Workers Compensation Audit Rules


Workers Compensation Audit

Reporting new employees and adding them to payroll is an important step in having workers’ compensation coverage. It is a false sense of security to secure workers’ compensation coverage, but to fail to report employees. Under-reporting can lead to potential criminal accusations against an employer, as well as lead to denials of coverage. 

Workers’ compensation audits can occur regularly in order for the carrier to have knowledge of the business, the type of employees, the amount of payroll, and other relevant pieces of information needed to provide the most accurate assessment of your business’ premiums.

A workers’ compensation audit can vary by state and insurer, but can come in the form of a mail audit, preliminary, telephone, field, interim, or test audit. Reverent Employer Consultants are prepared to help you however the audit may be completed.

Workers Compensation Audit Rules

Reverent Employer Consultants want to ensure that you are prepared before, during, and after the audit process. Here are some ways we can help management prepare for an audit.


  • Decide on who the primary contact person will be.
  • Review the original policy.
  • Review the website to see what is readily available to the auditor.
  • Address any potential issues early rather than later.
  • Ensure there is no incorrect or misleading information.
  • Review prior years’ audit billing.
  • If your company uses subcontractors or independent contractors, we will make sure that the 1099 certificates of insurance are on hand. This proves that they have their own Workers’ Compensation insurance.


  • Have a comfortable area provided for their workspace.
  • Try to keep the insurance auditor reviewing your records on-premises.
  • Be prepared to hand over any documents they request.
  • Do not show negative emotions when asked for any kind of documentation. This is a sign to the auditor that you could be hiding something.


  • Request a print out of the auditor’s worksheets. (This will usually not be provided unless asked for.)
  • Compare the statement to the original.
  • Ensure that Classification Codes do not include more expensive classifications than were on the original policy.
  • The Schedule Credit or Debit should not have changed from the original policy.

This can also seem very overwhelming and confusing. Therefore it is important to have someone like Reverent Employer Consultants on your side. Someone who is informed regarding these matters and when indicated, assists you in shopping for the best coverage and most reputable carriers available. Allow Reverent Employer Consultants to be there every step of the way.


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