Workers' Compensation Premium Audits in California
A workers' compensation premium audit reviews your payroll records, classifications, and operations at policy expiration to confirm the premium reflects actual exposure. The audit can result in additional premium or a return premium, so accurate records by class code are essential.
Key Takeaways
- Audits verify actual payroll and classifications against estimates.
- Results can mean additional premium or a return premium.
- Clean records by class code minimize variances.
- Subcontractor certificates prevent uninsured-sub charges.
What Happens During a Premium Audit
The carrier reviews payroll records, 941s, check registers, and certificates of insurance to confirm payroll by class code and that classifications match operations. Audits may be physical, phone, or self-audit depending on premium size.
What Payroll Is Included
Generally gross wages, bonuses, commissions, and certain allowances, with partial exclusions for tips and overtime premium under specific rules. Officer remuneration may be capped by class code.
How to Prepare
Keep payroll organized by class code, collect subcontractor certificates, document officer elections, and reconcile estimated versus actual payroll regularly. Good records turn audits from a surprise into a routine reconciliation.
Frequently Asked Questions
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