OhioBWC - Basics:  Reporting mistakes discovered through audits

Premium audits

Premium audits help ensure Ohio provides employers with a fair business climate for workers’ compensation. Each year BWC randomly selects employers for premium audit.

The purpose of an audit is to verify that employers are properly classified according to their business operations and to make sure payrolls are accurately reported with the correct premium being paid. Selected employers are notified by BWC and the audit is then scheduled. Audits can be done at the employer’s place of operation, an accountant’s office, or at a local BWC customer service office. Typically an audit takes about two hours to complete, however this may vary depending on the complexity of the audit.

A BWC auditor reviews an employer’s records for the last two to four semi-annual reporting periods to confirm that the employer accurately reported all wages to the proper classification and computed all premiums correctly. A review of the employer’s operations is also performed to ensure that the employer is properly classified.

Roughly a third of the time the results of a premium audit will produce no findings, meaning that the employer is properly classified and has paid the appropriate premiums. However, if an employer is found to owe additional premiums this information will be entered in the employer’s account and an invoice will be sent for the additional amount due. If an employer has paid too much in premiums, the employer’s account will be credited and a refund issued.

BWC performs audits to make sure employers pay their fair share of workers' compensation premiums.

Employers who may have over reported their payroll or who believe they are incorrectly classified can request an audit. The employer can make this request through the local BWC customer service office or BWC Policy Services, 30 W. Spring St L22, Columbus, OH 43215-2256. The employer also may call the local office and request employer services or call 1-800-OHIOBWC, and follow the options.

Reporting mistakes discovered through audits

Employers may not be aware of exemptions they are allowed such as salary reporting limitations for corporate officers and the construction employees payroll cap.

  • Corporate officers – Report wages that are subject to a minimum and maximum, which is based on the statewide average weekly wage the Ohio Department of Job and Family Services calculates annually
    Payroll reporting requirements
  • Sub Chapter S corporate officers – report a reasonable wage for services performed
  • Construction employees – Report actual salary up to a maximum of $851* per week
*1999 figures – Always read the semi-annual payroll report for the current maximum reportable figures.
  • Mistakes regarding Independent contractor vs. employee
  • Reporting one quarter of wages to BWC instead of six months. Many other government reports are quarterly, however employers must report payroll to BWC based upon the “from and to” dates on the payroll report which is a six-month period.
  • Incorrect payroll reporting by sole proprietors and partners who have elected self-coverage.
  • Sole proprietors, partners and individuals incorporated as a corporation with no employees
    Report wages subject to a minimum and maximum, which is based on the statewide average weekly wage the Ohio Department of Job and Family Services calculates annually.
    Payroll reporting requirements
  • Casual labor not reported – casual labor (not including temporary-help) should be included on the payroll report.
  • Reporting Section 125 cafeteria-plan employee deductions – These deductions should not be included in the payroll reported to BWC if the plan is an IRS-qualified plan.