WORKERS' COMPENSATION INSURANCE COVERAGE 
Your gross payrolls are reviewed to determine your premiums for Workers ' Compensation insurance coverage. gross payroll includes total remuneration for services performed, including:
Wages
Overtime (straight time portion)
Bonuses 
Commissions (including 1099 commissions) 
Holiday and Vacation Pay 
Sick Pay (except 3rd party reimbursements 
Incentive Plans 
Piece Work
Auto Allowances (except expense reimbursements) 
Housing Allowances (for certain class codes) 
Savings Plan (401 K) Employee Contributions 

OVERTIME EARNINGS RECORDS
Earnings records for each individual should be organized to include overtime payments, the employee's job classification and total remuneration. State law allows the premium portion of overtime payment to be excluded from total payroll for determining premiums.

CORPORATE EXECUTIVE OFFICERS, PARTNERS, SOLE PROPERTIES
When included in your policy, the earnings of executive officers, partners, and sole proprietors must be assigned to the specific classifications for the work they perform. State law specifies an earnings minimum and maximum for these salaries when determining premiums.

RECORDS REQUIRED FOR PREMIUM AUDITING 
The insurance company representative will look at the following records during the Premium Audit process: 

PAYROLL
Monthly and Quarterly totals
Work classification totals 
Separate totals for clerical office, outside sales and any type of work performed Overtime by work classification classes 

INDIVIDUAL EARNINGS 
Type of Work performed 
Date of hire and/or termination
Gross pay totals, monthly and quarterly
Overtime totals, monthly and quarterly 

CASH DISBURSEMENT AND JOB COST JOURNALS
Monthly totals by account, including: 
Subcontractors 
Casual Labor
Contract Labor 

VERIFICATION AND BALANCING
Employers Federal Tax Return Form 941 (Quarterly)
State Unemployment Tax Return (Quarterly) 
General Ledger 
W-2 Statements 
1099 Statements 
Financial Statements

CONTRACTORS LICENSE AND CERTIFICATES OF INSURANCE 
License from each subcontractor 
Certificate from each subcontractors

SPECIAL NOTE REGARDING SUBCONTRACTORS
If your company hires subcontracting companies which have not purchased Worker 's Compensation insurance for their employees, insurance laws require that your policy must provide coverage for theses employees should they suffer any work-related injury or illness while on your premises or job site. Even more important is the issue of a contractor 's license. State law demands that unlicensed subcontractors must be considered employees of the hiring contractor. 
An agreement or written contract with the subcontractor releasing you from such Worker 's Compensation coverage would not be sufficient under the law. Even if the subcontractor may have accident and health insurance policies, you would still be liable for workers ' compensation coverage for the subcontractor 's employees while on your job. The answer is to obtain a copy of the subcontractor 's license and a certificate of Workers ' Compensation insurance from the subcontractors before any work begins. The insurance company representative will require this proof of insurance and insurance during the audit process. Otherwise, you must include the subcontractor 's payroll along with your payroll to determine your actual premium costs, which could be substantially higher. (SEE ATTACHED "INDEPENDENT CONTRACTOR" DEFINITION) 

WAIVER OF SUBROGATION
When your policy includes a waiver endorsement it is necessary for you to maintain payroll records which accurately segregate, by classification, the remuneration of your employees while engaged in the work, described in the schedule.

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