Premium Audit

WSI audits records to ensure that workers are properly classified and that employers are paying the appropriate premium. Selection of employer accounts for premium audit are based on criteria including premium size, variances, and industry type. Employers may request an audit if they feel there should be changes in the classifications assigned to their employees.

WSI will inform you in writing when your account is selected for an audit. The letter will contain the date and time of the audit, a list of the records needed for the audit, and instructions for completing the employer audit form and uploading your records in myWSI. The premium auditor may contact you prior to the scheduled date to confirm the audit appointment.

Employers must allow the auditor access to the records necessary to complete the premium audit. See North Dakota Century Code § 65-04-13.

Employers may request an audit if they believe there should be changes to the classifications assigned to their employees.

Physical Audit

When an account is selected for a physical audit, WSI will mail the employer a letter requesting the required documents and information. The premium auditor will review the documents and information received with the employer at their place of business or at their accountant’s office.

Phone Audit

When an account is selected for a phone audit, WSI will mail the employer a letter requesting the required documents and information. The premium auditor will review the documents and information received and contact the employer to discuss the audit.

WSI will normally audit records for the most recently completed premium period. Noncompliance audits can be conducted on records for the last six years.

The time needed to complete an audit will vary depending on the number of employees and whether any irregularities are discovered.

Having the required records and knowledgeable personnel available for the audit helps facilitate an easy and timely audit process. This may require contacting other departments within your organization so that all requested information is available.

WSI requests the following standard records for premium audits:

Annual report (as filed with the ND Secretary of State)
Payroll registers or individual earnings records
Quarterly unemployment reports
Business accounts payable check register
Federal 940 and 941s
W-3 and W-2s
1096 and 1099s
Job titles and job descriptions
Contractor license number

Remuneration means money or substitutes for money. Account premium is based on the amount of payroll or remuneration paid for services performed by employees. Payroll is one type of remuneration. Subsection 38 of NDCC 65-01-02(3) defines, for purposes of chapter 65-04 only, “wages” to mean all gross earnings of all employees.

Commissions
Bonuses
Extra pay for overtime
Reportable tips
Allowances
Pay for holidays, vacations, or sick leave
All pretax deductions for amounts allocated by the employee for deferred compensation. Employee contributions to Cafeteria plans, 401K's, annuity plans, medical reimbursements, flex accounts, Davis-Bacon wages, or any similar program
Value of meals, lodging (rent value of a house or apartment), or other gratuities received by a worker as part of pay

Dismissal or severance pay not included.

If WSI determines that independent contractors hired by the employer are actually employees, employers will be liable for related premiums.

During the audit exit review, the employer may ask questions and clarify any issues or concerns that arose during the audit. The auditor can respond to questions and provide guidance on recordkeeping, audit requirements, and other recommendations. The auditor is available to help address any misunderstandings and ensure the employer fully understands the audit results.

When the audit is complete, the employer will be mailed a copy of the audit summary along with a Notice of Decision. An electronic copy of these documents will also be available in myWSI.