Question: What is the Jones Act?

The Jones Act is a federal law designed to offer remedy and legal protection to sailors, seamen, and other maritime employees who are not covered by state workers compensation and employers liability laws. The Merchant Marine Act of 1920, also known as the Jones Act, is compensation legislation intended to allow sailors with injuries to recover money to help cover the costs of medical care and health recovery. 

State laws do not apply to employees on wharves, docks, or navigable waters whether they be interstate or international. It allows maritime employees the ability to sue their employers or shipowners should they be injured through the negligence of that employer or shipowner.

The Merchant Marine Act of 1920, also known as the Jones Act, is compensation legislation intended to allow sailors with injuries to recover money to help cover the costs of medical care and health recovery. However, it is not a workers compensation law for seamen and maritime workers. In some cases it is more and in others it is less. Additional benefits apply if the injury is caused by negligence of the employer or by the work environment on the vessel. Injured sailors are entitled to many of the same things covered under other workers compensation laws. Some benefits to which they are entitled are payments when they are disabled or otherwise incapable of working, payment for the costs of medical care and ongoing rehabilitation and transportation costs. In cases where the injury was caused by a negligent working environment, the injured sailor is entitled to additional damages for Pain and Suffering.

The Act covers injured seamen but not longshore and harbor workers. These workers have other federal statutes, such as The United States Longshore and Harbor Workers’ Compensation Act (USL&HWCA), to respond to their injuries, just as laws are in place to protect workers in general. All workers compensation legislation is intended to provide a framework for protecting workers when they become injured. It details the circumstances under which employers, the ship owners in the case of the Jones Act, are responsible for the costs of medical care for an injured sailor, including ongoing healthcare for repairing and rehabilitating that injury.

While the intent of the law is to assist the worker, the original idea behind all workers compensation laws, including the Jones Act, was to reduce the cost of litigation. The overall goal is to provide a fair process that assures the sailor the timely medical benefits he or she is entitled to, without having the financial burden of hiring an attorney, forcing the employer to go to court and having a judge review and assess damages. However, the law is complex and situations may develop where it is in the best interest of all parties to seek the advice of qualified legal counsel.

The Merchant Marine Act of 1920 (Jones Act) is federal legislation (The Jones Act 46 U.S.C.S.App.688 [2002]) and includes admiralty and maritime law. It also applies to workers working on offshore oil rigs. A seaman is defined as an individual engaged or employed in any capacity aboard a vessel, including the master and members of the crew. It does not include scientists on board ships, sailing instructors or sailing school students. Coverage is provided for these exposures by attaching the appropriate coverage endorsements to the standard Workers Compensation and Employers Liability Insurance Policy.

Question: What is the Longshore and Harbors Workers Compensation Coverage?

The Longshore and Harbors Workers Compensation Coverage is provided by an endorsement to the workers compensation policy. It covers workers or maritime employees in positions such as longshoremen, harbor workers, shipbuilders, ship-breakers, ship repairers or other employees engaged in loading, unloading, repairing or building vessels. It also covers employees who work on navigable waters, adjoining piers, wharves, dry docks, terminals, building ways and marine railways. It does not cover masters, captains, or crews of vessels unless further endorsed to voluntarily cover those positions. Associations that operate on the water, especially on navigable waters, such as rivers and oceans, may be required to purchase this coverage.

The United States Longshore And Harbor Workers’ Compensation Act (USL&HWCA) was enacted by legislation in 1927. It is a federal workers compensation law that applies to maritime employees who work on or over navigable waters in or adjacent to the United States. However, it does not apply to sailors, seamen, masters and crews of any ship, vessel or watercraft. The workers subject to this Act are usually not eligible for state workers compensation benefits because they work on or over navigable waters. They are also not eligible for coverage under the Jones Act or the Merchant Marine Act because they are not seamen. As a result, the USL&HWCA was needed to fill the coverage gap for this class of workers.

Question: What data goes into the experience mod calculation?

The experience mod uses your loss data and your payrolls. The loss data is reported to the National Council on Compensation Insurance (NCCI) in the middle of your policy year. Losses include both amounts paid and claim reserves. Your payroll data comes from the audits performed by your insurance company at the end of every policy period. The experience mod calculations look back at your last four workers’ compensation policy periods and only use information on the oldest three policies. They do this because claims on your most recent policy may not have been closed and because they have not been reported yet to NCCI. Click here for more information on Workers’ Compensation Insurance Mods.

Question: Who calculates the workers compensation experience modification factor?

 The National Council on Compensation Insurance (NCCI) is a not-for-profit rating, statistical and data management services organization. They are funded by a variety of workers’ compensation insurance organizations and companies to act as a central source of workers’ compensation data. Part of their responsibility is the calculation of experience modification data. They receive claim and audit information on your business from your insurance company and calculate your experience mod. Please select this link for more information on Florida Workers’ Compensation Experience Mods.

Question: What happened to my sheet metal classification, 5538?

Effective January 1, 2008, NCCI discontinued the use of class code 5538 for Sheet Metal Work.  These types of accounts are reassigned to two new codes:

5535 - Sheet Metal Work – Installation & Drivers (applicable to the installation of sheet metal products

3069 - Sheet Metal Product MFG. (applicable to the manufacturing of sheet metal products by installers of sheet metal products)

Both codes are rated $11.99 according to NCCI’s 1/1/08 rates.  This is a $0.69 decrease from the $12.68 rate for code 5538.

Question: What are the class codes and workers compensation rates for employees doing carpentry?

There are five classification codes used for the workers comepnsation of carpentry businesses in Florida:

2802 - This classification is applicable to businesses whose operations consist of the manufacture and/or assembly of wood products in a shop. The products manufactured typically will not require a high degree of finishing work. If an insured engages in both carpentry shop and installation/erection operations, separate classifications may apply to each type of exposure. For example, preliminary shop carpentry performed by contractors in connection with the building of private residences may be assigned to Code 2802 while the actual building of the dwelling may be assigned to a carpentry construction classification such as Code 5645. Refer to the Basic Manual for rules governing this type of situation as well as the necessary record keeping requirements.The Florida rate for this classification in 2007 was 11.75 and in 2008 it is now 8.15 dollars for every 100 dollars of remuneration.

5437 - This classification code is intended primarily for specialist contractors performing interior carpentry finish or trim such as the installation of paneling, molding, cornices, parquet or finished wooden flooring, mantels, staircases, cabinets and counters. This classification code is not applicable to contractors who perform other carpentry operations in addition to ones listed above at the same job or location, and if other work is done, then the entire carpentry payroll must be assigned to the applicable carpentry construction classification. The Florida rate for this classification in 2007 was 13.01 and in 2008 it is now 10.47 dollars for every 100 dollars of remuneration.

5654 - This classification is assigned when all of the carpentry work in connection with the construction of a private residence is performed by employees of the same contractor, all work including the construction and erection of the sill, rough framework, rough floor, studs, joists, rafters, roof deck, all types of roofing materials, sidewall sheathing, siding, doors, wallboard installation, lathing, windows, stairs, finished flooring, cabinet installation, fencing, decking and all interior wood trim. Carpentry repair or remodeling of private residences is also contemplated under this classification when the work includes some framing or structural carpentry renovation of the premises that would ordinarily be assigned to Code 5645. The Florida rate for this classification in 2007 was 27.71 and in 2008 it is now 20.04 dollars for every 100 dollars of remuneration.

5651 - This classification code is used for carpentry work on dwellings for more than 2 families where all of the carpentry work in connection with the construction of the dwelling, that also must be three stories or less, is performed by employees of the same contractor. This work in this classification includes the construction and erection of the sill, rough framework, rough floor, studs, joists, rafters, roof decks, all types of roofing materials, sidewall sheathing, siding, doors, wallboard installation, lathing, windows, stairs, finished flooring, cabinet installation, decking, fencing and all interior wood trim. Carpentry repair or remodeling of dwellings three stories or less is also contemplated under this classification.  The Florida rate for this classification in 2007 was 17.61 and in 2008 it is now 13.05 dollars for every 100 dollars of remuneration.

5403 - This classification code covers general carpentry work not otherwise classified in NCCI’s Scopes Basic Manual. It contemplates carpentry work of a commercial and industrial nature such as buildings or structures and the construction and repair of dwellings and other buildings that exceed three stories in height. Code 5403 includes interior or exterior framing activities that involve the use of wood and/or light-gauge steel. This code also further applies to the wrecking of wooden buildings or structures including wooden bridges. The Florida rate for this classification in 2007 was 18.25 and in 2008 it is now 14.39 dollars for every 100 dollars of remuneration.

At FloridaWC.com, we can help classify your payroll into the appropriate classification code and would like to provide your construction business with quotes on Florida workers’ compensation insurance. Please give us a call or complete our online workers’ compensation quote request form to get started.

Question: I have a painting business, what should be the class code and workers compensation rates for my employees?

There are few classification codes for your employees depending on the type of work you perform. They are listed below along with the rates for each:

5474 - This classification code is the general painting classification. It contemplates exterior and interior painting of residential or commercial structures that are constructed of wood, concrete, stone or a combination thereof regardless of height. Commercial structures include but are not limited to office buildings, stores, theaters and auditoriums. Additionally, paperhanging conducted in connection with painting operations is assigned also assigned to this classification in addition to surface preparation and other work incidental to the painting process as well as the installation and dismantling of scaffolding or other equipment used to facilitate the painting process when performed in conjunction with an insured’s painting operations at a particular job site. The Florida rate for this classification in 2007 was 13.51 and in 2008 it is now 9.7 dollars for every 100 dollars of remuneration.

9501 - This classification is applied to employees engaged in the business of painting in the insured’s shop or those risks engaged in sign painting or lettering at a customer’s premises. Articles painted may include goods manufactured by others or component parts made from wood, metal, glass, leather or plastic. The operations include the preparation of the paint-receiving surface, which may involve degreasing, sanding or wire brushing; the application of paint by hand brushing, rolling, spraying or dipping; and drying in ovens using infrared lamps or natural ventilation. This classification also includes drivers, so employees that pick-up or deliver articles to be painted are included. The Florida rate for this classification in 2007 was 6.33 and in 2008 it is now 3.97 dollars for every 100 dollars of remuneration.

9505 - This classification is applied to employees engaged primarily in the painting or repainting of automobile or carriage bodies. The operations contemplate sanding, masking, spray painting and baking. The classification includes incidental body repair in the sense that dents that are hammered out or rust spots that are removed are considered to be normal operations preparatory to painting. Where these paint shops go beyond the minor renovating work and engage in structural repair, then they should be classified as a secondary business covered under code 8393 for Auto Body Repair. Specialist contractors engaged in the application of undercoating to automobiles utilizing either modified spray painting equipment or hand brushes have been assigned to this 9505 classification code as well as specialists engaged in painting pinstriping or other designs or artwork on automobile bodies. Refer to Code 9522 for insureds engaged in the business of affixing striping tape to vehicle bodies. Code 9505 is also applied to insureds engaged in painting conducted in conjunction with automobile, bus, truck or trailer body manufacturing or painting of bus, truck or trailer bodies that have been repaired by the body manufacturing plants. The Florida rate for this classification in 2007 was 7.61 and in 2008 it is now 6.67 dollars for every 100 dollars of remuneration.

5037 - This classification is applied to employees that paint metal structures which exceed two stories in height. For commercial structures, a “story” is defined as being fifteen (15) feet in height. The painting of metal structures falling within the scope of Code 5037 includes metal skeleton frameworks of buildings exceeding two stories; smokestacks; cross-country power line towers; radio towers; television towers; aircraft; aircraft beacon towers; and observation towers. This classification contemplates both the installation of scaffolding and the preparation of surfaces to be painted when these operations are performed by an insured in conjunction with an insured’s painting operations at a particular job site. Code 5037 is not intended to apply to painting the interior or exterior of buildings or other structures which are made of wood, concrete, stone or a combination thereof. This classification is also applied to contractors engaged in the painting of metal bridges of all types regardless of height and encompasses the painting of viaducts, railroad overpasses, trestles and elevated highways. The Florida rate for this classification in 2007 was 35.28 and in 2008 it is now 33.16 dollars for every 100 dollars of remuneration.

6874 and 6884 - Both of these classifications are used for employees that paint ship hulls.

 At FloridaWC.com, we can help classify your payroll into the appropriate classification code and would like to provide your painting business with quotes on Florida workers’ compensation insurance. Please give us a call or complete our online workers’ compensation quote request form to get started. Also, let us know if you have any other workers’ compensation questions.

Question: If I have a small claim that I paid, should I report that to my workers’ compensation insruance company?

 Yes, you are required to report all employee injuries to your workers’ compensation insurance company within 7 days of the injury. It is always best to report injuries as soon as possible. If there are no cost to the claims, then they will not effect your future premium because those claims are taken off your record when computing your workers’ compensation experience modifier. It is always best to let your insuranc ecompany know about claims and why they happened so you can use preventative measures to keep them from reoccuring.

Question: Will establishing a safety program save me money on my insurance premiums?

Yes, If you set up a writeen safety program, you may be eligible for a 2 percent premium credit from your insurance carrier on your workers’ compensation insurance premium. In addition to the premium credit, having a Safety Program will make your workplace safer, which may result in fewer accidents and therefore reduce your future workers’ compensation costs. Click here for more information on the Safety Program Premium Credit.

Question: Are independent contractors considered employees?

Independent contractors are not employees. Prior to 1990, independent contractor was not defined. In the 1990 law, independent contractor was defined as someone whose actual conduct is not subject to the control and direction of the employer.

In 2003, the Legislature amended the definition of independent contractor to the six criteria below:

1. The independent contractor maintains a separate business with his or her own work facility, truck, equipment, materials, or similar accommodations;

2. The independent contractor holds or has applied for a federal employer identification number, unless the independent contractor is a sole proprietor who is not required to obtain a federal employer identification number under state or federal regulations;

3. The independent contractor receives compensation for services rendered or work performed and such compensation is paid to a business rather than to an individual;

4. The independent contractor holds one or more bank accounts in the name of the business entity for purposes of paying business expenses or other expenses related to services rendered or work performed for compensation;

5. The independent contractor performs work, or is able to perform work, for any entity in addition to or besides the employer at his or her own election without the necessity of completing an employment application or process; or

6. The independent contractor receives compensation for work or services rendered on a competitive-bid basis, or completion of a task or a set of tasks as defined by a contractual agreement, unless such contractual agreement expressly states that an employment relationship exists.

In order to meet the definition of independent contractor, in non-construction at least four of the six criteria must be met. In the construction industry, all six criteria listed above must be met.

Note: The “independent contractor” status of individuals engaged in certain agricultural, forestry, or farming occupations, and newspaper delivery persons, are not governed by the six criteria listed above, but rather by common law principles (Internal Revenue Service guidelines are often cited), pending a review of the actual business activity of the individual.