Current through Register Vol. XLI, No. 50, December 13, 2024
Section 85-10-6 - Extent of Liability6.1. The liability which the primary contractor incurs, under the provisions of W. Va. Code § 23-2-1d, is the obligation to pay to the commission the true and correct amount of premium taxes, premium deposit, late reporting and payment penalties, and any interest thereon, as well as administrative charges and attorney fees and costs of any actions, that the subcontractor owes to the commission.6.2. In determining the amount of payments due to the commission, the commission is not limited to the amounts of gross wages reported by the subcontractor. Rather, the commission may audit the wage records of the employer or other pertinent records and determine for itself the amounts owed to it. From this audit, the true and correct amount of premium taxes, premium deposit, interest and late reporting and payment penalties will be determined in calculating the primary contractor's liability.6.3. Under the provisions of W. Va. Code § 23-2-1d, the primary contractor is liable only for the payments due from the subcontractor for those employees who are performing work under its contract. Payments for gross wages for employees who are engaged in other work for the subcontractor unrelated to the contract in issue will not become the liability of the primary contractor.6.4. If the same employees of a subcontractor split their time among a number of jobs some of which are not related to the contract in issue, then the liability imposed by this rule extends only to payments due for the gross wages earned as a result of working under the contract in issue. It shall be the primary contractor's burden to prove that employee(s) of a subcontractor split time among jobs which were not related to its contract with the subcontractor.6.5. If the subcontractor's default occurs because of a breach of a prior reinstatement agreement, then under the terms of the agreement the full amount of the liability becomes due. However, in this event, the primary contractor will not be liable for any portion of the reinstatement agreement's liability which arose prior to the term or extension of the contract including any interest due on the principal of the agreement which was earned during the term or extension of the contract after the effective date of this rule.6.6. In the event that the primary contractor makes payment to the commission in the place of the subcontractor, then the primary contractor has a legal right to seek reimbursement or indemnification from the subcontractor for the amounts paid on its behalf to the commission. In addition, the primary contractor may recover its costs of action and attorney fees in seeking such reimbursement or indemnification. Such legal right is not subject to resolution by the commission. Recovery must be made from the subcontractor or through the state's judicial system.