective Rating Program. The settlement ends the company’s appeal of an audit that found the company owed $734,000 in back premiums and penalties.

The department based that amount on computer records provided by the company. Labor Ready later provided the department with access to other records that showed in one of the quarters audited the company had dramatically overpaid what it owed the state in workers’ comp premiums. Further review of Labor Ready’s records also found that while the company had misclassified hours worked, the mistakes resulted in both underpayments and overpayments to L&I. The agency found no evidence that Labor Ready had intentionally deceived L&I for the purpose of underpaying the premiums it owed.

As a result of the Labor Ready audit, and recent audits of other temporary help companies, L&I has decided to review its classification rules governing temporary help. The agency found that some of its risk classes do not accurately reflect the jobs day laborers are hired to do. That makes it difficult for temporary help companies to accurately report hours in the proper risk classes. Working with Labor Ready and other temporary help companies, L&I hopes to have revised rules in place by Jan. 2004.

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