Workers Compensation covers employees and employers in the event of a work related injury or disease. Through this system, injured workers have an entitlement to payments either weekly, lump sums or payment of medical bills and rehabilitation in some cases. Having a work cover audit taking place can be daunting; here is some helpful information to prepare you for your Work Cover Audit.
First I will explain how work cover works. Insurers collect premiums from employers to cover the costs of work related injuries and diseases and the compensation related with these. An employer’s premium is based on various things including the industry in which the employer operates, the amount of remuneration the employer pays to its workers and the cost of any claims made by their workers.
Insurance companies conduct audits to ensure the employers are paying the correct premium. WorkCover and its licensed insurers have the right to access an employer’s wages records under section 174 of the Workers Compensation Act 1987. WorkCover use a computer program to calculate statistical figures on areas that have a high-risk for non-compliance, based on the employer’s policy details. An employer may be inspected more than once; there is no limit to how many times an employer’s records can be audited.
If your company is being audited by WorkCover, you will first be notified in writing. This notice will contain details of the auditor and the auditor will then contact you to arrange for the audit to take place.
During the audit, the auditor will inspect payroll records, tax returns, financial statements, and other pertinent documents. They do this in order to obtain the actual payrolls and classifications for the policy period which has just expired. The auditor’s findings are then compared with the estimated figures shown on your policy. If you do not cooperate with the auditor, WorkCover have the authority to issue orders requesting that your company provide the requested records to the insurer. If you do not comply, you may be fined up to $55,000.
Once the audit has been completed, if the auditor finds that the wage figures have increased, you will get a bill from the insurance company for the additional premium due. If the wage figures have decreased, then the insurance company owes you a refund.