R & R Tree Service vs. SAIF Corp.

Pursuant to OAR 836-042-0060, absent verifiable payroll records maintained by the employer that disclose a specific allocation for each individual employee, the entire payroll of the employee shall be assigned to the highest rated classification exposure.

R & R Tree Service sought review of an order upholding a 2008 final premium audit result by SAIF Corp. SAIF determined that all of R & R's payroll should fall within classification Code 0106, which resulted in an increase of R & R's premium by $67,516.11. When a business involves multiple jobs with different risks, the employer may qualify for multiple classifications for its employees if it meets recordkeeping requirements. Absent the records, the entire payroll shall be assigned to the highest rated classification exposure. R & R's business provides lawn maintenance and tree pruning and removal. Generally, on-the-ground yard maintenance activities fit within Code 9102, and above-ground tree pruning and removal fit within Code 0106. However, any on-the-ground tasks connected with above-ground tasks are to be classified by the higher-risk code. Although the auditor found the employees' records verifiable, they were insufficient to support a payroll division between the two codes, as they did not adequately differentiate between duties performed. Based on the extent of the errors the audit revealed, the Court of Appeals concluded that the director's order was supported by substantial evidence. Affirmed.