Bryant & Associates Insurance Bryant & Associates Insurance

 

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  8:30am to 5:00pm
  Monday-Friday

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4920 N. Meridian
Oklahoma City, OK 73112

(405) 942-5555    (800) 841-2664

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Preparing for a
Workers' Compensation Audit

The next time you are scheduled for a workers' compensation payroll audit, be prepared. It could save you time and a considerable amount of money. Listed below are a few helpful audit hints.

Prepare For The Auditor
Always have your payroll reports, classification divisions, certificates of insurance and overtime payroll summarized before the auditor's appointment. Often the auditor will simply use your calculations if they are well organized and can be reconciled to payroll stubs, W2's or other payroll records.

Set Appointment That Meets Your Schedule
Never permit the auditor to set an appointment date and time that is not good for you or the business. The audit can take up to two hours and it is important that you stay with the auditor throughout the duration of the audit.

Proper Representation Of Classifications
It is important that you represent the exposures that correctly fit your business. From a technical standpoint, if an employee works 10% of the time in outside sales and 90% in the office, the auditor can charge 100% of the payroll for that employee to the outside sales classification, the higher rated class. It is important that you put each employee in the proper class. The auditor will typically quiz you about the job duties of certain individuals. If you have a question on proper classifications, call your agent.

Maximum And Minimum Payrolls
Effective 1/1/96 the maximum payroll for executive officers increased from $93,600 to $104,000. The minimum payroll increased from $11,856 to $13,052. The minimum payroll for sole proprietors or partners increased from $36,100 to $37,600. Be sure to apply the maximums and minimums if applicable. These maximums and minimums may vary slightly depending on the carrier and depending on the state.

Overtime
Make sure you adjust payrolls, deducting the "bonus" pay from any overtime.

Certificate Of Insurance
Payments to any subcontractor that does not have a certificate of workers' compensation insurance, may be charged against you as payroll. Be sure the certificate is current for the audit period.

Corporate Officers
In Oklahoma, any active owner of 10% or more has an option to either include or exclude themselves for coverage. If any owners wish to exclude themselves, a signed exclusion form is required and should be kept on record just like a certificate of insurance. The auditor should waive the payroll exposure with this signed form.

Worksheet
Always request the audit worksheet from the auditor.

Audit Corrections
If you feel that you were overcharged on past premium audits, you have the right to request a corrected audit and recover any overpayments made during the preceding three audit periods.

Independent Agent or Broker
If you are represented by an independent agent or broker, they should check the final audit for accuracy. The audit should be checked against the current policy and against the general liability audit, making note of any discrepancies in payroll estimates and classifications. They should also check the accuracy of your experience modifier and make sure that the proper modification factor is used on the audit. If you have questions on your audit, call your agent, that's what they are there for.

 

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Bryant & Associates Insurance