The Florida workers compensation class code of 0042 is used to rate the payroll of employees that engage in landscape installation operations. The definition of the class code from NCCI states that 0042 is used primarily for employees involved in the following operations:

Code 0042 is applied to insureds primarily engaged in planning, clearing, grading and planting necessary for landscaping operations. The clearing and grading done by these insureds is of the fine type necessary for finishing operations and does not result in changes to the contour of the land. These insureds may have nursery operations but such work would be limited and usually conducted to furnish stock for their landscaping business. Sod installers are also classified to Code 0042.

The essential difference between the application of Codes 0042 and 9102 to a job is that Code 0042 is applicable to work involving new landscaping installations, whereas Code 9102 is applicable to work involving the maintenance of existing landscaping and/or lawn maintenance.

Information on the current Florida workers compensation rates (Effective April 1st, 2009) is available in an article through that link. Please be aware that these are subject to change based on decisions of the Florida’s Insurance Commissioner and the claim data information he receives from NCCI.

Please feel free to contact us for a free copy of the complete definition for Florida workers compensation class code 0042 or any other classification that could apply to your landscaping business.

The Florida workers compensation class code of 0106 is the class code used to rate the payroll of employees involved in tree trimming. Many landscapers offer tree trimming services to clients and the payroll from those projects must be reported using a separate workers compensation classification code. We receive many questions about which job contracts and how much of an employee’s payroll must be classified to this code on the Florida workers compensation policy. The definition of the class code from NCCI states that 0106 is used primarily for employees involved in the following operations:

Code 0106 applies to specialist contractors who use hand tools or mechanical equipment to prune, spray, repair, trim, or fumigate trees. Code 0106 is applied to risks that perform one or more of the aforementioned activities. These operations may be performed from ground level or by climbing the tree, or may require the use of ladders and/or aerial buckets. The removal, chipping, cleanup, and haul away of tree limbs and debris are also assigned to Code 0106.

Repair operations may involve cutting large, uprooted trees into manageable pieces for removal and/or pulling trees upright. Code 0106 additionally includes incidental tree removal of one or a few trees on developed sites conducted in connection with the described operations.

Applicable by job site to tree pruning contracts requiring any above-ground level work. Code 0106 applies to the whole contract including, but not limited to, chipping and cleanup activities regardless of whether or not a separate contract is written for tree pruning or lawn maintenance and another contract is written for chipping or cleanup. Incidental tree removal on a developed site conducted in connection with tree pruning, spraying, and repairing operations is also assigned to Code 0106. Code 0106 is differentiated from Code 2702—Logging or Lumbering & Drivers because under Code 0106 a tree is removed by cutting it into sections. Also, due to limited clearance from structures, a guide rope is used as needed to direct the fall of the tree.

Code 0106 is applicable to risks contracting exclusively to remove immediate tree hazards due to natural catastrophes. Tree hazard cleanup may involve removing dead trees; trees or branches that are leaning on trees, power lines, or other structures; trees with broken or cracked stems; or large, dead or broken limbs that are still attached to a tree.

Information on the current Florida workers compensation rates (Effective April 1st, 2009) is available in an article through that link. Please be aware that these are subject to change based on decisions of the Florida’s Insurance Commissioner and the claim data information he receives from NCCI.

Please feel free to contact us for a free copy of the complete definition for Florida workers compensation class code 0106 or any other classification that could apply to your landscaping business.

The Florida workers compensation class code of 9102 is the primary class code used by landscapers to rate the exposure of their employees. We receive many questions on which employees should be classified to this code on the Florida workers compensation policy. The definition of the class code from NCCI states that 9102 is used primarily for employees involved in the following operations:

Insureds that perform maintenance of lawns, grounds, and gardens are assigned by analogy to Code 9102. The maintenance may involve lawn mowing, raking, application of liquid or granular fertilizer, spraying and trimming of shrubs or small trees from the ground, and thatching or aerating. If any one or all of the above operations are performed by a lawn maintenance risk classified to Code 9102, then minor and incidental landscaping operations performed by the same risk, such as the replacement of dead shrubs, the planting of a few flowers, and the placing of rock or brick as edging designs are included under Code 9102. This minor landscaping operation is distinguished from work performed by an insured at a job or location where the primary work at the job or location is landscaping.

Information on the current Florida workers compensation rates (Effective April 1st, 2009) is available in an article through that link. Please be aware that these are subject to change based on decisions of the Florida’s Insurance Commissioner and the claim data information he receives from NCCI.

Please feel free to contact us for a free copy of the complete definition for Florida workers compensation class code 9102 or any other classification that could apply to your landscaping business.

Professional Employer Organizations (PEO’s) are staffing companies used to group employees to offer benefits such as workers’ compensation, health insurance, and an outsourced HR and payroll service. Businesses enter into a co-employment contract with a PEO, where the PEO becomes the employer of record for tax and insurance purposes and the business leases the employees from the PEO. That is why PEO’s are sometimes called Employee Leasing Companies. This relationship may save businesses money in the short run and be especially helpful for small businesses in high risk industries that are unable to find insurance coverage. On the other hand, PEO’s may be very expensive for businesses.

- The primary problem with Professional Employer Organizations is that they are unregulated. Because they offer additional services, they may add administrative charges during the course of the contract and may even charge for the administrative services as a percentage of the total payroll. This can be much more expensive than simply using an outsourced payroll and human resources company.

- Due to the unregulated nature of PEO’s, they are under no obligation to give a 30 or 45 day notice before cancellation like an insurance carrier. They are able to cancel insurance coverage and payroll services without a warning. And if the PEO files for bankruptcy, then it leaves the contracted businesses in a sticky situation. They are usually behind on payroll and other insurance claim issues that need to be resolved.

- Many insurance carriers do not like to offer workers’ compensation insurance to PEO’s and they often end up with lower rated workers compensation carriers. The financial rating of the insurance carrier is important for some contracts and may affect the policyholder’s umbrella or excess liability coverage. Policyholders of a PEO also have no influence over the workers compensation carrier that the PEO selects.

- The workers compensation policy is in the name of the PEO and not the policyholder. This causes a large problem for the policyholder because the policy will only cover the leased employees. There will not be any coverage for policyholder’s temporary labor, uninsured subcontractors, independent contractors (1099s), casual labor, or volunteers.

- Businesses contracted with a PEO will also lose other premium savings advantages of having a separate workers compensation policy. These include exemptions, control of their experience modification, premium credits such as the 2% safety credit, 5%drug-free credit, FCCPAP, and premium discounts. They also lose access to other programs that can reduce the net cost of workers’ comp such as loss sensitive dividends, flat dividends, and others. The PEO may not also offer the current workers’ compensation rates offered by the state and could base the rate for premiums on a higher previous rate.

- In addition to those other points, how good is the service a business receives from contracting with a Professional Employer Organization? How effectively are workers compensation claims handled? Is productivity lost through an injury and is there a return to work program available to minimize those claim costs? Are there loss prevention services? How many accidents could have been prevented? How accurate is the payroll and accounting service provided by the PEO and is it competitive with a typical payroll company?

New workers compensation insurance rates are going into effect in Florida for all policies issued on and after April 1st, 2009. The new rates have an average rate increase of 6.4%. We have been tracking this for quite some time as you can see from the previous articles below:

• 2008 Workers Comp Rates
• Upcoming Workers Comp Rates
• 2009 Workers Comp Rates
• Changes in 2009 Florida Work Comp Rates
• 2009 Workers Comp Rate Increase

These new rates do not apply to policies that are currently in effect. They will only be changed when your policy renews on or after April 1st or for new policies that are written on or after April 1st, 2009. Here are the new workers compensation insurance rates for landscaper employees in Florida:

• 0042 - This classification code is applied to businesses that are primarily engaged in installing landscapes. The classification includes planning, clearing, grading and planting necessary for landscaping operations. It also includes the installation of sod. The clearing and grading done by these insureds is of the fine type necessary for finishing operations and does not result in changes to the contour of the land. This classification cannot be used in Florida along with the class code 9102 unless the operations are conducted by separate work crews. Please contact our office for more information regarding the use of both classification codes on the same policy. The NEW Florida rate for this classification is 7.57 dollars for every 100 dollars of remuneration. It was 7.11 at the beginning of the year and in 2008 it was 8.70.
• 9102 - This classification code is assigned to insureds engaged in the lawn maintenance business. Code 9102 is also applied to all employees engaged in the operation of public parks. For landscapers, the essential difference between the application of Code 0042 and Code 9102 is that Code 0042 applies to work involving new landscaping installations whereas Code 9102 applies to work involving the maintenance of existing landscaping and/or lawn maintenance. Insureds that perform maintenance of lawns, grounds, and gardens include work that may involve lawn mowing, raking, application of liquid or granular fertilizer, spraying and trimming of shrubs or small trees from the ground, and thatching or aerating. The NEW Florida rate for this classification is 4.47 dollars for every 100 dollars of remuneration. It was 4.20 at the beginning of the year and in 2008 it was 4.86.
• 0106 - This classification code is applied to employees and businesses that prune and trim trees from above the ground. This code is applicable by job site to tree pruning contracts requiring any above-ground level work and it also applies to the whole contract including, but not limited to, chipping and cleanup activities regardless of whether or not a separate contract is written for tree pruning or lawn maintenance and another contract is written for chipping or cleanup. Incidental tree removal on a developed site conducted in connection with tree pruning, spraying, and repairing operations is also assigned to Code 0106. This classification includes risks contracting exclusively to remove immediate tree hazards due to natural catastrophes. Tree hazard cleanup may involve removing dead trees; trees or branches that are leaning on trees, power lines, or other structures; trees with broken or cracked stems; or large, dead or broken limbs that are still attached to a tree. The NEW Florida rate for this classification is 13.78 dollars for every 100 dollars of remuneration. It was 12.95 at the beginning of the year and in 2008 it was 15.96.
• 5183 - This classification code is applied to employees and businesses that are engaged in plumbing work that is otherwise unclassified by the Basic Manual. For landscapers, this code is used for installation of underground lawn sprinkler systems. Trenching work performed by the same contractor engaged in the installation of underground pipes for sprinkler systems is assigned to this classification since trenching work is an integral part of the underground sprinkler installation work. Such operations may be performed using either a vibrating plow or a pipe pulling machine, which knives the ground to a depth of 12 to 18 inches and to a width comparable to that of the piping being used. The piping is then automatically inserted into the ground. The NEW Florida rate for this classification is 5.47 dollars for every 100 dollars of remuneration. It was 5.14 at the beginning of the year and in 2008 it was 6.75.

The employees and operations of most landscaping businesses are classified into the codes listed above. Depending on the nature of work performed, other classification codes may apply to the business. Code 8810 (NEW 2009 rate: 0.30) is used for employees that only do clerical work and 8742 (NEW 2009 rate: 0.52) is used for those employees that only have sales duties. We are available to provide you with more information about these classifications and how your own employees should be classified.

These rates are still lower than what they were in 2008, but are a little higher than policies that are renewing before April 1st, 2009. Feel free to call our office to discuss this rate change and to have one of our agents quote your workers compensation policy.

I often mention the National Council on Compensation Insurance (NCCI) in my articles about workers compensation. I figured I should write an article describing this organization, so here is some information about them:

The National Council on Compensation Insurance Inc. is based in Boca Raton, Florida, and manages the nation’s largest database of workers compensation insurance information. Their website is available at http://www.NCCI.com.

Operating on a not-for-profit basis since 1922, NCCI studies workplace injuries and other national and state factors impacting workers compensation to provide analysis of industry trends, prepare workers compensation insurance rate and loss costs recommendations, determine the cost of proposed legislation, and provide a variety of data products to over 900 insurance companies and nearly 40 state governments.

NCCI’s core services include:

• • Rate and advisory loss cost filings
• • Cost analyses of proposed and enacted legislation
• • Residual market management
• • Production of experience ratings
• • Statistical and compliance services
• • Maintenance of the workers compensation infrastructure of classifications,
  rules, plans, and forms

In addition to providing these services to the state of Florida, the map below is a convenient reference of states whose insurance departments have designated NCCI as the licensed rating and statistical organization.

States Serviced by NCCI

In a previous article, I mentioned a potential change in the 2009 Florida workers compensation rates. Well, the rate increase proposed by NCCI was declined and a smaller increase was approved by Florida’s Insurance Commissioner. He is an excerpt describing the process that took place:

An order dated January 26, 2009 was entered by Insurance Commissioner Kevin McCarty disapproving an NCCI requested one-year 8.9% increase in the overall workers’ compensation rate levels effective March 1, 2009 on new, renewal, and outstanding policies. The order indicated that although the rate filing was disapproved, a rate filing requesting a 6.4% increase for new and renewal policies effective April 1, 2009 would be approved. The order indicated that there would be no changes in rates for outstanding policies. On February 2, 2009, NCCI submitted an amended rate filing in accordance with the January 26, 2009 order. On February 9, 2009, an order was entered by the Insurance Commissioner approving this amended rate filing.

I will write another article in a couple of days to let our clients know the new workers comp rates for landscapers that will go into effect for all new or renewal policies beginning April 1st, 2009, or later. Here is the article listing the new rates.

Many landscapers in Florida approach us to ask how they should properly file workers’ compensation exemptions for their owners and officers. They also want to know what this means and how it will effect their business. These are great questions and the majority of our landscaping clients make the decision to exclude their owners and some officers from workers’ compensation coverage.

An individual that is an officer of a corporation can elect to be exempt from workers’ compensation coverage. This will exclude the officer from recovering workers’ compensation benefits, but by doing so, the individual may remove their payroll from the total payroll that is used to compute the premium. Many employers choose to be exempt on their workers’ compensation policies to save money on their premium. If the individual meets the requirements below, then they can file for exemption using the following forms:

Non-construction industry corporate officer:

• - The corporation must be registered with the Florida Department of State, Division of Corporations.
• - The applicant must be listed as an officer of the corporation in the records of the Florida Department of State, Division of Corporations.
• - There is no limit to the number of corporate officers eligible for exemption
• - There is no application fee

Construction industry corporate officer:

• - The corporation must be registered with the Florida Department of State, Division of Corporations.
• - The applicant must be listed as an officer of the corporation in the records of the Florida Department of State, Division of Corporations.
• - The applicant must own at least 10 percent of the stock of the corporation as evidenced by a stock certificate or in the case of an LLC a notarized statement attesting to the minimum 10 percent ownership.
• - The applicant must list all certified or registered licenses issued to you.
• - A $50.00 application fee is required.
• - No more than three officers of a corporation (including LLC) or of any group of affiliated corporations (including LLCs) may elect to be exempt.

For landscaping businesses, you will need to file the exemption as a non-construction corporate officer unless you install landscapes and use the 0042 class code for your workers’ compensation insurance. If that is the case, your business is classified as construction and you will need to pay the 50 dollar application fee with your exemption.

Here are the exemption forms:

Online Exemption Form

Download the Exemption Form

Download the Exemption Form Instructions

Download the Form to Revoke an Exemption

In 2003, a major reform was made to the Florida workers’ compensation system. At the time, Florida had the highest rates in the country. One of the major aspects of the reform was to cap the amount plaintiff lawyers were able to charge for their work in a workers’ compensation case. This changed when a recent court case was ruled in favor of removing the cap. As a result, there is the potential for the new 2009 Florida workers’ compensation rates to be increased to reflect the change in the system.

Just before the Thanksgiving holiday, the National Council on Compensation Insurance (NCCI) sent a proposal to Florida’s Office of Insurance Regulation regarding a change in the new rates. The proposal requested an average increase of 8.9% on all the classification codes in Florida. They also proposed that this change goes into effect on March 1, 2009.

The workers’ compensation filing by NCCI will be discussed on December 16th. We will keep you up to date on any decisions made in that meeting and how this will affect your landscaping business. This could have a large effect on your workers’ compensation rates for your 2009 renewal.

Florida issued the new workers’ compensation rates for 2009, which gave businesses an average rate decrease of 18.6 percent. The new rates will be used on all policies issued after January 1st, 2009. For Florida landscaping business, the 2009 rates were also lower than the 2008 rates, making it the fifth straight decrease with a total premium savings of over 60% from the workers’ compensation rates in 2004. Below are the applicable workers comp classifications for landscapers and their corresponding 2009 rates:

• 0042 - This classification code is applied to businesses that are primarily engaged in installing landscapes. The classification includes planning, clearing, grading and planting necessary for landscaping operations. It also includes the installation of sod. The clearing and grading done by these insureds is of the fine type necessary for finishing operations and does not result in changes to the contour of the land. This classification cannot be used in Florida along with the class code 9102 unless the operations are conducted by separate work crews. Please contact our office for more information regarding the use of both classification codes on the same policy. The Florida rate for this classification in 2008 was 8.70 and in 2009 it is now 7.11 dollars for every 100 dollars of remuneration.
• 9102 - This classification code is assigned to insureds engaged in the lawn maintenance business. Code 9102 is also applied to all employees engaged in the operation of public parks. For landscapers, the essential difference between the application of Code 0042 and Code 9102 is that Code 0042 applies to work involving new landscaping installations whereas Code 9102 applies to work involving the maintenance of existing landscaping and/or lawn maintenance. Insureds that perform maintenance of lawns, grounds, and gardens include work that may involve lawn mowing, raking, application of liquid or granular fertilizer, spraying and trimming of shrubs or small trees from the ground, and thatching or aerating. The Florida rate for this classification in 2008 was 4.86 and in 2009 it is now 4.20 dollars for every 100 dollars of remuneration.
• 0106 - This classification code is applied to employees and businesses that prune and trim trees from above the ground. This code is applicable by job site to tree pruning contracts requiring any above-ground level work and it also applies to the whole contract including, but not limited to, chipping and cleanup activities regardless of whether or not a separate contract is written for tree pruning or lawn maintenance and another contract is written for chipping or cleanup. Incidental tree removal on a developed site conducted in connection with tree pruning, spraying, and repairing operations is also assigned to Code 0106. This classification includes risks contracting exclusively to remove immediate tree hazards due to natural catastrophes. Tree hazard cleanup may involve removing dead trees; trees or branches that are leaning on trees, power lines, or other structures; trees with broken or cracked stems; or large, dead or broken limbs that are still attached to a tree. The Florida rate for this classification in 2008 was 15.96 and in 2009 it is now 12.95 dollars for every 100 dollars of remuneration.
• 5183 - This classification code is applied to employees and businesses that are engaged in plumbing work that is otherwise unclassified by the Basic Manual. For landscapers, this code is used for installation of underground lawn sprinkler systems. Trenching work performed by the same contractor engaged in the installation of underground pipes for sprinkler systems is assigned to this classification since trenching work is an integral part of the underground sprinkler installation work. Such operations may be performed using either a vibrating plow or a pipe pulling machine, which knives the ground to a depth of 12 to 18 inches and to a width comparable to that of the piping being used. The piping is then automatically inserted into the ground. The Florida rate for this classification in 2008 was 6.75 and in 2009 it is now 5.14 dollars for every 100 dollars of remuneration.

The employees and operations of most landscaping businesses are classified into the codes listed above. Depending on the nature of work performed, other classification codes may apply to the business. Code 8810 (2009 rate: 0.28) is used for employees that only do clerical work and 8742 (2009 rate: 0.49) is used for those employees that only have sales duties. If you would like more information about these classifications or information on how your own employees should be classified, please do not hesitate to contact our office or request a workers’ compensation quote online.

*These rates may not last all year, as there have been discussions towards new rates due to a recent workers’ compensation court case that will allow larger lawyer fees in the claim handling process. We will keep you updated on any changes.