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Workers Compensation Payroll Audits Accuracy – Huge Concern

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Workers Compensation Payroll Audits Shows Need For Better Forecasting

A huge concern for Workers Compensation payroll forecasting shows up very often when we assist employers with their premium audits.

Vector Graphic of Woman Huge Concern Raising Payroll cheque
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I had posted about this situation over the last few weeks. This situation is becoming a very urgent one as companies are trying to survive in this terrible economy. We have seen this happen over and over again lately when we conduct premium audits for employers.

I wanted to re-post over the concern we have with employers not accurately forecasting their payroll figures. The payroll figures are sometimes called remuneration. This can push a company to the brink of bankruptcy if not done properly.

The very bad economic situation we all are having to bear has caused many employers to layoff a large portion of their staffs. Some employers are just now making cuts to their ranks. Even if your company has not experienced any layoffs, an upcoming reduction may not accurately reflect your payroll figures for Workers Comp policies or audits.

Yes, the premium auditor will catch it at the end of the year with a refund or credit to your next policy. Do not let your premium auditor be the one to refund your company money at the time of the premium audit. You can do it on the front end of the policy.

Overestimating your Workers Comp payroll figures is the same as giving your insurance carrier a free loan of your funds for a year or more. It is recommended that just using last year’s payroll figures be avoided completely. We have seen companies harm themselves greatly due to not adjusting their future payroll figures to match their correct forecasted payroll.

Picture Businessman Receiving a Bag of Money Huge Concern Workers Compensation Audits
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We are not advocating that any employer intentionally underestimate their payroll. We heavily suggest looking at each future payroll period to see if there will be any changes to those figures. You cannot ask for a refund from your insurance carrier mid-policy.

There are many options at the time of policy renewal that will enable your company to avoid this situation. If you need further info, please feel free to contact us. If you have already renewed your policy or are in the midst of a payroll and premium audit, I recommend that you begin to plan for the next policy renewal.

One thing I wanted to clear up is that we are not agents. We do not have any outside influences on what advice we give out to clients.

©J&L Risk Management Inc Copyright Notice.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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