Preparing for a Worker's Compensation Audit
Just the mention of a workers' compensation audit engenders fear into the heart of man. Is your Massachusetts business scheduled for a workers' compensation audit? There is no need to dread it or be fearful. A small amount of preparation and common sense can save you a lot of aggravation and money.
Devoting a few hours of your attention now can save you a lot of time in the future. You need to give your full attention to the auditor and remain with him/her throughout the entire process. The process may take a couple of hours to complete. So, make sure that the time and date of the scheduled audit is convenient for you. Call to reschedule the audit if it has been scheduled at an inopportune time.
Begin to collect and organize payroll records, overtime payroll records, classification divisions, and insurance certificates as soon as you learn of the audit. This should give you plenty of time to compose a summary of each, which will help you to better communicate important data during the audit process. Information that is well organized will also expedite the process. If you can reconcile your calculations to payroll records, such as W2's and payroll stubs, the auditor might be more comfortable trusting your data.
You will also want to make any needed adjustment to payrolls; for example, subtracting bonus pay from overtime pay. If applicable, you will need to apply the maximum and minimum payrolls to the calculations. This part may take a little research, since the minimum and maximum will vary based on state; career; and even among sole proprietors, partners, and executive officers.
Before the audit, you should apprise yourself on the different employee job classifications and make sure that each employee is correctly classified. This is a key element to ensure that the audit flows smoothly. If there is any question about how to classify an employee, call your broker or agent. The auditor is most likely going to be asking you about the classification and job duties for multiple different employees. So, be prepared and armed with knowledge.
One last important preparation is concerning subcontractors. Payments issued to subcontractors can go against your workers' compensation in the event that the subcontractor did not have a certificate of workers' compensation. You can get a copy of the certificate, but make sure that it is current and shows coverage during the time the subcontractor worked for you.
Once the audit arrives, you will be glad that you took a little time collecting, organizing, and summarizing your information. You will also find that the auditor is not a nemeses, especially when you provide honest answers and organized paperwork.
At the conclusion of the audit, ask the auditor for the audit worksheet. Ask your broker or agent to review the accuracy of the final audit. You have a legal right to ask for a corrected audit anytime you think there were any errors. If any overpayment was made under the last three preceding audits, you also have a legal right to recover it.
If you are looking for a Business Insurance Agent in Massachusetts, consider Elliot Whittier Insurance in Danvers & Winthrop MA. Call today 800-696-3947
Elliot Whittier Insurance Services, LLC is a local Trusted Choice® agency that represents multiple insurance companies, so it offers you a variety of personal and business coverage choices and can customize an insurance plan to meet your specialized needs. You can visit Elliot Whittier online at www.ElliotWhittier.com, email email@example.com, or call 800-696-3947.