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This is One "Test" You Want to Avoid

Oregon Businesses are Receiving Notices of Workers Compensation “Test Audits.” This includes at least one local business. What is this? What is a test audit? What should an employer do?

The National Counsel on Compensation Insurance (NCCI) conducts audits of Oregon employers for the Insurance Division of the Oregon Department of Consumer & Business Services. The NCCI audit notices state the audit is to verify the accuracy of the data your comp carrier provides to the state.

So this makes it seem like only your comp carrier is at risk from this audit. Don’t believe that for a minute!

There is at least one reported case of an Oregon employer going all the way to the Oregon Court of Appeals after an NCCI audit. So what will catch the eye of an NCCI auditor? According to NCCI test audit result forms, they are looking for misclassifications. Specifically, they are looking for Risk Miscalculations, Employee Miscalculations, Payroll Differences and “Other Differences” (whatever that may be). 

If you work with independent contractors, this surely will be an area of intense scrutiny. That was the issue in the court case previously mentioned. By the way, the Oregon Court of Appeals ruled against the employer (not a big surprise). If you work with independent contractors, you need to be aware of these audits.

What should an Oregon employer receiving a Notice of Workers Compensation Test Audit do?

1.  Contact your employment lawyer immediately.

2.  Have your lawyer reschedule the audit for a later date to allow you more time to prepare.

3.  Gather the information requested in the manner requested.

4.  Remove all personally identifiable information (names, social security numbers, addresses, telephone numbers, etc….) from the records you provide.

5.  Provide only the information requested, nothing more.

6.  Present the information requested in a clear, concise format.

7.  Be polite and courteous but do not volunteer information. This is important.

8.  Call your employment attorney (I know this is repeating #1 but it is crucial).

If you are “selected” for one of these “test audits,” please let us know. We are very interested in your audit story. This is how we can warn and assist other Oregon employers.

Alan Thayer

LegalBriefs are published as an educational service for business people by Oregon business attorney Alan Thayer. He welcomes your questions and comments.

This article and all LegalBriefs articles are offered for general information and educational purposes only. They are not offered as legal advice and do not constitute legal advice or opinion. We do not promise or guarantee that the information is correct, complete or up-to-date. You should not act or rely upon the information in this or any other LegalBriefs article without seeking the advice of an attorney.

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Reader Comments (1)

These workers comp audit is the only implemented where workers have right to claim. otherwise, these steps are really worthless. I concern about those workers who do not have right to claim for their disability.
February 1, 2018 | Unregistered CommenterCutCompCosts

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