How do I become a workers compensation auditor?

Become a workers compensation auditor

The first thing you need to know is why you are requesting an audit. Ultimately, your workers ' compensation premium is determined by your exposures. Payroll (remuneration) and the total costs of uninsured contractors are the two basic types of exposure for a workers ' compensation policy. Your policy premium is based on an estimated exposure when your policy is first set up. This estimate should come from you after your insurance agent has informed you how an auditable policy works. Your estimate for the coming policy period should have been your best projection.

The audit will determine your actual exposure during the policy period shortly after your policy expires. After your insurance carrier has completed the audit of your workers ' compensation policy, they will prepare and send you a final audit statement. Due to the payroll adjustment as determined by the auditor, this statement will indicate any additional premium you owe or any credit you receive. Usually, within three months after the end of your employee compensation policy period, you should receive the audit billing statement.

So what's really the auditor looking for? Obviously, payroll is the answer. Payroll, defined as a term of compensation for workers, which includes payments as uninsured contractors to others.

You only need to make available to the auditor the items they ask for when preparing for your workers ' compensation audit. Don't give them more information or volunteer than they ask. Remember, the faster an auditor is able to complete his job and move to another audit, the better it is for you and them. Here are some of the items you may need to do your job;

Payroll Records to include:

• Journal of Payroll and Summary.
• Your book of checks. Try not to give them your book of checks unless it's the only way to keep records.
• Federal tax reports – 941 which cover the period of the audit.
• Reports of State unemployment and individual earnings.
• All overtime payments individually displayed

Employee Records:

• Include a detailed explanation of each employee's job duties.
• Include the number of staff.
• Worked hours, days or weeks every year.

Cash Disbursements showing:

• Subcontractor payments.
• Materials
• Casual Labor

Certificates of Insurance:

• For All Subcontractors.
• For All Independent Contractors.
• A detailed description of your business operations.

Employee compensation audit is a policy provision as outlined in the compensation policy of your employees. A contractual duty. One you agreed to when you purchased the compensation policy for your workers. Must you cooperate or obey? No… But if you don’t comply you give the insurance company the option to apply additional latitudes. If an audit is not completed, or if you are deemed to be uncooperative in completing the audit, an insurance company is allowed to use estimated audit figures and guess what, the insurance company is the one who comes up with the estimate. So here we go to a workers compensation audit.