I work alone. The auditor has requested payroll records and because I have no employees, I have no payroll records. Is the audit still necessary?
Yes. The auditor will need to verify that you work alone. To do that, they might look at disbursement records, check stubs or income tax returns. They are also required to look for and review your relationship with any independent contractors you used during the policy period.
I canceled my policy and no longer have insurance with your company. Do I need to be audited?
Yes. The purpose of the audit is to review your actual business activity for the time period your policy was still in force.
What can I do to save money on my insurance premiums?
If you maintain detailed records, the audit process will be much smoother and will work to your advantage. Credits are available on the audit for pay types such as premium overtime, tips, severance pay and third-party sick pay. However, your records must provide a summary of these items by employee and department to allow the credit.
If you’re a contractor, your policy might allow a split of an employee’s wages between different types of jobs.
Your records should indicate what type of jobs each employee completed during your policy term and how much was paid.
With this breakdown, we may be able to allow the use of more than one class code. Without this breakdown, State Manual rules require that we must include all wages in the highest-rated class that applies to any portion of your work.
How are the owners classified in the audit?
Owners, officers, partners and members can elect or nonelect coverage under your Workers Compensation policy depending on the type of entity insured. The rules vary by state; your agent will be able to provide specific guidelines for your state.
If owners, officers, partners and members are covered under the policy, their wages will be included at either a fixed amount or an actual amount (subject to a minimum and maximum), depending on your entity type, policy type and state of operation.
Owners are classified according to their actual duties. You will be asked to provide a description of each officer’s duties.
What gives you the right to look at my books and records?
Your insurance policy is a legally binding contract between you and your insurance carrier. One of the conditions of that contract states, “You will let us examine and audit all of your records that relate to this policy.” See the policy insert, WC000000A, that was sent with your new business and renewal package for additional information.