What happens if I do not respond to an audit?

If you receive notice from your carrier that you’re being audited, we recommend that you get in touch with them at your earliest convenience. This could be via mail, email, or telephone. 

Carriers will make at least 2 attempts to contact you for audit-related information. If they don’t hear from you, they’ll close the audit as non-compliant.

A non-compliant audit will be based off of payroll estimates (instead of more accurate records), and the carrier also generally applies additional fees.

If your audit is closed as non-compliant, you can ask that they reopen it if you send them the documentation they requested.

Documentation

Any audit-related documentation that the carrier asks for can come from your payroll provider. 

You’ll need:

• Payroll journals/summaries
• Quarterly tax records (941s)
• 1099 reports and cash wage reports
• Unemployment reports

Consequences

Failing to cooperate with an audit can (and most likely will) result in serious and lasting consequences for your business, including: 

• Cancellation of your policy
• Fines and other punishments from your state for non-compliance
• Your audit balance may go to collections and damage your credit score
• You may have trouble getting coverage in the future  

Once the audit is reopened and the requested documentation submitted, the carrier will be able to revise the audit and it will no longer be marked as non-compliant.