Misclassification of Personnel Leads to Work Comp Overcharge
Our client is a trucking company that transports grain and fertilizer and is located in Southeast Minnesota. They operate in a 4-state area with 10 tractor units. The company had a meeting with one of our Risk Advisors in preparation for an upcoming Profit Shield™ Workers’ Compensation Premium Audit.
In reviewing the driver payrolls, our Risk Advisor found that the business owner did not split out the driver payroll by state. The payrolls were all classified according to the state of Minnesota.
It’s important to detail the personnel by state because each state has different rates for workers’ compensation. In this case there was a $3,500 difference between the state premiums. As a result of finding the error WA was able to get a $3,500 savings on the workers’ Compensation audit.
The best way to prohibit something like this from occurring in your own business is to have an in depth discussion with your worker’s compensation advocate prior to the premium audit so you know how you can be best prepared.