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POLICYHOLDER NOTICE <br />PAYROLL RECORD AND AUDIT REQUIREMENTS FOR <br />DUAL WAGE CONSTRUCTION OR ERECTION CLASSIFICATIONS <br />Yourpolicyincludesoneormoreconstructionorerectionclassifications.Dualwageclassificationsarepairsof <br />classificationsthatdescribethesameconstructionorerectionoperationyetareassignedbaseduponwhetherthe <br />employee'shourlywageisaboveorbelowaspecifiedthreshold.Eachpairofdualwageclassificationscontainsone"high <br />wage"classificationthatisassignabletopayrollsearnedbyemployeeswhoseregularhourlywageequalsorexceedsa <br />specifiedwagethresholdandone"lowwage"classificationthatisassignabletopayrollsearnedbyemployeeswhose <br />regular hourly wage is less than the specified threshold. <br />Payroll Record Requirements <br />Theassignmentofahighwageclassificationiscontingentonverifyingthattheemployee'shourlywageequalsor <br />exceedsthespecifiedwagethreshold.Thedeterminationoftheregularhourlywageforanynon-salariedemployeemust <br />be supported by one of the following sources: <br />o Originaltimecardsortimebookentriesforeachemployee.Originalrecordsmustincludetheoperations <br />performed,thetotalhoursworkedeachdayandthetimestheemployeestartedandendedeachworkperiod <br />throughouttheworkday.Atjoblocationswherealloftheemployer'soperationsceaseforauniformunpaid <br />meal period, recording the start and stop times of the uniform break period is not required. <br />o Avalidcollectivebargainingagreementthatshowstheregularhourlywageratebyjobclassificationofa <br />worker.Ifusingacollectivebargainingagreement,therecordsmustincludeanemployeerosterbyjob <br />classificationthatpermitsthereconciliationofindividualemployeestothejobclassificationssetforthinthe <br />collective bargaining agreement. <br />Thenon-salariedemployee'sregularhourlywageshallbedeterminedbydividingthatemployee'stotalremunerationby <br />thehoursworkedduringthepayperiod,irrespectiveofwhethertheemployeeispaidonanhourly,piecework,production <br />or commission basis. <br />Thepayrollearnedbyanynon-salariedemployeesforwhomtherecordsspecifiedabovearenotmaintainedand/ormade <br />available will be assigned to the low wage classification that describes the operations performed. <br />Theregularhourlywageofsalariedemployeesisdeterminedbydividingthetotalannualremunerationby2000hours.If <br />anemployeeissalariedforlessthan12months,theregularhourlywageforthesalariedperiodiscalculatedona <br />prorated basis. <br />Audit Requirements <br />IfyourpolicyhasaneffectivedateonorafterJanuary1,2020andproducesafinalpremiumof$10,500ormore,a <br />physicalauditisrequiredatleastonceayear;ifitproducesafinalpremiumoflessthan$10,500anddevelopspayrollina <br />highwageclassification,aphysicalauditofthepolicyisrequiredunlessthepolicyisarenewalandaphysicalauditwas <br />completedforoneofthetwoimmediatelyprecedingpolicyperiods.A"physicalaudit"isdefinedasanauditofpayroll, <br />whetherconductedatthepolicyholder'slocationorataremotesite,thatisbaseduponanauditor'sexaminationofthe <br />policyholder'sbooksofaccountsandoriginalpayrollrecords(ineitherelectronicorhardcopyform)asnecessaryto <br />determine and verify the exposure amounts by classification. <br />IfyouholdaC-39RoofingContractorlicensefromtheCaliforniaContractorsStateLicenseBoard,aphysicalauditis <br />requiredonthecompletepolicyperiodofeachpolicyregardlessoftheamountoffinalpremium.SeeCaliforniaInsurance <br />Code Section 11665(a) for additional requirements regarding the audit of C-39 license holders. <br />Form PN 04 99 06 D Printed in U.S.A. <br /> <br />