Use these five tips and your workers compensation audit will go faster and smoother and lower your risk of being overcharged.
I am sure you can’t wait for the workers compensation auditor to show up and start asking questions and looking for all sorts of information. It can feel very invasive because they are asking for really personal information that you normally never share with anyone. While they are asking about payroll tax forms, records and different things like that, you’re thinking to yourself… this person is really trying to get into my business. But really, it’s not as complicated as you may think.
Below are five ways that you can prevent yourself from being overcharged on your workers’ comp audit. I also have a download. It’s a free guide that we’ve created to how to survive your work comp audit and how to not be overcharged. Click here to download our Audit Preparedness Kit.
941 Payroll Taxes
When the auditor asks you for your 941 payroll tax reports, they’re not asking you for anything out of the ordinary. This is what they’re going to use to make sure that the payroll on your payroll reports matches what was paid to the employees. Before the audit visit, make sure to pull those payroll tax quarterly reports and have them ready to go.
Subcontractors Certificates of Insurance
The auditor is going to ask you about certificates of insurance on subcontractors. If you sub out some of your work, you need to be ready. They’re going to want to make sure that you have certificates of insurance from those people. Unfortunately, if you don’t have them they’re going to charge you for that subcontractor payroll. Make sure that anytime you’re hiring somebody to do anything for your business that you get that certificate of insurance from them. Otherwise, you will have to pay workers comp on that payroll.
Job Category Classification
Be sure to classify people based on their job category, not their specific duty. For example, if you have somebody at your company who is a welder, don’t classify them as a welder, classify them as production. Whether they’re doing welding, whether they’re doing fit and finish, whether they’re cutting wood, it’s all considered trailer or truck body manufacturing. Don’t get too specific into the actual job duty that they’re doing.
Make sure that you tell the auditor who the executives of the company are. There is a cap on the payroll that an executive has to pay from a comp standpoint, so be sure to include yourself if it makes sense. Make sure that all the executives are named and listed. If the auditor does not ask you for the names of the officers and executives of the company, then there’s a very good chance that you missed an opportunity to save money on your audit.
Don’t stress out. A lot of people, they worry about work comp audits. Audits naturally create anxiety, but if you know and understand the rules and you have an advocate on your side that does the same, you’re going to be fine.
Workers comp audits don’t have to be overly complicated or stressful. If you are organized and prepared, they should go smoothly. Even if there is some type of additional premium from an audit, don’t fret. Your broker should be able to work with you to try to get that number reduced. If you would like to discuss an upcoming, current or past workers comp audit, you can click here to schedule a call with Josh or call us at (478) 449-5928.