Workers' Comp Workers' Comp

WC Premium Audit FAQ's

 

How do I know if payroll reports are required for my policy?

Payroll reporting is just one of the ways your policy could be set up. If you have questions regarding your policy, please contact your insurance agent, or Contact us.

^ Back to Top

Can I report my payroll on line?

Currently you are not able to report on line; however, it is forthcoming. Your report can be returned to us via US Mail, fax or email (payrollreport@icwgroup.com). Please use one of these forms:

See Contact us for our FAX number and contact information if you wish to discuss with one of our customer service representatives.

^ Back to Top

Why don't your reports show the rates so that we can calculate our premium?

Our current reports do not include the rates. We take care of the calculations for you. We can provide you with all the rates/factors if you'd like. Please call our office if you have any concerns about this.

^ Back to Top

What do I do with this report when I'm through, and how will I get billed?

Once you've completed the report, please forward back to us via US Mail, email payrollreport@icwgroup.com or FAX (see Contact us). We will calculate your premium and forward you an invoice. The bill will be mailed to you and/or your agent depending on your policy.

^ Back to Top

Why do I have to fill out a payroll report if I am paying monthly installments?

The premium on your policy was estimated based on the payroll figures supplied to our underwriting department upon policy issuance. The report you are completing is called a "check audit". We are using it to ensure that your actual payroll figures are in line with your estimated payroll figures.

^ Back to Top

When is my payroll report due?

Payroll reports are due 15 days after the end of your audit period. For example: If your audit period is 7/1/06 to 7/31/06, your report is due to us by 8/15/06. If we do not receive your report by this date, we will forward you a second request, or overdue notice. Please Contact our office if you have any timing issues, as we may be able to assist you or extend your deadline.

^ Back to Top

What payroll is to be reported as Workers' Compensation Payroll?

The payroll included should be the Gross Payroll, adjusted using the inclusions and exclusions shown below. Many states have exceptions to the rules. Exceptions are listed below:

Payroll includes:

*Exceptions in AZ, FL, KS, MT, NM, TN, TX, OR*.

  • Vacation Pay (KS, OR)*
  • Sick Pay - not paid by a third-party administrator (KS)*
  • Bonuses (FL, NM, OR, TN, TX)*
  • Holiday Pay (KS)*
  • Employee contributions to a 401k or other deferred compensation plan
  • Employee contributions to a Section 125 Cafeteria Plan (CA)*
  • Auto Allowances*
  • Market value of lodging provided, i.e. free or reduced rent apartment (AZ, MT)*
  • Value of free meals provided by the employer*
  • Travel or "Show Up" pay
  • State Prevailing Wage fringe Benefits paid directly to an employee
  • Davis Bacon Wage fringe Benefits paid directly to an employee
  • Commissions
  • Payments for hand tools provided by the employee, either directly or through a third party

Payroll excludes:

**Not applicable in Nevada** Exception in UT

  • The increased or excess portion of overtime (Not applicable in UT or NV):
    • 1/3 of overtime when overtime is paid at 1.5 times the regular hourly rate*
    • 1/2 of overtime when overtime is paid at 2 times the regular hourly rate*
  • Severance Pay*
  • Charges for the Personal Use of Company Vehicles
  • State Prevailing Wage fringe Benefits paid to a third party administrator
  • Davis Bacon Wage fringe Benefits paid to a third party administrator
  • Tips or Gratuities*
  • Reimbursements for actual expenditures, to the extent they are substantiated in the payroll records

*State Exceptions:

Automobile allowances are included differently in various areas, call for specific state questions

  • Arizona- does not include the value of lodging in payroll, except as specified in certain classifications.
    The value of meals is not included.
  • California- does not include employee contributions to a section 125 or the value of free meals as payroll
  • Florida- does not include awards for employee achievements or discoveries, pure gratuities, or results of a voluntary profit sharing program.
  • Kansas- can exclude Vacation, Holiday or Sick pay if shown in records.
  • Montana- market value of lodging and value of meals are subject to minimum charges. Call for current minimums.
  • New Mexico- Bonuses paid under a state approved safety program are not included
  • Nevada- does not allow for the exclusion of overtime, tips, gratuities, or severance pay. Payroll limitation of $ 36,000 applies for all employees. You may report actual payroll up to the limitation and then discontinue reporting payroll for those employees, or you may limit each employee to $ 3,000 on a monthly basis.
  • Oregon- does not include Vacation pay or unanticipated bonuses
  • Tennessee- includes bonuses only when paid in lieu of wages and specified as a part of a wage contract
  • Texas- excludes safety awards paid in accordance with a written safety plan
  • Utah- does not allow for the exclusion of overtime

Please see Contact us to contact our Premium Audit office with any questions or clarifications.

^ Back to Top

What is excess or premium overtime?

It is the portion of the overtime pay that is over and above the employee's normal hourly wage. For example: If an employee works 10 hours of time-and-a-half overtime and his normal pay is $10.00/hr,then the 10 hours overtime he/she is paid would be paid at $15.00/hr. The premium or excess portion is the additional $5.00/hr the employee was paid x the 10 hours.

A simple way to calculate the excess portion for time and a half overtime is to divide the gross overtime paid by 3. This rule does not apply in UT or NV.

^ Back to Top

I have officers included on this policy; can I limit their payroll when reporting?

Yes, you can limit their payroll annually or monthly/quarterly/ semi-annually. View the Officers & Partners Maximums for a list of States and Officers Maximum Limitations.

^ Back to Top

How do I know if officers are included or excluded?

Your policy was written according to instructions we received through your agent. If officers are excluded from coverage, there will be an endorsement attached to the policy showing that they are excluded. If you are not sure, please call your insurance agent, or Contact us for assistance.

^ Back to Top

What if I want to add a new operation or need to add another class?

The class codes and locations appearing on your payroll report are the ones that your policy was issued with. If you have a new operation or a new class code, please add to the bottom of your report (under the current class codes). Please make sure to include your phone number on the bottom of the report so that we can call you with any questions.

In addition, please make sure to provide your insurance agent with this information. Your agent will notify our underwriting department regarding the change(s).

These steps will ensure that the billing of premium is done timely and accurately.

^ Back to Top

What do I do if I made a mistake on a previous report?

Please send us (fax, mail, email) the revised payroll amounts. (See Contact us.) You may reuse your copy of the payroll report or use the billing invoice to make the changes. Please make sure you write the word "REVISED" on this document.

If you don't have these items available, feel free to submit your changes on your company letterhead or memo. Please sign and date your correspondence. Be sure to include your phone number as well; this will ensure that we can contact you if we have any questions.

^ Back to Top

Can I deduct the employees contribution to the cafeteria 125 plan?

This amount can be excluded for the state of California only. All other states should include this amount.

^ Back to Top

Can I divide an employee's payroll between different classifications?

If the employee can be classified under two or more class codes that allow for payroll division, the payroll can be divided. It is imperative that proper records are kept for this division to be allowed (for example: time cards, or a log that records an employees' hours for their various job duties).

IMPORTANT NOTE: No payroll division is allowed for clerical and outside sales employees. Other class codes exist that do not allow for payroll division. Check with your insurance agent or Contact us for further clarification.

^ Back to Top

How do I report payroll for a Waiver of Subrogation?

If you have one or more waivers of subrogation issued on your policy, the payrolls earned on those jobs need to be reported separately. There is a line on our report form for you to record any payroll issued for your waiver(s). The payrolls earned for the waiver job(s) will be verified at final audit.

^ Back to Top

What will I need to have available for my physical audit?

You'll need to have your payroll journal/records, summaries, 941s, or SUI's. In addition, someone that can assist the auditor in understanding your operations and the various departments within your operation should be available.

^ Back to Top

Why am I charged fees? What are they for?

The State of California enacted the following five programs to create a more effectual workers' compensation system:

  • CIGA California Insurance Guarantee Association (1969)
  • WCA Workers' Compensation Administration Revolving Fund (1989)
  • WCFA Workers' Compensation Fraud Assessment (1992)
  • UEBT Uninsured Employers Benefits Trust Fund (2003)
  • SIBT Subsequent Injuries Benefits Trust Fund (2003)

According to the law, all California insurance carriers must participate in these programs and are required to collect a statutory surcharge from their policyholders.

^ Back to Top

What is TRIA? Do I have to pay this fee?

TRIA, or the Terrorism Risk Insurance Act of 2002, is a federal law created to provide reinsurance coverage to insurance companies following a declared event of terrorism. The act states that participation by property and casualty insurers is mandatory and it needs to be applied to all policies.

^ Back to Top

Who can I call or email if I still have questions?

Please see Contact us to call or email our Premium Audit Department, and we will be glad to answer all of your questions.

^ Back to Top