To: Insurance Carriers Providing Benefits Under the Workers' Compensation Law
Date: September 1, 2000
On January 1, 1999 CIRB (Compensation Insurance Rating Board) instituted an "alternate method of providing workers' compensation insurance coverage for employee leasing arrangements." For purposes of this Subject Number, a labor contractor is defined as a firm that is leasing individuals to client companies. A client is an employer (legal entity) that is using the services of individuals leased to the client by a labor contractor.
For purposes of this Subject Number, a labor contractor is defined as a firm that is leasing individuals to client companies.
For purposes of this Subject Number, a client is defined as an employer (legal entity) that is using the services of individuals leased to the client by a labor contractor.
CIRB's prior reporting rules, effective July 1, 1993, stated that one insurance policy be issued to the client to cover both its leased and non-leased workers. A separate policy had to be issued to cover the non-leased employees of the labor contractor. These policies were separately submitted to the WCB via form C-220 (Notice of New Policy or Reinstatement of Policy) and C-221 (Notice of Cancellation or Intention not to Renew). The Optional Rule states in part that "the carrier has the ability to issue individual policies naming the labor contractor as the named insured for each of its client's leased workers."
Bulletin R. C. 1895 outlines the details of the Optional Rule in regard to endorsement requirements and experience ratings (see, in particular, Rule II, 2.a and b.).
Under the new optional rule, effective January 1, 1999, labor contractors may purchase coverage for all of their leased employees. Each client of the labor contractor is named as an additional insured. A separate C-220 must be issued and submitted to the WCB for each client insured by the leasing company. The labor contractor must also have a workers' compensation insurance policy covering its own staff. Similarly, the non-leased staff of the client will continue to need coverage by their employer, the client.
In order to effectively transmit optional rule information from the Carrier to the Workers' Compensation Board; the following procedure is hereby implemented:
WCB Form C-220 (Notice of Issuance of New Policy or Reinstatement of Policy) and Form C-221 (Notice of Cancellation or Intention not to Renew) containing labor contractor client information must be submitted as follows:
The above outlined procedure will allow the WCB to enter and track both client and labor contractor information more efficiently and with greater accuracy. In addition, applying the guidelines listed will help the WCB to ensure that all involved parties receive the best service possible. Example of a properly completed C-220 .
As noted in Bulletin R. C. 1895, a WCB Workers' Compensation Law Judge will, in the event of a claim being filed with the WCB in a particular matter, continue to be the final decision-maker as to employer/employee relationship, subject to any applicable appeals procedures.
Please contact the Bureau of Compliance if you have any further questions.
K. Brian Collins
Director, Bureau of Compliance