The Ohio Bureau of Workers’ Compensation routinely conducts audits on state fund employers to confirm that payroll records submitted to the Bureau are accurate and that appropriate workers’ compensation coverage is being provided for the types of employees in a particular business. Following the audit, the Bureau of Workers’ Compensation could determine that there is a discrepancy between a company’s estimated premium and the actual/appropriate premium based upon current employee records. Under such circumstances, the company may be obligated to pay up to two years in past due premiums.
As the Bureau of Workers’ Compensation website indicates (www.Ohio.BWC.com), Bureau auditors are typically investigating the manual classifications assigned to different employees by a company; payroll records for corporate executives, partners, and sole proprietors; records regarding independent contractors; and appropriate classification of “clerical” workers.
The Ohio Bureau of Workers’ Compensation follows the classification and rating systems developed by the National Council on Compensation Insurance to set fair compensation premiums for different kinds of work performed, based upon actuarial data. Companies must make certain that they have correctly identified and updated manual classifications for their employees and, when appropriate, multiple classifications may be needed to appropriately describe the types of work being done by your employees. In addition, compensation for executives and sole proprietors can vary depending upon the type of business entity involved. Be advised that there are rules that define an “independent contractor.” In addition, “clerical workers” must be assigned, at all times, to nothing but clerical work.
If you receive notice that the Bureau of Workers’ Compensation is going to audit your payroll records, it may be worthwhile to consult a workers’ compensation attorney familiar with the audit process and appropriate classification of employees. You should always make certain that you have appropriate records available for the auditors and are prepared to answer any questions that might arise.
You should also keep in mind that you have the right to challenge the results of an audit by requesting a hearing before the Bureau’s Adjudicating Committee in Columbus, Ohio. Appeals of that proceeding can be taken to a higher administrative level, and indeed beyond the administrative agency to the court of appeals in Columbus.
If you have any questions about Ohio Bureau of Workers’ Compensation audits, please don’t hesitate to contact David C. Korte who chairs the workers’ compensation practice group at Coolidge Wall.