Workers Compensation Audits: What They Are & How You Can Prepare

If you tuned into our radio show on Wednesday*, then you know that we were talking all about Workers Compensation Audits. If you missed the show or simply want to learn more, in today’s blog we’re going to continue the conversation on Workers Compensation Audits—what are they, why they happen, and how to deal with them.

*To hear more about this, don’t forget about our radio program on Saturdays!

Workers Compensation Audit? What’s that?

The term ‘Workers Compensation Audit’ refers to the practice of determining how much of your payroll will be subject to a premium charge, will focus on the classification of your employees to make sure that all information is correct, and will confirm that payroll for each employee’s job classification has been verified.

It may sound like nothing more than a huge pain, but when done correctly, these audits can ensure that you are receiving the most affordable coverage for your business, while also determining the premium of your workers’ compensation policy.

There are two types of audits performed: the Physical Workers Compensation Audit and the Voluntary Workers Compensation Audit. Whichever is requested of your company, be sure to respond immediately and complete the audit as soon as possible.

Why do they happen?

Workers Compensation Audits occur to better protect your business and employees. Two of the most common factors for an audit as follows:

-Inaccurate payroll estimation for the yearly policy period
-Uninsured contracted and sub-contracted workers

How can I prepare?

First, be sure to have all necessary paperwork and records readily available. This might include a payroll summary, checkbook, tax records, unemployment records, and individual overtime payments, as well as employee records, cash disbursements, and other certifications.

Be sure to keep all paperwork organized by job classification and up-to-date, particularly paperwork detailing overtime payments. Reflect payroll records in dollar amounts, and have all information readily available before the auditor arrives.

We know—selecting Workers Compensation policies and preparing for an audit can be incredibly difficult, confusing, and, let’s face it, frustrating. That’s why we’re here. Contact us for any more questions or concerns you may have.