With the Easter long weekend approaching and most NSW insurers having finalised renewal premiums, ABILITY GROUP has been assisting clients and brokers with increased enquiries about icare (formerly WorkCover) Wage Audits. If an audit finds under?declared wages, employers must pay the outstanding premium plus late fees from the original due date. Where under?declaration exceeds 25%, employers are also charged the audit cost.
Industry classification
When an application is made for a workers compensation policy, businesses are required to give details of your business activities.
All NSW employers with a workers’ compensation policy are classified under a WorkCover Industry Classification based on their business activities. Insurance Agents must conduct risk ratings and record a business activity code for each employer.
Declaring Wages
All businesses must declare wages to their insurance agent, including salary, overtime, allowances, bonuses, commissions, director payments, leave, superannuation, fringe benefits, long service leave payouts, and trust distributions.
Wage Audits
Icare (Workcover) have a compliance program that verifies if employers have paid their correct premium.
Workers Compensation legislation authorizes WorkCover and the Nominal Insurance Agent to access employer wage records for Wage Audits. Contractors conduct these audits on behalf of WorkCover and the Agent, including for uninsured employers. Routine audits are one of several strategies to improve compliance and ensure premiums are correctly paid, with scheme costs fairly shared among employers.
Where premium non?compliance is identified, the Agent must act and notify the Nominal Insurer. The Scheme Agent must review audit findings and recommendations within 20 Business Days of receiving the final report, and notify the employer of the results in the prescribed format within 30 Business Days. The notification must include:
(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
(c) Any Statutory Fees and other charges/penalties to be paid by the employer.
What happens after you are audited
If wages are under?declared, the employer must pay the outstanding premium plus late fees from the original due date. If under?declaration exceeds 25%, the employer also pays the audit cost.
What to Do?
Please do not hesitate to contact ABILITY GROUP who specialise in providing both Pre-audit reviews and Post-audit services.