Every employer subject to worker’s compensation laws in Ohio 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 BWC ‘s reporting guidelines.

Normally, audits are the result of a random sampling by BWC. However, audits may also be conducted at the request of the employer or, occasionally, at the request of 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;
• 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 the last four semiannual reporting periods. The records the BWC 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 Bureau of Employment 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:

• Not taking advantage of BWC’s payroll reporting maximums – both corporate officers and/or construction employees are reportable only to a specified maximum. Be sure to check the semi-annual 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 is important to know what BWC requires to be reported. As a general rule, BWC follows the same guidelines as the Ohio Bureau of Employment Services. A few exceptions include traveling expenses, tips, payroll to family members, as well as individuals that have filed with the BWC for elective coverage;
• Incorrect manual classifications assigned to your policy – properly classifying employers for the development of accurate payroll bases is of major importance to the BWC. It is the responsibility of BWC to establish fair and equitable rates for all employers and this is accomplished only through correct manual assignments. If you, the employer, feel that you are classified incorrectly or if the nature of your business changes, contact us (see below) and we will set up an appointment for an Employer Service Specialist to visit.

Remember, if an employer disagrees with any audit findings, they may appeal by writing a letter stating so to BWC’s Adjudicating Committee and sending to:

Secretary of Adjudicating Committee
L25
30 West Spring Street
Columbus, OH 43215

To request an audit, an Employer may make the request to their local Service office or call 1-800-OHIOBWC, and follow the options.