What Is A Workers’ Compensation Payroll Audit?

Different Types of Workers’ Compensation Audits

There are two main types of workers’ compensation audits. A voluntary workers’ comp audit is done by mail. Your insurance company sends you an audit form within 60 days of the policy expiration. You then complete the form promptly and return it. The form typically includes the classification codes shown on your policy and requests payroll information for each classification. In a voluntary audit, you are also asked to return tax reports and other documentation to support the payroll figures you provide. 

The second type of workers’ compensation audit is called a physical audit or field audit. In that scenario, an auditor contacts you to schedule a time to visit your place of business. It’s important that you get the audit scheduled soon after being contacted. In a physical audit, the same type of examination of your payroll information is performed. 

The type of audit conducted for your policy depends on factors like the nature of your business and the size of your premium. It’s important to comply with an audit request as soon as you receive it. Failing to have an audit conducted in a timely manner is a violation of your insurance agreement and will result in a higher premium and/or penalties being charged.