OAR 836-042-0055
Definitions, Payroll Inclusions and Exclusions
(1)
As used in OAR 836-042-0050 (Statutory Authority; Purpose and Applicability) to 836-042-0060 (Conditions for Division of Payroll of Individual Employees), unless the context requires otherwise:(a)
“Classification” means a grouping of insurance risks according to a classification system used by an insurer.(b)
“Classification System” means a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to risks insured by it.(c)
“Insurer” means any insurer authorized to write workers’ compensation insurance, and the State Accident Insurance Fund Corporation.(d)
“Interchange of labor” means an employee or employees who at different times perform duties described by two or more classifications assigned to an employer according to the classification system used by the insurer.(e)
“Overtime Work,” unless more extensively defined within the rating system used by the insurer, means work beyond the time worked on a regular basis in a day or a week and work on days not worked on a regular basis such as Sundays or holidays but does not include time or days worked on a regular basis according to the contract of employment, whether or not any increased rate of pay is applied.(f)
“Payroll” means money or substitutes for money that are payable to workers for their services and that are specified or defined by the rating system used by the insurer, except that payroll may not include vacation pay, incremental pay recorded for overtime work, and payments excluded as provided in section (2) of this rule.(g)
“Workers’ compensation insurance” means insurance providing coverage for the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656 (Workers’ Compensation), similar laws of the United States, or agreements between states.(2)
An insurer shall include a payment in or exclude a payment from the workers’ compensation premium basis of an employer as follows:(a)
An unanticipated bonus payment to an individual employee shall be excluded. A bonus payment is otherwise subject to inclusion in the premium basis if the payment is anticipated. A bonus payment is unanticipated or anticipated as follows:(A)
A bonus payment is unanticipated if all of the following conditions are met:(i)
The payment is paid as an arbitrary and gratuitous disbursement; and(ii)
The payment is not part of an oral or written employment agreement.(B)
A bonus payment is anticipated if made under one or more of the following circumstances:(i)
The payment is made to any one employee more frequently than twice in a policy period;(ii)
The payment is made to offset a pay cut or reduction in wages;(iii)
The payment is made in lieu of a raise in wages;(iv)
The payment is made to corporate officers who are directors with a substantial ownership in the corporation, as “substantial ownership” is defined in OAR 436-050-0050 (Corporate Officers, Limited Liability Company Members, Partners; Subjectivity)(2)(g);(v)
The payment is made to limited liability company members who have a substantial ownership interest in the company;(vi)
The payment is related to meeting or exceeding preestablished production goals; or(vii)
The payment is related to absenteeism or attendance.(b)
A safety bonus shall be excluded from or included in the premium basis as follows:(A)
A safety bonus shall be excluded if all of the following conditions apply with respect to the payment:(i)
The payment is anticipated;(ii)
The payment is distributed in accordance with a written plan; and(iii)
The payment is tied strictly to safe working practices.(B)
A safety bonus shall be included if the safety bonus is paid to offset pay cuts or a reduction of wages.(c)
A profit sharing payment shall be excluded from the premium basis if all of the following conditions apply with respect to the payment:(A)
The payment is anticipated;(B)
The payment is distributed from net realized profits; and(C)
The payment is distributed in accordance with a written plan that creates a legal obligation for the employer to disburse funds in accordance with the plan.
Source:
Rule 836-042-0055 — Definitions, Payroll Inclusions and Exclusions, https://secure.sos.state.or.us/oard/view.action?ruleNumber=836-042-0055.