Workers Compensation Tips to Make Audits Easier

If you have Workers Compensation, don’t be surprised by some guidelines that could impact your business at audit time if you include yourself for coverage as an Executive Officer, Partner, LLC Member or a Sole Proprietor.

Every year guidelines are published that place a minimum and maximum payroll allowable for each leading role in a company; those amounts are as follows:

• Executive Officer: $52,000 (min. payroll), $208,000 (max. payroll)
   
• Partner: $7,200 (min. payroll), $52,054 (max. payroll)
   
• LLC Member (Executive Officer annual min/max or Partner annual Limitation depending on tax filing status)

Sole Proprietor: $7,200 (min. payroll), $52,054 (max. payroll)Remember that these payroll figures are used regardless of whether or not you make the minimum on the books. In addition, they essentially classify you in the class code for the work you do. For example, if you work as a carpenter, you can enter the carpentry classification and be billed accordingly.

It is extremely important to determine the classification and payroll you will be charged so you don’t experience a HUGE audit at the end of the year. Remember that you typically have the option to REJECT workers compensation coverage, but you must complete the proper form and make sure the insurance company receives it in time.