Washington Risk Class Codes for Zenefits Payroll (PYP)
Overview
In Washington, there is an Agency of Labor & Industries. This agency manages (a) workers’ compensation tax, and (b) assigns company specific risk class codes, which are then used to calculate the workers’ compensation tax.
We need to collect the combination of risk class code and rate so that we can assign employees to a particular code, thereby calculating the tax correctly.
What happens if the admin does not enter this information?
We currently prevent Admins from running payroll and display a payroll run validation error (in the form of a red exclamation point).
How can an admin enter in the information for their employees?
Once we validate for employees with missing risk class codes, we generate an inbox item (RA) where Admins can assign employees to a risk class code in bulk. This inbox task will appear in the Company Inbox page AND the Payroll Overview page. Please note, however, that the inbox task may take a few seconds to generate after the validation runs.
Optionally, Admins can navigate to an employee’s profile, click “Payroll Settings” and select the risk class code there. (See second screenshot.)
They will need to respond to the Inbox Task on their dashboard:
What if the dropdown is blank?
If there are not any codes for the admin to select, it is likely because there are not any risk class codes assigned to the company. You can check in the PYP Management Console under the Taxes tab.
If the codes are not assigned, you will need to get the information (including whether they want to split costs with EEs) from the admin and then loop in the Tax Specialist team to enter in the information.
What about owners?
The following types of Company Officers are exempt — Partners, LLC Members, Sole Prop Owners, Corporate Officers, and Two Percent Owners. All Owners will need a risk class code because we have found that (a) only the first 8 officers are exempt from workers’ compensation, and (b) Officer information may be incorrect, which means we need the risk class code to correct properly.
If they are listed as 2% share owners, they will likely be exempt. There is a rule that states only 8 officers of the company can be exempt. We require them to enter the risk class code for all owners in case they enter more than 8 owners and we have to file for them in the future.
Does this tax affect bonus runs?
Bonus earnings are NOT subject to WA Worker’s Comp. However, it is subject to the Washington Rate Class 1 through 40 Employment Admin Fund (SUTA Surcharge) so they will see a line item for that on the bonus runs.
If there are bonus and regular earnings in the same run, they will be subject to the L&I tax.
Does this tax affect overtime and double overtime earnings?
Yes! The workers compensation tax will apply to earnings for hours worked.
Is there any external Help Center for the admin about this?
What happens if there is no RA on the admin dashboard?
The admin will need to go to the employee profile and then Payroll Settings.
