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Workers Comp Audit...

 
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Old 05-17-2019, 07:24 PM   #1
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Workers Comp Audit...


This will be our first year going through a WC audit. What can we expect? I've seen many GCs carry workers comp, but don't really report it properly and pay a lot of their guys in cash anyways so nothing is really on the books. How do you guys go about WC and reporting etc..
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Old 05-17-2019, 07:56 PM   #2
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Re: Workers Comp Audit...


If you don't require subs to submit COI's with work comp prior to cutting a check to them, it's time to start screaming for them, and you'll learn to do this next year.

In my case it's an annual form and I have to provide both company financials with certain reports from quickbooks, along with COI's confirming that everyone I paid during the period carried WC.

It's a complete PITA but necessary so they can determine your actual exposure for the period.

Takes me about 3-4 hours every year and now you've reminded me that mine is coming up next month...

I learned the hard way a long time ago about not requiring COI's prior to writing a check or even asking for them. A tile guy submitted his COI after the fact years ago, and didn't have work comp and I had to pay what he would have had to pay---nearly $1200.

Your experience may differ. If you only have employees and don't sub out work, it should just be a matter of sending in some quarterly payroll reports and they'll just do their math.

ALWAYS check their work on their audit report though. Even though it's their job, they can be sloppy with their numbers.

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Old 05-17-2019, 09:49 PM   #3
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Re: Workers Comp Audit...


I was using one or two subs when needed, and was always chasing down a copy of their insurance, it was always something. Then i knew the term "sub" was very loosely interpreted by me. The audits made me decide to take on those subs as employees, now I do not use any subs, no more worries about someone questioning whether they are a true sub or an employee.
The audit now just involves some a straight forward questionaire and payroll reports, my accountant handles those.
The audits from my insurance company are far more time involved.
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Old 05-17-2019, 10:05 PM   #4
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Re: Workers Comp Audit...


Yeah in most cases if you sub work they have to have Worker’s Comp. as well otherwise you have to pay on their behalf even though they are not your employees


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Old 05-17-2019, 10:38 PM   #5
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Re: Workers Comp Audit...


Try asking for an audit-by-mail. Much easier than taking time out of your day to meet some dude.

Be prepared for the possibility of you owing money after the audit.

It’s the year end round-up where the carrier says, “the broker wasn’t charging you enough, you owe us $___”.

No good deed goes unpunished I guess.


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Old 05-17-2019, 10:53 PM   #6
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Re: Workers Comp Audit...


Quote:
Originally Posted by Caleb1989 View Post

Be prepared for the possibility of you owing money after the audit.



No good deed goes unpunished I guess.


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Yea especially since my comp rate is 26%

Chit aint cheap


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Old 05-17-2019, 11:33 PM   #7
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Re: Workers Comp Audit...


Ya’ll are making me nervous. I got a refund last year.
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Old 05-18-2019, 12:43 AM   #8
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Re: Workers Comp Audit...


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Originally Posted by Windycity View Post
Yea especially since my comp rate is 26%

Chit aint cheap


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Where are you located that you are paying 26% WC?
What type of work do you do?
You guys need to know that each job of an employee is at a different rate so if you have a laborer that is at a lower rate than a framer etc. Same with painters or office help. Each has it's own rate. The audit is to determine your overall payroll so you can be charged accordingly. Around here the rate for a carpenter is 14.96%
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Old 05-18-2019, 12:44 AM   #9
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Re: Workers Comp Audit...


Workmans comp is a joke. It is a way for the state and the insurance co's to hijack your business. God forbid anyone actually gets hurt.....it goes to litigation before they coin up and the lawyers get greased.

It's long been time for reform because as it is now it's a racket
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Old 05-18-2019, 05:34 AM   #10
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Re: Workers Comp Audit...


Quote:
Originally Posted by Irishslave View Post
Workmans comp is a joke. It is a way for the state and the insurance co's to hijack your business. God forbid anyone actually gets hurt.....it goes to litigation before they coin up and the lawyers get greased.

It's long been time for reform because as it is now it's a racket


Comp saved my ass. Had a guy fall. Covered all the hospital bill that included a few surgeries and even paid him for a year after since he couldn’t work. Only went up a little bit for a year or so after. No lawyers involved.


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Old 05-18-2019, 05:38 AM   #11
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Re: Workers Comp Audit...


Quote:
Originally Posted by Irishslave View Post
Workmans comp is a joke. It is a way for the state and the insurance co's to hijack your business. God forbid anyone actually gets hurt.....it goes to litigation before they coin up and the lawyers get greased.

It's long been time for reform because as it is now it's a racket
Actually it's not. I had a claim a few years ago and wc paid with absolutely no issues. Zero deductibles and lost time. And my rates did not increase.

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Old 05-18-2019, 09:24 AM   #12
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Re: Workers Comp Audit...


Quote:
Originally Posted by NYgutterguy View Post
Comp saved my ass. Had a guy fall. Covered all the hospital bill that included a few surgeries and even paid him for a year after since he couldn’t work. Only went up a little bit for a year or so after. No lawyers involved.


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Quote:
Originally Posted by TxElectrician View Post
Actually it's not. I had a claim a few years ago and wc paid with absolutely no issues. Zero deductibles and lost time. And my rates did not increase.

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Definitely good to have when you need it... I could be wrong but I think he was more referring to the insurance company climbing into your pocket to get paid by proxy for someone else's business expenses AFTER the fact for someone else's coverage... They should be getting that money from them if it was legit...
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Old 05-18-2019, 12:07 PM   #13
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Re: Workers Comp Audit...


Quote:
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Workmans comp is a joke. God forbid anyone actually gets hurt.....it goes to litigation before they coin up and the lawyers get greased
My reading comprehension is pretty good Kap.

Not my experience.

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Old 05-18-2019, 12:43 PM   #14
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Re: Workers Comp Audit...


Mine averages about 7%, but then got a 30% refund because in the state claims were down and it's run as a non profit I believe. I got audited and got in trouble for not having my employees keep their own records. They didn't charge me or raise my rates because my records were pretty good.
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Old 05-18-2019, 02:44 PM   #15
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Re: Workers Comp Audit...


Quote:
Originally Posted by dave_dj1 View Post
Where are you located that you are paying 26% WC?

What type of work do you do?

You guys need to know that each job of an employee is at a different rate so if you have a laborer that is at a lower rate than a framer etc. Same with painters or office help. Each has it's own rate. The audit is to determine your overall payroll so you can be charged accordingly. Around here the rate for a carpenter is 14.96%

Illinois

Mason contractor

I asked about different rates and since i am a speciality contractor that only does one trade the rate is the same, laborers are up on the scaffold with bricklayers and we are all at a higher risk just like roofers and ironworkers



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Old 05-18-2019, 02:46 PM   #16
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Re: Workers Comp Audit...


Quote:
Originally Posted by Irishslave View Post
Workmans comp is a joke. It is a way for the state and the insurance co's to hijack your business. God forbid anyone actually gets hurt.....it goes to litigation before they coin up and the lawyers get greased.

It's long been time for reform because as it is now it's a racket


Workers comp saved my dads ass when one of his bricklayers fell off a two story chimney scaffold and shattered his leg... thankfully the guy didn’t get killed or paralyzed but he was out of work for several years , of course partially scamming the time off doing side jobs

But workers comp covered everything


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Old 05-18-2019, 03:29 PM   #17
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Re: Workers Comp Audit...


I just had an employee fall 3 weeks ago and broke his heel. Needed surgery and rehab. Will be off a total of 10 to 12 weeks. This was our first claim that resulted in time off. I will have to wait and see how the rate goes.
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Old 05-18-2019, 04:47 PM   #18
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Re: Workers Comp Audit...


Knock on wood! I've only had one small claim. An employee 2 years ago cut a knuckle with a utility knife. Difficult to stop the bleeding and was more of a nuisance than anything every time he moved his fingers.

My work comp covered his ER visit, and offered more (therapy and back pay) but he declined and was back at work the next day.

It was nearly a $1200 bill! Yikes! I sleep better even though a bit poorer knowing that anything like this is covered.
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Old 05-18-2019, 04:54 PM   #19
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Re: Workers Comp Audit...


This hospital bill was over 65k. Not sure what they actually settled on. He was in there for a 4 days I think plus multiple surgeries. Also $400 a week for about a year. Really got lucky with this time.


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Old 05-18-2019, 07:58 PM   #20
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Re: Workers Comp Audit...


We are suppose to collect an ST-9 tax identifaction form for non corporations that we 1099.

So these people are my exposure. If I pay for their service through Top Notch..... which is the only way I do so....then I need to collect COI from them as proof they are covered. If not they become an employee of mine and I pay a percentage rate on their check for the trade classification.

I always do mine via fax and over the phone for clarification

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