OhioBWC - Basics: (Policy library) - File

 

Policy Name:

Payroll True-Up

Policy #:

EP-16-03

Code/Rule Reference

Ohio Revised Code (ORC) 4123.26, 4123.32, 4123.41; Ohio Administrative Code (OAC) 4123-14-03, 4123-17-14, 4123-17-14.2, 4123-17-16, 4123-17-17.

Effective Date:

December 12, 2019

Approved:

Winnie Warren, Interim Chief of Employer Services

Origin:

Employer Policy

Supersedes:

Payroll True-Up policy effective August 1, 2018.

History:

Revised January 31, 2020; November 27, 2018; December 2, 2016; September 8, 2016; August 11, 2016. New Policy issued July 15, 2015.

Review Date:

December 12, 2024

 

 

I.      Policy Purpose

 

BWC requires employers to file an annual payroll true-up and reconcile premium in accordance with the applicable laws and rules.

 

II.    Applicability

A.    This policy applies to private employers (PA employers) and public employer taxing districts (PEC employers), authorized representatives, and all BWC staff.

B.    This policy does not apply to self-insuring employers or professional employer organizations (PEOs).

 

III.   Definitions

A.    Good cause: A substantial reason, one that affords a legal justification or legal excuse, as defined in OAC 4123-14-03.

B.    Grace period: A time frame during which BWC will not impose a penalty for installment payments, and true-up payroll reports, received after established due dates.

C.   True-up: Annual reconciliation of estimated payroll and actual payroll. All employers must file annual payroll electronically after the conclusion of the policy year. BWC will calculate any premium obligation or credit for the completed policy year. Employers must pay any premium obligation due at the time of reporting or by the established reporting due date.

IV.  Policy

A.    Payroll true-up requirements.

1.    After the conclusion of each policy year, every PA employer and PEC employer, including employers with zero payroll, must file an annual payroll true-up with BWC.  The employer must file online at www.bwc.ohio.gov or over the phone with a BWC staff member who is authorized to complete the process.

2.    The annual payroll true-up must contain the total amount of wages paid to employees in each of the employer’s assigned manual classifications over the applicable time period. If the amount of wages is greater than zero, the employer must also report the number of employees in each manual classification.

3.    Due dates:

a.    PA employers: By August 15 immediately following the conclusion of the policy year.

b.    PEC employers: By February 15 immediately following the conclusion of the policy year.

4.    BWC will calculate the difference between estimated gross payroll and actual gross payroll upon the filing of the annual payroll true-up by using an electronic payroll reconciliation process. This process will adjust the employer’s premium obligation for the completed policy year.

a.    The employer must pay BWC any premium balance that is owed by the true-up due date.

b.    Any credit calculated by BWC will be applied to the employer’s account and released in the normal course of business operations. Credits may be subject to further BWC review, including audit verification.

5.    BWC may establish a grace period for the filing of the annual payroll true-up and the payment of any premium balance that is due.

6.    An employer may amend its payroll by submitting the Amended True-Up Payroll Report (RPS-Amend P/R) form to BWC in writing. The amended payroll report must be submitted within the timeframe outlined in OAC 4123-17-17(C)(2).

a.    An employer who submits an RPS-Amend P/R prior to the expiration of the true-up grace period must remit full payment for any premium obligation by the due date on the invoice for the true-up to be successfully completed.

b.    If an employer submits an RPS-Amend P/R after the expiration of the applicable true-up grace period, BWC will process the RPS-Amend P/R as set forth in OAC 4123-17-17(C)(2).

B.    Penalties for PA employers and PEC employers who fail to true-up. BWC will not lapse the employer’s coverage, however, BWC will apply the following penalties to the employer:

1.    BWC will remove the employer from all rating and discount programs for the current policy year;

2.    BWC will not calculate any program bonus, incentive, or rebate for the most recently completed policy year;

3.    The employer may be ineligible for future program participation;

4.    BWC will increase by ten percent (10%) the estimated annual premium (EAP) and bill the employer;

5.    BWC will certify the premium balance to the Attorney General (AG) seventy-five (75) days after the due date if not paid; and

6.    BWC will recalculate the EAP for any employer removed from a rating or discount program for the current policy year. Future installment payments will be adjusted to reflect the revised EAP.

C.   Resolution of complaints.

1.    As set forth in OAC 4123-14-03, the BWC Administrator, for good cause shown, may waive penalties for failure to file, or pay amounts due under, the annual payroll report.

2.    Employer complaints are processed under the General Employer Complaint Policy. BWC staff will refer to section IV of the General Employer Complaint Policy for:

a.    Examples of extenuating circumstances that do not qualify as good cause. Depending on the date the employer’s complaint was filed, an employer in this circumstance may be eligible for:

i.      The “Governor’s one-time forgiveness” (GOTF) scenario outlined in section IV.D below; or

ii.     The one-time violation scenario outlined in section IV.C.3 below.

b.    Examples of extenuating circumstances that do qualify as good cause.

3.    As set forth in OAC 4123-14-03, for employer complaints filed on or after December 12, 2019, the employer may show “good cause” if the default is a one-time violation of the filing of the annual payroll report or the payment of premium. For additional information about the default of a premium payment, see the Retroactive Coverage and Penalty Abatement policy. To qualify for relief, the employer must:

a.    Have filed the annual payroll true-up and, if appropriate, paid any premium owed for the applicable policy year within fifty-nine (59) days of the due date or any established grace period;

b.    Have policy coverage that is active or reinstated;

c.     Be current with respect to all payments due BWC, as set forth in OAC 4123-17-14; and

d.    Be current on the payment schedule of any part-pay agreement into which the employer has entered for payment of premium or assessment obligations.

D.   Governor’s one-time forgiveness (GOTF). The intent of GOTF is to implement the governor’s executive order.

1.    Effective July 1, 2015, each employer had one GOTF. The GOTF may only be used for employer complaints filed between July 1, 2015, and December 11, 2019. The GOTF may be used for a:

a.    Default of a premium installment payment that occurs after July 1, 2015. (See Retroactive Coverage and Penalty Abatement policy); or

b.    Failure to file the annual payroll true-up (see scenario below).

2.    Once GOTF is used, it is no longer available to the employer. The employer may not rescind a prior GOTF.

3.    An employer requesting GOTF does not waive the employer’s right to file additional requests for relief under a different extenuating circumstance that would qualify under the General Employer Complaint Policy.

4.    GOTF should only be used if the employer has not otherwise established good cause for the failure to true-up.

5.    Scenario: Failure to file an annual payroll true-up that occurs between July 1, 2015, and December 11, 2019.

a.    BWC will allow an employer, who cannot otherwise establish good cause, to use GOTF for relief from one violation of the payroll true-up deadline and waive any other penalties associated with the violation.

b.    All of the following conditions must be met in order to grant the employer’s request:

i.      The request must be in writing and specify that the employer is requesting GOTF of the late true-up and any penalties associated with this scenario.

ii.     The employer must have filed the annual payroll true-up within fifty-nine (59) days of the due date referenced in section IV.A.3 of this policy or within fifty-nine (59) days of any established grace period.

iii.    The employer must meet all of the requirements listed in section IV.C.3 of this policy.