OhioBWC - Basics:  Audit Review/Request

Audit review/request

Every employer subject to workers' compensation laws in Ohio is required to retain complete records for five years detailing all expenditures for payroll and the division of these expenditures within each manual classification code assigned to their policy. BWC has the right to inspect, review and audit these records at any time and make the necessary classification and/or payroll changes to adhere to our reporting guidelines.

Typically, audits are the result of an overall annual audit plan developed each year. For example, we might look for employers with specific classifications or reporting histories. Audits also can be the result of a random sampling or based on the request of the employer or even another party.

An audit consists of three main parts:

  • An examination of payroll records and tax forms to determine that all payroll has been reported according to our reportable remuneration guidelines;;
  • A rating inspection of the business’ operations to determine that the correct manual classifications have been assigned to the policy;
  • In the event of multiple classifications, verification that payroll has been segregated properly.

The audit will cover at least two semiannual reporting periods. The records we normally require include:

  • Payroll records;
  • Semiannual BWC payroll reports and back-up worksheets;
  • Internal Revenue Service (IRS) forms (940, 941, 1099, W-2 and W-3), returns and attachments;
  • Quarterly Ohio Department of Job and Family Services reports.

In addition, BWC may ask you to provide other records, including business contracts and records documenting business operations.

Some examples of common reporting errors that audits reveal would include:

  • Failing to follow the maximum and minimum reporting requirements for corporate officers and sole proprietors and partners who elect coverage. Be sure to check the semiannual payroll report for these amounts;
  • Incorrect reporting of clerical employees – In order to qualify for this classification, these employees must spend 100 percent of their work time in a physically separated, clerical work area. They cannot have any duties in the business' operations;
  • Incorrect reporting of specific types of remuneration - It's important to know what we require to be reported. As a general rule, we follow the same guidelines as state and federal unemployment with a few exceptions, specifically, payroll for family members, those who have elected coverage, active officers and the employees of the construction industry.
  • Incorrect manual classifications assigned to your policy – properly classifying employers for the development of accurate payroll bases is of major importance to us. It's our responsibility to establish fair and equitable rates for all employers, and this is accomplished only through correct manual assignments. If you feel that you're classified incorrectly or if the nature of your business changes, contact us (see below). It might be necessary for an auditor to visit your facility to conduct a rating inspection.

There is a process to appeal the findings of an audit which the auditor will explain at your appointment.

To request an audit, an employer can call 1-800-OHIOBWC, and follow the options.