How to Avoid Workers Comp Audit Surprises

Most staffing company owners lose a little sleep when it comes to their Workers Compensation audits. Sometimes their anxiety grows as a result of some questionable classifications that they used during the audit period. Another reason could be that they may have inadvertently not correlated all the work comp premiums to their payroll tax records; especially if the have multiple offices to manage. So what is a staffing owner or financial manager for a staffing manager to do?

There are actually a few things that that can help you avoid any negative surprises and ensure your audit occurs without a hitch.

They include:

Throughout your audit period, work closely with your agent or broker in communicating with the insurance carrier when you want to utilize a new a work comp code. This communication will make your Agent and insurance carrier part of the process of managing your business during the audit period, instead of getting them involved after you have already selected a code and established pay and bill rates.
Confirm with your client the specific comp codes they use for each position.
Try to have all your communication with your carrier concerning rates and job descriptions in writing. By having this information documented, it will be easier to justify any new codes you used during the audit period.
Do an internal audit yourself before the insurance auditor comes to your office to review your company documents. By making sure that all your payroll reports match (withholding reports, SUTA reports, and Comp payroll reports) you will not only make the auditors job much easier, but you will demonstrate that you are managing your business well.

Finally, if you disagree with an auditors findings, there usually is an appeals process that is governed by the laws of your State and the rules of your insurance carrier. I have experience with clients who have used good documentation and have won their appeals which have saved them thousands of dollars.

Please feel free to comment on this article or call me for a more detailed discussion regarding this topic.

Best Regards,

David Schek
Work Comp Staffing Solutions– President
202-302-1212