Workers’ compensation audits are a routine part of having workers’ compensation insurance.
They verify your business’s operations and update your policy information to include changes in operations, new or closed business locations and any new ownership. These audits help your insurance company to determine the correct premium and other rates. Our social security lawyers have some basic information about what you will need for an audit.
When you are audited, you will typically need to provide State Quarterly Wage and Withholding Reports. These can include DES forms, 941 reports and payroll journals for the audited period. Your auditor should get in touch in advance to tell you what records you will need to have on hand. You may be asked to include additional records depending on the needs of the audit.
Wages and Benefits That Are Subject to Premium
Your premium calculations are based on gross, not net, payroll. Gross wages include all salaries, commissions, bonuses, paid vacation, holiday pay, sick pay, overtime base wages, the market value of gifts, any substitutes for money earned or paid during the policy period (e.g., meals and lodging in lieu of wages), automobile allowances and certain pension play payments.
Are Contractors Subject to Premium?
True independent contractors are not subject to premium, but their status is determined on a case-by-case basis by your insurance provider. If you use contractors, you will have to supply information about them, such as their business name, business license, a copy of your contract, their contractor’s license number, or other documentation.
Our Athens, GA lawyers note that you must keep information regarding contractors’ independent status. If you cannot supply this information during your audit, you may be subject to additional premiums.
If you are expecting a workers’ compensation audit, now is a good time to call Morgan & Morgan. We can help you review your policy and any changes that have occurred in your business that might affect your policy. From there, we can offer you advice on how to handle the audit.
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