With the Easter long weekend upon us and with most NSW insurers having completed their outstanding renewal premium processing, ABILITY GROUP have been assisting clients and brokers with a larger number of enquiries regarding icare (previously WorkCover) Wage Audits.
Icare have a compliance program that verifies if employers have paid their correct premium. To ensure that employers are paying the appropriate workers compensation premium, legislation gives icare and the Nominal Insurance Agent right to access an employer’s wage records in conducting a Wage Audit. When an audit reveals a business has under declared their wages, the employer must pay the outstanding premium as well as a late payment fees dating back to when the premium was originally due. In addition, when wages have been under declared by more than 25%, the employer will be charged the wage audit cost.
WAGE AUDITS & WHAT TOP DO?
When an application is made for a workers compensation policy, businesses are required to give details of your business activities.
All employers with a NSW workers compensation policy are allocated to a WorkCover Industry Classification based on the nature of their business activities.
Insurance Agents have been instructed to undertake risk ratings to obtain and document a business activity code for each individual employer.
All businesses must declare their wages to their insurance agent.
This is to help ensure you’re paying the correct premium and that everyone is paying their fair share into the scheme.
Wages can include but not limited to Salary/Wages, Overtime, shift and other allowances, Over award payments, bonuses, commissions, payments to working directors, payments for sick leave, public holidays and leave loadings, superannuation contributions, fringe benefits, long service leave termination payments and trust distributions.
Icare (Workcover) have a compliance program that verifies if employers have paid their correct premium.
To ensure that employers are paying the appropriate Premium, Workers Compensation legislation gives WorkCover and the Nominal Insurance Agent right to access an employer’s wage records to conduct a ‘Wage Audit’.
The Wage Audit Services Contractors conduct Wage Audits on behalf of WorkCover and the Nominal Insurance Agent for the employers insured under the NSW WorkCover Scheme. They also conduct Wage Audits on employers who are not insured.
Routine Wage Audits are among a range of strategies WorkCover uses to help improve the level of compliance among employers with their Workers Compensation Premium obligations.
WorkCover’s Wage Audit program is designed to help ensure Scheme costs are fairly distributed among all employers and that employers pay the correct Premium.
Where Premium non-compliance is suspected or evidenced, the Agent must take the necessary action to address the non-compliance and notify the Nominal Insurer.
The Scheme Agent must review the Wage Audit final findings (e.g. employer business activities and WorkCover Industry Classification (WIC), Wages, deemed Workers/contractor issues etc.) and assess recommendations within 20 Business Days of receipt of the Wage Audit final report, and ensure that appropriate action is taken in a timely manner.
The Scheme Agent must notify the employer of the results of the Wage Audit within 30 Business Days of receipt of the Wage Audit final report in the prescribed format in employer letter Wage Audit results.
The Scheme Agent must include in the notification to the employer:
(a) Any reimbursement of monies paid by that employer under an insurance Premium and the reasons; or
(b) Any adjustment requiring the payment of any shortfall in Premium paid or payable by an employer and the reasons, and
(c) Any Statutory Fees and other charges/penalties to be paid by the employer.
What happens after you are audited
When an audit reveals a wage under declaration, the employer must pay the outstanding premium as well as a late payment fee dating back to when the premium was originally due.
In addition, when wages are under declared by more than 25 per cent, the employer will be charged the wage audit cost.
What to Do?
Should you have any questions or require assistance then please do not hesitate to contact ABILITY GROUP who specialise in providing both Pre-audit reviews and Post-audit services. Our consultants focus on minimising the business and financial impacts of wage audits for our clients and possess a track record in saving clients time, frustration, effort and money.