Day: September 23, 2022

Tips to Prepare for a Workers’ Compensation Audit

The best time to prepare for a Workers’ Compensation audit is at the start of a new policy year.

Setting up all processes and recordkeeping properly and keeping them updated throughout the year can help ensure you’ll be ready for an audit and help protect your company from penalties for violations.

According to the New York Workers’ Compensation and Employers’ Liability Manual, if your organization’s premium is:

$10,000 or over, it will be subject to a physical (a.k.a. on-site) audit once a year.
Within the $5,000 to $10,000 range, an audit will be conducted the first year a carrier offers the policy and at least once every three years thereafter (a signed payroll statement must be provided any year a physical audit is not conducted).

If an audit is impracticable, a signed payroll statement may be accepted.

At the start of a policy year, you provide your carrier with estimated payroll and the type of work your employees do. In turn, they assess the risk involved to calculate your annual premium. Since the number of employees you have, the work they do, how much you pay, and other factors can change during the year, an audit is conducted at the end of the policy year. As a result, you may get a refund; you may be charged more; or you may come out even.

Typically, your policy will contain a provision stating you agree to be audited. So, you are legally obligated to comply in a timely manner. For a physical audit, you’ll generally receive notice within 60 days of the end of the policy year. For a voluntary audit, within 30 days of a policy year, you may be asked to complete and submit forms related to payroll. If you don’t comply, you risk giving the carrier latitude to estimate audit figures (which are likely to be higher than the actuals you can provide) and apply penalties equal to 25% to 50% of your premium.

What You’ll Need

To prepare, your organization must keep good records and documentation for the policy period:

General information including a description of your operations; names and titles of owners and officers; number of employees at each location; and a description of work performed by contractors or subcontractors.
Job classifications and descriptions providing detailed information about what employees do.
Payroll records including payroll register; checkbook (if that serves a recordkeeping purpose); accounting ledger; Form 941, Form 944, W-2, 1099 and other tax forms; state unemployment insurance tax reports; hours, days and weeks worked annually; individual earnings, overtime and bonus records; salaries, wages and commissions. (TIP: Separate earnings and overtime for each employee classification, as they impact the premium differently.)
Financial data including payments to independent contractors and subcontractors, as well as casual laborers, and receipts for materials purchased.
Insurance certificates for every contractors’ and subcontractors’ Workers’ Compensation coverage.

Take Control

The word “audit” itself is unnerving; however, there are steps that can help you control the process and promote a positive outcome:

Designate one person to make sure everything is prepared on time for the audit; answer auditor questions; and get answers to any questions he/she may have.
Be prepared. Auditors work under tight deadlines. Help them move through the audit quickly by having all requested documentation and records accessible and organized. Keep all contractor/subcontractor documentation and information together.
Do not provide any information, documentation, or records that were not requested.
Review audit documents carefully. Focus on how the auditor classified employees and the audit’s impact on your business.
Do not sign anything until you have completed your review. Never sign if the audit documentation is not complete, even if the auditor says he/she will fill it in later.
Request and keep a copy of any audit documents for your files.

For additional information, refer to the New York Workers’ Compensation Rating Board manual, overview for employers, employer rights and responsibilities, and website. RBT CPAs’ Visions Human Resource Services affiliate is available to provide advice regarding Workers’ Compensation. What’s more, RBT CPAs, a leading accounting firm in the Hudson Valley and beyond, is ready to take on your accounting, tax, and audit needs with the highest levels of professionalism and ethics. When you engage us to do what we do best, you’re freed up to focus on what you do best – running your business.

Better Together: Local, State & Federal Resources Team Up to Fight Cyber Terrorism

U.S. and state leaders recognized municipalities do not have the resources or manpower to stop the onslaught of cyberattacks at a local level. This year, a new strategy has emerged in the war on cyber terrorism, fostering a shared services approach to winning on this invisible battlefield on national, state, and local levels. As a result, New York municipalities have access to more support, training, and tools than ever to protect sensitive data and critical infrastructure.

In June, the State and Local Government Security Act was signed into law, formalizing the Cybersecurity and Infrastructure Security Agency (CISA) and Multi-State Information Sharing and Analysis Center (MS-ISAC) relationship and roles in increasing cybersecurity defenses and resiliency.

Under the law, CISA is required to help address cyber incidents; share cyber threat indicators, defensive measures, and risks; communicate incidents; share best practices, standards, and policies; help build system resiliency; promote education and awareness; and more. MS-ISAC (made up of a coalition of more than 2,500 organizations including states and territories) must work with CISA to improve cybersecurity for all, using a 24/7 watch and warning center and a Computer Emergency Response Team.

In July, NY Governor Kathy Hochul announced the start of the state’s $30 million shared services program to help counties protect government systems against ransomware and other attacks. This follows the introduction of the state’s Joint Security Operation Center which takes a centralized approach to managing cybersecurity risk for government assets throughout the state. Counties can opt-in at no cost.

What’s more, the Infrastructure Investment and Jobs Act of 2021 includes $1 billion in grants to state, local, tribal, and territorial governments over four years. Under the law, 80% of money received by states via grants must go to local governments. Just a few days ago (September 16 to be exact), the Department of Homeland Security launched the State and Local Cybersecurity Grant Program to begin distributing funds. (Click here for FAQs for how local governments can access the grants.)

To bolster efforts to stand up to cyber attacks at the local level, early this year, the New York State Association of Counties issued a Cybersecurity Primer for Local Leaders. The Hudson Valley Pattern for Progress hosted a series of webinars (with recordings available) focusing on boosting cybersecurity in the region.

Also, the New York State Office of Information Technology developed a webpage devoted to cybersecurity resources for local municipalities’ elected officials, administrative officials, and business managers. Among the many resources posted is a Local IT Governance Management Guide, as well as guides for incidence reports, risk management, getting started with cyber security, secure credit card payments, firewalls, Internet and acceptable use policies, disposal of electronic media, and backing up essential information. In addition, there are awareness resources including webinar recordings, newsletters, and toolkits; training resources; and a toolkit with assessment tools, user guides, and more.

With so many divisive factors in society today, it’s refreshing to see that when called upon Americans can be bigger than what divides us by uniting at every level of government to stand up against security threats in cyberspace. No doubt, it’s a big job on a battlefield with no borders and no visible enemies.

To free you up to focus on what you do best – including protecting your community’s critical infrastructure and residents’ private data, we want to remind you that RBT CPAs is here to take on everything accounting, tax, and audit-related. We’ve been serving municipalities in the Hudson Valley and beyond for over 50 years, and we’re always ready to do our part with the highest standards of professionalism and ethics. Contact RBT CPAs today.

Comments on NY’s Aggregate Hauling Prevailing Wage Proposed Rule Being Accepted Now

While different industry groups have had mixed reaction to the Inflation Reduction Act’s prevailing wage provisions, on September 14 the New York State Department of Labor issued a proposed rule for prevailing wage for aggregate hauling. Public comments are being accepted until 60 days from the notice’s publication.

First, some background. As stated on the NYS Department of Labor website, “Under New York State Labor Law, contractors and subcontractors must pay the prevailing rate of wage and supplements (fringe benefits) to all workers under a public work contract. Employers must pay the prevailing wage rate set for the locality where the work is performed. Prevailing wage is the pay rate set by law for work on public work projects. This applies to all laborers, workers or mechanics employed under a public work contract.” (You can find the schedule of prevailing wages from July 1, 2022 to June 30, 2023 here.)

On December 31, 2021, Section 220(3-a) of the Labor Law was enacted regarding prevailing wage for aggregate hauling. As noted in the September 14, 2022 NYS Register Rule Making Activities, “The Governor’s Approval Memorandum to Senate Bill 255-B stated: ‘I have reached an agreement with the Legislature to clarify that prevailing wage will be paid only at the worksite itself and for travel between the worksite and a designated central stockpile where aggregate supply construction materials are delivered. Prevailing wage will not apply to out of jurisdiction deliveries of aggregate supply materials to the designated central stockpile.’”

A subsequent amendment to Section 220(3-a)(f) introduced new terms – including “worksites,” “aggregate supply of construction materials” and “central stockpile – leaving questions about the law’s application.

The proposed rule sets out to define these terms as follows: “(a) Worksite means the area in which the improvements associated with a specific project, as defined in the construction contract, and any surrounding areas supporting that specific project. (b) Central stockpile means a location of centrally stockpiled materials solely dedicated for use on a public work project that is not part of a worksite but intended to support the worksite. (c) Aggregate supply construction materials” means sand, gravel, stone, crushed stone, dirt, soil, millings, and fill.”

The proposed application is as follows: “For the purposes of Section 220 of the Labor Law: (a) Prevailing wage shall be paid for work performed at a worksite involving the delivery of aggregate supply construction materials to such worksite. (b) Prevailing wage shall be paid for work performed involving the hauling of aggregate supply construction materials from a worksite to a central stockpile, as well as any return hauls, empty or loaded, time spent loading or unloading at a worksite, and time spent loading or unloading at a central stockpile related to hauls from or to a worksite. (c) Prevailing wage shall be paid for work performed within a 50-mile radius of a worksite involving the delivery of aggregate supply construction materials from a vendor of aggregate supply construction materials, such as a plant or quarry, to a worksite, except prevailing wage shall not be paid to direct employees of a supplier of aggregate supply construction materials, when making a single delivery in a given day.”

To obtain text of the proposed rule, as well as required statements and analysis, or to comment on the rule, write to Jill Archambault, Department of Labor, Building 12, State Office Campus, Room 509, Albany, NY, (518) 485-2191 or email: regulations@labor.ny.gov.

While RBT CPAs is not an expert in labor law – you’ll have to consult your legal counsel for that – we do know accounting, audits, bookkeeping, and taxes. If you need some extra time to stay up to speed on all the laws and changes governing wages, you can depend on RBT CPAs to handle your accounting and related needs with the highest levels of professionalism and ethics. We’re proud to have served businesses and municipalities in the Hudson Valley and beyond for over 50 years. To learn what we can do for you, give us a call.