Home > payroll, speicalty payroll, workers compensation compliance, Workmens Compensation > General Observations Regarding Compliance Awareness

General Observations Regarding Compliance Awareness

Accounting professionals must look past quarterly reports as a burden and learn the compliance part. A lot of small firms do not understand the mathematical correlation of filing unemployment and workers’ compensation reports. Audits are triggered by percentage comparisons off these two reports.

Return on industrial insurance groups should have periodic surveys among their members to identify audit trends and provide pro-active compliance reviews.  Small independent contractors have no representation and don’t join associations. Payroll companies do not like to handle audits because their ‘add-on’ quarterly reporting software is flawed. Generally Accepted Accounting Principles do not address compliance audits.

The Washington Roofing Contractors Association of Washington had an article submitted by the Small Business Liaison of Washington’s Labor & Industries stating:

“The Department of Labor & Industries will audit hundreds of roofing firms this summer to identify companies that may not be paying workers’ compensation premiums for their employees correctly.” What the Department is saying is that it will enforce the new 2008 audit directive unbeknownst to these small contractors. 

The Department knows that 87% of these small contractor roofing firms are hiring “covered workers” who hire occasional helpers and are subject to heavy assessments. In this letter, the Department tells these individual contractors they can file claims against the hiring contractor if they are injured and asks them to call the Department. If the State gave these independent contractors licenses that have insurance and bonding, why would the State consider them “covered workers” for whoever contracted for their services? It seems a little backward to me. The agencies know the small businessman cannot hire an expensive lawyer to defend them.

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