Audits of your workers’ compensation package are not an indication of suspicion of wrongdoing. They are merely part of the process, because your original premium was only an estimate based on your projected payroll and general exposure risks and operations. A workers’ compensation premium audit is an official check to see how reality has tallied with the estimates. The good news is that you can prepare for these audits.
Preparing for a Workers’ Compensation Premium Audit
Start getting ready ahead of time for your premium audit. Steps to take include:
- Gather paperwork and reports the auditor will want to see. Examples include tax forms, corporate information, ledgers, payroll reports, and unemployment tax returns.
- Understand what types of payroll, such as overtime premium pay, are allowed exclusion from workers’ compensation premiums.
- Instruct accounting employees and be prepared yourself to not answer auditor questions immediately unless you know the answers for certain. Instead, tell the auditor you will respond in writing after checking with the right people who can give accurate responses.
Having the necessary forms ready and being mentally prepared for the auditor makes the entire process easier for everyone.
After an Audit
After you get the results of your workers’ compensation premium audit, examine the results closely. There may be errors. This is a complicated process, and you may need help.
A specialized workers’ compensation broker can go over your results and help you understand them through a comprehensive analysis. Furthermore, a knowledgeable broker can offer suggestions for reducing your premium.