Workman's Comp Insurance Audit

mobile home university
1

I have a park that I used to have a manager who I paid through ADP, and using a workman’s comp insurance company that is associated with ADP. In 2021 I got rid of the manager so since then I have no employees at that park and file noting with ADP at that location.

Great. Life was good without that pain in the neck manager. Or so I thought.

Out of the blue I get a message from the WC insurance company that I am being audited at that location and it looks like I owe then $7,000 for 2022 (a year when I had no employees at that park.) They are looking at my taxes and seeing things like repairs and saying that is all labor and I owe them for it.

Huh? How can that be. Well, they say, we were not insuring your employee but instead insuring that location and you never told us to stop insuring it so cough up the cash.

Have any of you had any experience like this or have any thoughts about it? And if not, you might want to file away in the back of your head this story so as to remember to drive a stake through the heart of your relationship with you WC insurance company if you let your manager go.

2

I believe typically you will have to pay WC insurance on contracted services unless you can demonstrate that the contractor’s employees were insured. In other words, if you hired Joe Roofer and Jane Handyman, your WC audit will catch that and say that it’s equivalent to having had Joe and Jane on your payroll (and the liability exposure that came with it) even though they were contractors. You’ll pay the WC percentage on whatever you paid them, unless you have Jane and Joe’s certificates of insurance on file to demonstrate to the insurance company that they had no exposure.