Labor Services (Temp or Staffing) Agency
Revised Code (ORC) 4123.01 and Ohio
Administrative Code (OAC) 4123-17-05, Appendix A;
Abrams, Chief of Employer Services
policies and procedures regarding Temporary Labor Services that predate the
effective date of this policy.
Policy Effective Date: February 2007, Revised: March 12, 2008
I. Policy Purpose
Labor Services (Temp Agencies) are classified using the same operational classifications
of their client customers. BWC will ensure that Temp Agencies applying for
workers’ compensation and conducting business in the State of Ohio do so in
accordance with the applicable laws and rules.
policy applies to Bureau of Workers’ Compensation (BWC) Policy
Processing/Underwriting Department, NCCI Classification unit, Payroll Auditors,
Field Services, Call Center, Temp agencies, public employer taxing districts
(PEC) private employers (PA) and their authorized representatives.
Staffing Agency: An employer
in the business of hiring individuals for the purpose of using their services
for a short-term period to fill vacant position(s) at the customer (employer’s)
location. They may also place employees on a temporary basis with the intent
of becoming full time employees with the customer.
Industry Group: Used in calculating a company's premium
rate and in some program participation, this is the main business pursuit of an
individual employer (ex. Construction, Transportation, etc.). By assigning one
of ten Industry Groups, BWC can ensure employers rates are determined by using
the claims cost and payroll of all similar companies.
A sole proprietor, partnership, association, limited liability company or
corporation that enters into an agreement with one or more client employers for
the purpose of co-employing all or part of the client employer’s workforce at
the client employer’s work site. PEO does not include a temporary service
application for coverage.
as a Temp Agency use the U-3 Application for Ohio Workers’ Compensation
Coverage form and are processed the same as other business entities following
for Coverage policy.
Temp agencies may
request one policy per industry group for a total of ten policies.
are not permitted to establish separate policies based on location.
When a policy is
issued by Industry Group, only the classifications within that Industry Group
will be assigned to that policy. Exception: NCCI classification 8810.
policies cover the entire state for that particular Industry Group.
existing policy(ies) will be segregated and transferred to the associated
Industry Group policies. The historical payroll and claims information will be
used to develop the experience modifier for the new policies.
Temp agencies must
report all payroll by Industry Group the same at both the federal and State
BWC will include the
Industry Group type in the employer’s entity name to effectively manage each
agencies may request one policy per industry group for a total of ten policies
with no Grow Ohio discount available for these succeeding policies, unless:
eligibility is available to the original policy participating in Grow Ohio.
Grow Ohio transfers
for any period of remaining period of eligibility.
applying for initial coverage, may request one policy per industry group for a
total of ten policies and they may have the Grow Ohio discount.
are forwarded to the Underwriting NCCI Classification unit, who will assign
NCCI Classifications. Each policy will be issued with every available NCCI
classification for that Industry Group.
Grow Ohio discount
is applied to a new Temp agencies starting business in the state regardless if
they choose one policy or up to ten policies.
Temp Agency NCCI
continuing with one policy for their entire operation, should contact BWC prior
to any employees being assigned to employers for additional NCCI
BWC will require the
following information from the Temp agency:
Policy number or
FEIN (not always available. Employer look up may be required to obtain the
Description of the
employee’s job duties.
will be added to the Temp agency’s policy number and documented.
If the Temp agency
has chosen the Industry Group policies, all NCCI Classifications will have
already been assigned to each policy.
The Temp agency
cannot add a classification from another industry group to industry group
If this is being
requested, the Temp agency may no longer be a good candidate for industry
BWC may contact the
Temp agency and advise them to go back to one policy to cover all of their
Temp agencies are
required to assign their employees to the same NCCI classification assigned to
the employers operations.
An exception is when
a Temp agency contracts with a Public entity.
Public entity (PEC
or PES) classifications cannot be added to the Temp agencies policy.
The jobs contracted
with the PEC or PES will have to be classified based on private employer’s NCCI
classification options and the appropriate payroll will be reported to that
iii. Example: The Temp agency contracts with
a city for clerical employees. The clerical employees for the city are
classified to 9431 City Employees – All Employees & Clerical, Clerical
Telecommuter, Salespersons, and Drivers. However 9431 cannot be added to the
Temp agencies policy.
Since the employee
is performing clerical duties the Temp agency must classify and report the
employees to 8810 Clerical.
Temp Agency payroll
The Temp agency will
follow the guidelines outlined in Prospective
Installment Payments policy for paying premiums.
The Temp agency will
follow the guidelines outlined in the Payroll
True-up policy to reconcile estimated annual premium with actual
Temp Agency Audit.
BWC may verify that
Temp agencies are properly reporting their employee payroll through periodic
Auditors will verify
the wages being reported by the Temp agency are correct by policy,
classification and that the proper classifications are assigned to their claims.
shall be processed under the General
Employer Complaint Policy.
BWC has not
identified any employer-specific extenuating circumstances that apply to Temp