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Author Topic: Wage Segregation & 6204 with NPD  (Read 6623 times)
 
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AuditorLisa
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« on: July 23, 2008, 04:54:06 PM »

I would like to have your opinion........

I have an operation that drills for water. 

One crew builds the base and installs a temporary scaffolding and temporary crane (lift). The lift is used to lower the drilling rods and the well hole liner.  They complete all operations of the drilling. So no problem code 6204.

Another crew comes in and installs the pump using the lift.  No problem again 3724.

Here's the rub, the millwright persons teardown the removable scaffolding and the lift which is returned to the yard and reused by the drilling crew. 

What are your thoughts on if this is included in the 3724 code and/or possible argument for inclusion into the drilling class.
« Last Edit: August 09, 2008, 01:44:56 PM by auditor1, Reason: changed Subject heading » Logged
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« Reply #1 on: July 24, 2008, 08:29:36 PM »

Hi AuditorLisa!

This is an interesting case you have here.  I'm at a disadvantage in that I don't have any first hand experience with this code, but here are my thoughts...

Per the class guide, the classification wording for code 6204 was amended effective 1-1-04 for clarity per the Classification and Rating Committee Minutes dated 06/17/2003.  Prior to 1-1-04, the classification wording read:
Quote
Drilling–N.O.C.–not geothermal, oil or gas producing, mining or quarrying–N.P.D.
...but, since 1-1-04, the wording now reads this way:
Quote
DRILLING - N.O.C. - not geothermal, oil or gas producing, mining or quarrying

At a particular job or location, this classification shall not be used for division of payroll in connection with any other classification (other than the Standard Exceptions or General Exclusions).
This doesn't change the original meaning, it simply clarifies it. 

See also entry number 7 in the Memorandum for the 2004 USRP which lists 10 mercantile and construction or erection classifications (including 6204) that were amended as a result of this C&R to clarify that the intent of the NPD restriction was to apply on a location or job basis.  So, for example, if the insured had a job where all they did was install the pump on an existing drill rig, code 3724 would apply; however, 6204 would apply to all operations conducted on the same job or location where the insured also set up the drill rig.  Another of these 10 codes is 5212 Concrete Pumping.  If an insured's crew conducts flat work, they cannot segregate payroll for pumping operations on the same job or location - all payroll would go 5201/5205.  If they conduct concrete pumping jobs for a fee now and then, 5212 could be assigned to those jobs.
 
So, it appears to me that 3724 is not applicable to any work conducted at the same job or location where 6204 activities are conducted.

I hope this helps. Wink
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« Reply #2 on: July 25, 2008, 09:36:09 AM »

Excellent! You saw right through the scenario!

I totally missed it the first time. I didn't even get it for whole 24 hours i'm sad to say. 

Classification 101, read your class wording IN TOTAL!  Use all available tools, and don't limit your research to answering just one question.

Thank you for posting! I almost had to post my own answer! But you did it much more eloquently than I ever could have. 

My co-workers love it when I have mental meltdowns!

Thanks again! 
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« Reply #3 on: July 25, 2008, 10:35:09 AM »

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This applies
here.  Don't feel bad, you didn't have a melt down.  These things can be a challenge to the best of us.  As you can see from my delayed response, it took me a while to work through it too Wink
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« Reply #4 on: August 13, 2008, 10:41:25 AM »

OM GOSH!  I felt I had a really good grip on this situation.  but alas.....  I spoke with a couple of the classification guru's at the bureau and here is what I learned. 

The wording....
Quote
At a particular job or location, this classification shall not be used for division of payroll in connection with any other classification

Is only applicable to any operations involving the site set up and all operations associated with the drilling. 

It does not contemplate installation of pumping equipment. They (the bureau) see this as separate activity and not one associated with the drilling activity. hummmmm.



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« Reply #5 on: August 13, 2008, 11:00:20 AM »

Oh, that's interesting! Huh?

The footnote seemed pretty clear.  But, the Multiple Enterprise Rule does provide for separately rating operations that do not normally prevail in an industry.  Did they say that the installation of pumping equipment doesn't prevail in the drilling industry?  I would think that drilling wouldn't accomplish much without the actual pumping component of the process.

What did they say about the millwrights who tear-down the scaffolding?
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« Reply #6 on: August 13, 2008, 06:13:50 PM »

I'll let you know the outcome.

As of right now, there are even more questions regarding a multitude of activities that occur at the "site".  I have requested a bureau inspection due to a multitude of widely varying and unique operations being performed that occur at times prior to, during and after the "drilling".   

My experience has mainly been in oil fields and the wide range of processes involved in this operation are not familiar to me. 

Hopefully we can all learn a little something.

I'll report back.

 
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« Reply #7 on: August 14, 2008, 11:34:58 AM »

That'll be great - thank you AuditorLisa  Wink
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