New York State requires almost all businesses with 1 employee or more to have of workers compensation insurance. The employer pays an estimated amount which is adjusted through an audit at the end of each official policy period.Being organized before the audit is essential in preventing costly errors and receiving the best possible rates.
Let's take a look at how premiums are determined and what paperwork is required for a NYS work comp audit. The price of every company's workers compensation insurance is based on the payroll and a set of classification codes set by the state of New York. The payroll number is based on the GROSS PAYROLL which includes salaries, bonuses, commissions, and all vacation, holiday and sick pay.
CLASSIFICATION CODES are determined by the New York Compensation Insurance Rating Board, also known as the NYCIRB. The codes are divided into 5 groups; truckers, contractors, retailers, manufacturers, and wholesalers. Each group is then divided into dozens of sub groups. There are 35 pages of codes.
It is important to take the time needed to properly classify each worker before the audit begins. If you rely on the auditor to assign categories, your premium might be much higher than it needs to be.
Let's say you have an employee who drives for ten hours, unloads and stocks shelves for 5 hours and works the cash register for 20 hours. His three different tasks may all be under three different classification codes, and proper bookkeeping will produce a lower rate.
However, if the auditor assigns codes, that worker may be put under the single highest category. The key to a successful audit almost always is connected to organization. Businesses that keep their books in order, and all the required paperwork when the audit begins usually have successful audits that often result in the best possible premium rates. The state requires lots of documentation. You will need several tax records including your 941, NYS45, business tax returns, and your 1099s. You'll also be asked to have your Payroll book, sales records, general ledger, checkbook, and cash disbursement book available during the audit. Many businesses in New York State over pay for premiums.
The classification codes can be confusing and a bit overwhelming. There are experts who help businesses untangle the code and so they can get the best rates possible and stay in compliance of state laws. Other businesses become confused by the paperwork and end up paying more than necessary. Organization and a complete understanding of classification codes will result in the best possible rates.
Let's take a look at how premiums are determined and what paperwork is required for a NYS work comp audit. The price of every company's workers compensation insurance is based on the payroll and a set of classification codes set by the state of New York. The payroll number is based on the GROSS PAYROLL which includes salaries, bonuses, commissions, and all vacation, holiday and sick pay.
CLASSIFICATION CODES are determined by the New York Compensation Insurance Rating Board, also known as the NYCIRB. The codes are divided into 5 groups; truckers, contractors, retailers, manufacturers, and wholesalers. Each group is then divided into dozens of sub groups. There are 35 pages of codes.
It is important to take the time needed to properly classify each worker before the audit begins. If you rely on the auditor to assign categories, your premium might be much higher than it needs to be.
Let's say you have an employee who drives for ten hours, unloads and stocks shelves for 5 hours and works the cash register for 20 hours. His three different tasks may all be under three different classification codes, and proper bookkeeping will produce a lower rate.
However, if the auditor assigns codes, that worker may be put under the single highest category. The key to a successful audit almost always is connected to organization. Businesses that keep their books in order, and all the required paperwork when the audit begins usually have successful audits that often result in the best possible premium rates. The state requires lots of documentation. You will need several tax records including your 941, NYS45, business tax returns, and your 1099s. You'll also be asked to have your Payroll book, sales records, general ledger, checkbook, and cash disbursement book available during the audit. Many businesses in New York State over pay for premiums.
The classification codes can be confusing and a bit overwhelming. There are experts who help businesses untangle the code and so they can get the best rates possible and stay in compliance of state laws. Other businesses become confused by the paperwork and end up paying more than necessary. Organization and a complete understanding of classification codes will result in the best possible rates.
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