What is California Comp Authority?

California Comp Authority has 25 pages. See its app structure and page count in a summary based only on verified setup data.

Can a workers' comp audit result in a refund?

Yes. If actual payroll was lower than estimated, the audit can produce a return premium, subject to minimum premium rules.

What if I don't have payroll records by class code?

Reconstruct them from job duties before the audit. Missing records give the auditor no choice but to estimate, which usually costs more than organized records would have.

How do I avoid paying for subcontractors' payroll?

Collect a valid certificate of workers' comp insurance from every subcontractor before they start work, and verify coverage matches the scope.

California Workers' Comp Audit Checklist: How to Prepare and Avoid Surprises

Most workers' comp policies are audited at expiration. Businesses with organized records pay the right premium; businesses without them get surprised. This checklist covers what to prepare.

Last reviewed 2026-09-18•By CA Workers' Comp•Reviewed by Editorial Team

Key Takeaways

Audits compare estimated payroll at binding to actual payroll at expiration.
Organize payroll records by class code, not just by department.
Collect certificates of insurance from every uninsured subcontractor exposure.
Officer payroll, bonuses, and overtime have specific audit treatment.
Audit findings can be disputed—review the audit work papers before paying.

Why Workers' Comp Is Audited

Premium is an estimate based on projected payroll. Because actual payroll changes, carriers audit at policy expiration to true-up the premium. An audit can produce either an additional premium bill or a return, depending on how your estimate compared to reality.

The Audit Checklist

Gather: payroll registers and quarterly wage reports for the policy period, federal tax forms (941s, 940, W-2s), a list of owners and officers with their inclusion/exclusion elections, certificates of insurance for all subcontractors, and a description of each employee's actual duties by department.

How Payroll Is Treated

Auditors look at gross payroll, including bonuses and commissions. Overtime has a specific premium-pay treatment under California rules. Officer payroll is capped and requires proper elections on file. If records are missing, auditors may estimate—and estimates rarely favor the employer.

Subcontractors Are the Biggest Trap

If a subcontractor does not have their own workers' comp covering their workers, their payroll can be added to your audit as your exposure. Collect certificates of insurance from every subcontractor before work begins, and verify the certificates match the work performed.

Class-Code Accuracy

Auditors verify that employees performed the work their class code describes. If field staff did clerical work, or vice versa, payroll can be reclassified. Keep job descriptions current and document mixed duties so payroll can be split correctly rather than reclassified to the higher-rated code.

If You Disagree with the Audit

Request the audit work papers, check calculations and classifications against your records, and raise discrepancies with the carrier or your broker promptly. Errors are correctable, but disputed balances left unpaid can go to collection, so engage early.