Report on Trenching Operations

Transcription

1 Workers Compensation Insurance Rating Bureau of California Workers Compensation Insurance Rating Bureau of California Report on Trenching Operations Excerpt from the WCIRB Classification and Rating Committee Minutes June 12, 2007 About this Report The WCIRB prepares and presents reports to the WCIRB s Classification and Rating Committee to assist in the formulation of proposed changes to the Insurance Commissioner s regulations. Once adopted by the Classification and Rating Committee, the recommendations contained in the report are provided to the WCIRB Governing Committee and may be included in a WCIRB regulatory filing that is submitted to the Insurance Commissioner for approval. About the WCIRB The WCIRB is California's trusted, objective provider of actuarially-based information and research, advisory pure premium rates, and educational services integral to a healthy workers' compensation system. Learn more at

2 Notice This Report was developed by the Workers Compensation Insurance Rating Bureau of California (WCIRB) to assist in the formulation of proposed changes to the Insurance Commissioner s regulations. The WCIRB has made reasonable efforts to ensure the accuracy of this Report. You must make an independent assessment regarding the use of this Report based upon your particular facts and circumstances Workers Compensation Insurance Rating Bureau of California. All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, electronic or mechanical, including, without limitation, photocopying and recording, or by any information storage or retrieval system without the prior written permission of the Workers Compensation Insurance Rating Bureau of California (WCIRB), unless such copying is expressly permitted in this copyright notice or by federal copyright law. Each WCIRB member company, including any registered third-party entities, (Company) and agents and brokers licensed to transact workers compensation insurance in the state of California are authorized to reproduce any part of this work solely for the purpose of transacting workers compensation insurance and for no other purpose. This reproduction right does not include the right to make any part of this work available on any Website or on any form of social media. Workers Compensation Insurance Rating Bureau of California, WCIRB,, WCIRB Online, X-Mod Direct, escad and the logo (WCIRB Marks) are registered trademarks or service marks of the WCIRB. WCIRB Marks may not be displayed or used in any manner without the WCIRB s prior written permission. Any permitted copying of this work must maintain any and all trademarks and/or service marks on all copies. To seek permission to use any of the WCIRB Marks or any copyrighted material, please contact the Workers Compensation Insurance Rating Bureau of California at customerservice@wcirb.com.

3 Report on Trenching Operations Final Report May 8, 2007 Classification 6218(1)/6220(1), Excavation N.O.C. including borrowing, filling or backfilling Classification 6218(2)/6220(2), Grading Land N.O.C. including borrowing, filling or backfilling EXECUTIVE SUMMARY Objective At the request of the Classification and Rating (C & R) Committee, WCIRB staff reviewed the classification procedure applicable to trenching operations as described in the California Workers Compensation Uniform Statistical Reporting Plan 1995 (USRP), including the Rulings and Interpretations Supplement (R & I). The review was conducted to ensure that both the USRP and the R & I clearly conveyed the classification procedure for trenching. Findings and Recommendation Current classification procedure, as outlined in the R & I entry, provides that trenching operations by specialty contractors shall be assigned to Classification 6218(1)/6220(1), Excavation N.O.C. including borrowing, filling or backfilling, except when conducted in connection with the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction. In such exception cases, trenching is assigned to the classification that best describes the project they support (e.g., Classification 6233, Oil or Gas Pipeline Construction, Classification 6307, Sewer Construction.) The rationale underlying the current classification procedure for specialty trenching operations is twofold: (1) The primary construction activity in many of the affected classifications is trenching thus making it appropriate to include trenching operations within the scope of the classifications; and (2) Trenching operations involve the removal of soil to create a trench or canal that subjects workers to hazards from collapsing soil. This hazard is inherent to the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction again, making it appropriate to include the trenching within the scope of the related classifications. In consideration of the underlying rationale, WCIRB staff has determined that the existing classification procedure is consistent with the objective of ensuring that each standard classification represents a distinct industry engaged in a relatively homogenous set of activities. Accordingly, in order to clarify this process, the WCIRB proposes adding a footnote to Classifications 6218(1)/6220(1), Excavation N.O.C., and 6218(2)/6220(2), Grading Land N.O.C., indicating that trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. 1

4 Introduction At its June 13, 2006 meeting, in connection with a study of a proposed increase to the thresholds for dual wage classifications, the C & R Committee reviewed the operations assignable to Classifications 6218(1)/6220(1), Excavation N.O.C., and 6218(2)/6220(2), Grading Land N.O.C. As part of its review, the Committee noted while the USRP at Part 3, Standard Classification System, Section IV, Special Industry Classification Procedures, Rule 2, Construction or Erection Work, provides that...[d]ivision of payroll shall be made for each separate and distinct type of construction or erection operation that is specifically described by a classification..., an R & I entry directs that [t]renching operations by specialty contractors shall be assigned to Classification 6218(1), Excavation N.O.C., or Classification 6220(1),* Excavation N.O.C., except when such trenching operations are in connection with the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction. In such cases, trenching operations shall be assigned to the one of the following classifications In view of the above, the Committee asked WCIRB staff to review the rules related to Trenching to determine if changes to the USRP or R & I are warranted. Classification History The following is a summary of the history of the classification treatment afforded to specialty trenching operations. 1965: An employer appealed the classification applied to its trenching operations. As a result of this appeal the C & R Committee instructed WCIRB staff to draft a Bureau Circular that describes the classification procedure for custom trenching operations in connection with the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction. (Exhibit 1) 1967: An R & I entry was adopted for trenching based on Bureau Circular #748. (Exhibit 2) 1975: The R & I entry for trenching was expanded to specify that trenching in connection with irrigation pipe installation is assignable to Classification 6364, Irrigation Pipe Installation. Operations A trench is essentially any long ditch cut or excavated in the ground. Trenches are excavated in support of a number of construction operations. In general, excavation and trenching operations are assignable to Classification 6218(1)/6220(1) Excavation N.O.C., or 6218(2)/6220(2), Grading Land N.O.C., as presented below: 2

5 EXCAVATION N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage does not equal or exceed $25.00 per hour Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. EXCAVATION N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage equals or exceeds $25.00 per hour Assignment of this classification is subject to verification at the time of final audit that the employee s regular hourly wage equals or exceeds $25.00 per hour. The payroll of an employee whose regular hourly wage is not shown to equal or exceed $25.00 per hour shall be classified as 6218(1), Excavation N.O.C. Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. GRADING LAND N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage does not equal or exceed $25.00 per hour Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. GRADING LAND N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage equals or exceeds $25.00 per hour Assignment of this classification is subject to verification at the time of final audit that the employee s regular hourly wage equals or exceeds $25.00 per hour. The payroll of an employee whose regular hourly wage is not shown to equal or exceed $25.00 per hour shall be classified as 6218(2), Grading Land. Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. 6218(1) 6220(1) 6218(2) 6220(2) Other Construction Classifications that Include Trenching: In addition to the above, firms that perform specialty trenching operations in connection with the construction of canals, irrigation or cross-country water pipelines, oil or gas pipelines or sewers are assigned to the following classifications: CANAL CONSTRUCTION all operations 6361(1) Pile driving, tunneling, dam or sewer construction shall be separately classified. Canal construction involves excavating a trench along the path of the canal. For concrete lined canals, wood forms are erected, reinforcing steel is tied within the forms and concrete is poured, tamped, screened, smoothed, and further worked to form concrete canal walls. After curing, the concrete forms are stripped away to complete. Some canals are lined with rock after the canal bed is excavated. CROSS-COUNTRY WATER PIPELINE CONSTRUCTION all operations 6361(2) Pile driving, tunneling, and dam or sewer construction shall be separately classified. The construction of cross-country water pipelines involves excavating a trench to accommodate the pipeline. The trench is shored or reinforced with jacks and wooden planks as needed. Crews lay clay or transit water pipe and make the necessary connections after which, the pipeline is leak tested. The trenches are back-filled with soil and compacted to complete. 3

6 IRRIGATION PIPE INSTALLATION agricultural all operations 6364 Irrigation pipe construction involves excavating a trench from a pump station to the desired point. As required, trenches are shored or reinforced with jacks and wooden planks. Operations involve the receipt of plastic, metal or concrete pipe varying in width and length after which irrigation pipe is laid into the trench, sections are coupled, laterals connected, and risers installed. The system is tied into the pump station and tested, and the trenches are backfilled with soil and compacted to complete. OIL OR GAS PIPELINE CONSTRUCTION 6233 Pile driving, dredging or tunneling shall be separately classified. Oil or gas pipeline construction involves excavating a trench to proper depths according to plans. Trenches are shored or reinforced with jacks and wooden planks. Steel pipe sections are lowered into the trench, welded and tested for leaks. The trenches are backfilled with soil and compacted to complete. SEWER CONSTRUCTION all operations including construction of laterals and tunneling at street crossings employees whose regular hourly wage does not equal or exceed $24.00 per hour SEWER CONSTRUCTION all operations including construction of laterals and tunneling at street crossings employees whose regular hourly wage equals or exceeds $24.00 per hour Assignment of this classification is subject to verification at the time of final audit that the employee s regular hourly wage equals or exceeds $24.00 per hour. The payroll of an employee whose regular hourly wage is not shown to equal or exceed $24.00 per hour shall be classified as 6307, Sewer Construction Sewer work is typically performed along public streets and roads for city municipalities. After streets and roads have been rough cut by separate concerns, trenches are excavated for main line and laterals along the streets and roads up to property lines. Trenches vary in width depending on the pipe diameter and terrain. As needed, the trenches are shored with jacks and wooden planks. At designated locations, manholes are constructed from brick and concrete. Clay, concrete, or plastic pipe (generally 8 to 12 in diameter) is laid and connected to manholes. Necessary laterals are branched off the main line using T and Y connections. The laterals are extended from the main line and stubbed out at the property line. The lines are tested for water pressure and blockage. The trenches are backfilled with soil and compacted to complete. Analysis and Findings WCIRB staff reviewed the classification procedure for specialty trenching operations to determine the extent to which it comports with the special industry classification procedure for construction and erection operations. The special industry classification procedures for Construction or Erection work delineates the rules for the classification of firms that perform construction or erection operations including the following: Division of payroll shall be made for each separate and distinct type of construction or erection operation that is specifically described by a classification, provided separate records of payroll are maintained and provided the use of any such 4

7 classification in connection with a separate job or location is not restricted by classification phraseology or footnotes. (Emphasis added.) As indicated above, each construction operation described by a distinct classification can be separately classified provided accurate payroll segregations are maintained. That said, the R & I entry for Trenching provides a different classification treatment for some specialty excavation operations: Trenching 6220(1) Excavation equals or exceeds $ (1) Excavation less than $25.00 Trenching operations by specialty contractors shall be assigned to Classification 6218(1)*, Excavation N.O.C., or Classification 6220(1),* Excavation N.O.C., except when such trenching operations are in connection with the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction. In such cases, trenching operations shall be assigned to one of the following classifications: Classification 6361(1), Canal Construction all operations Classification 6361(2), Cross-Country Water Pipeline Construction Classification 6364, Irrigation Pipe Installation Classification 6233, Oil or Gas Pipeline Construction Classification 6307*, Sewer Construction Classification 6308*, Sewer Construction *(Subject to regular hourly wage of the employees see actual classification phraseologies.) There is nothing within the USRP that directs this exception handling of specialty trenching operations. As such, WCIRB staff examined the propriety of the approach described by the R & I. The rationale underlying the current classification procedure for specialty trenching operations is twofold: (1) The primary construction activity in many of the affected classifications is trenching thus making it appropriate to include trenching operations within the scope of the classifications; and (2) Trenching operations involve the removal of soil to create a trench or canal that subjects workers to hazards from collapsing soil. This hazard is inherent to the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction again, making it appropriate to include the trenching within the scope of these classifications. In addition to the above, WCIRB staff noted that both insurers and the WCIRB have consistently assigned trenching operations consistent with the R & I guidelines. In consideration of the above rationale, as well as the fact that the common practice has been to classify trenching operations consistent with the R & I guidelines, the WCIRB determined that the existing classification procedure is consistent with the objective of ensuring that each standard classification represents a distinct industry engaged in a relatively homogenous set of activities. Water and Sewer Main Construction: 5

8 In addition to those operations described in the above R & I entry, staff also evaluated whether the same classification procedure should be extended to specialty trenching when conducted in support of the construction of gas or water mains. Currently the trenching operations conducted by a specialty contractor in connection with the construction of a gas or water main are assigned to Classification 6218(1)/6220(1), Excavation. Gas mains are frequently installed in a joint trench used for electrical, telephone, and gas service. Water mains are also typically in joint trenches and set above the deeper sewer line. The current classification procedure for specialty trenching when conducted in support of the construction of gas or water mains is based upon an understanding that while construction of canals, cross-country water pipelines, oil or gas pipelines, and sewers all require trenches deep enough to require shoring gas and water main trenches tend to be shallow thus not requiring shoring. (Shoring is typically required of trenches deeper than 5 feet.) This is borne out in the May 14, 1965 Bureau Circular (Exhibit 2) which provides that the excavation of shallow trenches for the installation of wires, cables, pipes, etc, remains assignable to the excavation classifications. It should be noted that the current practice of assigning Classification 6218(1)/6220(1), Excavation N.O.C., to specialty trenching when conducted in support of the construction of gas or water mains has not resulted in any classification or audit disputes. Recommendation In order to clarify the classification treatment applicable to trenching operations by specialty contractors, the WCIRB proposes that a footnote be added to Classifications 6218(1)/6220(1), Excavation N.O.C., and 6218(2)/6220(2), Grading Land N.O.C., to indicate that trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. The WCIRB does not anticipate that any employers will be reclassified as a result of this clarification. In view of the above, the WCIRB recommends that the following changes to Part 3 of the USRP be included at the time of the next pure premium rate filing. 6

9 Proposed Changes to the California Workers Compensation Uniform Statistical Reporting Plan 1995 Related to Classifications 6218(1)/6220(1), Excavation N.O.C., and 6218(2)/6220(2), Grading Land N.O.C. Recommendation Amend the footnote to Classification 6218(1), Excavation N.O.C., to clarify the classification applicable to certain trenching operations. PROPOSED EXCAVATION N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage does not equal or exceed $25.00 per hour Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. Trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. 6218(1) * * * * * * * Recommendation Amend the footnote to Classification 6220(1), Excavation N.O.C., to clarify the classification applicable to certain trenching operations. PROPOSED EXCAVATION N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage equals or exceeds $25.00 per hour Assignment of this classification is subject to verification at the time of final audit that the employee s regular hourly wage equals or exceeds $25.00 per hour. The payroll of an employee whose regular hourly wage is not shown to equal or exceed $25.00 per hour shall be classified as 6218(1), Excavation N.O.C. Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. Trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. 6220(1) * * * * * * * 7

10 Recommendation Amend the footnote to Classification 6218(2), Grading Land N.O.C., to clarify the classification applicable to certain trenching operations. PROPOSED GRADING LAND N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage does not equal or exceed $25.00 per hour Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. Trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. 6218(2) * * * * * * * Recommendation Amend footnote to Classification 6220(2), Grading Land N.O.C., to clarify the classification applicable to certain trenching operations. PROPOSED GRADING LAND N.O.C. including borrowing, filling or backfilling employees whose regular hourly wage equals or exceeds $25.00 per hour Assignment of this classification is subject to verification at the time of final audit that the employee s regular hourly wage equals or exceeds $25.00 per hour. The payroll of an employee whose regular hourly wage is not shown to equal or exceed $25.00 per hour shall be classified as 6218(2), Grading Land. Mass rock excavation, grading or excavation in connection with street or road construction, pile driving, shaft sinking, caisson or cofferdam work shall be separately classified. Trenching operations conducted by specialty contractors in connection with the construction of canals, irrigation systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction shall be assigned to the corresponding construction classification. 6220(2) * * * * * * * 8

11 Recommendation Staff recommends amending the following entry in the Rulings and Interpretations Supplement of the California Workers' Compensation Uniform Statistical Reporting Plan 1995 for clarity. PROPOSED Rulings and Interpretations Supplement Classification Matters Trenching 6220(1) Excavation equals or exceeds $ (1) Excavation less than $25.00 Trenching operations by specialty contractors shall be assigned to Classification 6218(1)*, Excavation N.O.C., or Classification 6220(1),* Excavation N.O.C., except when such trenching operations are in connection with the construction of canals, irrigation systems, drainage systems, cross-country water pipelines, oil or gas pipeline construction or sewer construction. In such cases, trenching operations shall be assigned to one of the following classifications: Classification 6361(1), Canal Construction all operations Classification 6361(2), Cross-Country Water Pipeline Construction Classification 6364, Irrigation Pipe Installation Classification 6233, Oil or Gas Pipeline Construction Classification 6307*, Sewer Construction Classification 6308*, Sewer Construction *(Subject to regular hourly wage of the employees see actual classification phraseologies.) * * * * * * * 9

12 10 Released: July 12, 2007

13 11 Released: July 12, 2007

14 12 Released: July 12, 2007

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