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Honored Advisor

Worker's Comp Audit?

Our farmowner's policy always had some salary protection for our employees in it, but due to a huge lawsuit with our integrator and a contract grower's employee taking a disastrous fall, we ended up being instructed to carry comp last year.  Forked out a couple grand, and then did it again this year..so, not a dealbreaker, just another aggravating cost of doing business. 

Opened my mail yesterday to find a notice that my books will be auditted by some guy I'd never heard of, with a list of maybe ten different categories of stuff, much of which has nothing to do with payroll.  Not a very professional-looking notice, no letterhead, just a photocopy. 

Set a date (my birthday - Happy Birthday to me, I guess!) and time without asking, and said to leave my books with a responsible party if I cannot attend.  Fat chance. 

I understand that comp is a pool of insurance, and that there is some interest in seeing that employers adequately cover their employees; but, it would seem someone who is conducting such business could afford a real letterhead.  Looked like something on the order of a scam to me. 

Is this how comp audits are done? 

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9 Replies
Advisor

Re: Worker's Comp Audit?

In my state  I don't have to carry a separate comp policy because I only have one employee and he is covered by my farm policy with a separate disability policy.  He is actually covered better for less because hthe disability policy covers him 24/7..

 

I think if I were you I would contact whomever I get my comp through and ask for a verification this is legitimate.

 

What type of info are they asking for?  My former employer got audited by Workman's Comp one time and they tried to reclassify mosts employees to a higher rate job description.  It took him some arguing to keep from really gettting expensive.  They wanted to rate the service guys as sheet metal workers with a 23% rate.

 

I just sent Social Security a response yesterday.  They asked for verification of income of my employee.  I told them I had filed all that information in a timely manner with the IRS and with new privacy laws I was not comfortable releasing anything without a signed consent from him.  They have not responded yet.

illfarmr
Senior Reader

Not a big deal

Been thru one yearly for six years. When you took out the policy, you ESTIMATED how much salary you would be paying that year. The rate is based on a charge of so much per hundred dollars of payroll. After the end of the year, they stop by to see how much your payroll really was, and adjust the premium for the past year. Sometimes you pay more, sometimes you get a refund on a portion of your premium. They are wanting to make sure you didn't claim a twenty thousand payroll when it was sixty thousand.

 

The auditor may not work for the carrier, just call your agent.

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Veteran Advisor

Re: Worker's Comp Audit?

All I can say is good luck & have your acct. handy-

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Highlighted
Honored Advisor

Re: Not a big deal

Thanks for the input.  I tried to reach my agent, but he had left for the day.  I REALLY hate to say this but the women in that office are not very informative. 

I understand the reason, and the math, but this was the most unprofessional mailing I have ever received from a supposed professional, and it was basically demanding access to a lot of records that have nothing to do with payroll. 

I did follow with the insurance carrier's customer service, and they did claim the guy.  That lady did say she wished to see the mailing, which was what really put me off.  I dropped it into the mail to her this morning. 

In retrospect, I am glad we did some reorganization a couple of years ago, and the actual employer entity is very limited as to what it shows in terms of our assets and access to other info on our family and even our personal identities.  I have accepted that this has to be done, just wish he was more gentlemanly in asking for an appointment, and more precise about its timing.  I hate to sit around for half a day waiting for someone I do not really want to see....most especially when it's my birthday. 

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Advisor

Re: Not a big deal

If the date and time he selected is not convenient for you decline the appointment and suggest a couple different different dates and times .   You have to probably agreed to make "reasonable accomodations" for somethng like this, but who says you can't be the one who defines the term?  Explain you are a one person office and if you are not there an outsider is not permitted unsupervised access.  Then go enjoy your birthday.

 

I'm curious, what is he asking access to besides payroll records?

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NC Cattle
Senior Reader

Re: Worker's Comp Audit?

check your inbox

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Honored Advisor

Re: Not a big deal

Mike, there was a printed checklist of twelve things, I think, and he'd checked nine of them.  I did drop it in the mail to the customer service rep for the carrier, as she requested, yesterday, so cannot go back and refer to it. 

It was way more invasive than payroll records.  Fortunately, I have those fairly well isolated from the rest of our enterprises.  I ought to be able to show him one ledger, last year's 943/w-3, and that is about all he needs to verify what I paid people for the coverage period. 

I am reconciled to spending my early morning of my birthday with him this year.  At least he's not giving me irrigation equipment for my present, which is what I used to get every year...this year, it's new interior walls for my hog houses.   Could have had my Cooper Mini S for those!!!!

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Frequent Contributor

Re: Worker's Comp Audit?

He will want to see proof of insurance for every single sub- contractor you used.  Electritions , plumbers , grain bin repiar , tractor repair, custum work etc.  I had an audit several years ago, now they just send me a form for a self audit.  They told me if I did not have insurance certification from every sub I would have to pay comp on them too.  For example, custom forage harvesting at 480 an hour times what every percentage your insurance is.    Make sure you get the insurance proof up front.

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Honored Advisor

Re: Worker's Comp Audit?

The proofs of subs' comp was one of the things they listed.  The LLC we run the hog farm under does not hire any subs. 

All the repairs on the place that we cannot do ourselves - which is not very many at all in a year, since my husband is very accomplished at fixing things after fifteen years of maintaining the buildings - come due billed to the the LLC that owns the farm. 

I am hoping that this method of organization makes things simpler tomorrow.  I'd like to think that the way we set up this system of ownership and operation, for different reasons, will work well for this one, too.  

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