L&I conducts field audits to ensure compliance with Washington State industrial insurance laws. Title 51 RCW provides the department authority to audit employer records and require employers to make their records available for review.
An audit of your business or organization may happen for a variety of reasons, including random selection. During an audit, we will review your records and conduct fact-finding investigations to determine the following:
- Employer-worker relationships,
- Proper risk classification, and
- Proper reporting
Audits will typically review the four most recent quarters (one year). However in some situations, an audit may be expanded to review the twelve most recent quarters (three years).
If selected for an audit, you will either receive an audit appointment letter in the mail or a phone call from us providing the date, time, and location of the audit.
Once you have received the audit appointment letter, please complete the following steps:
- Call your auditor to confirm the audit appointment if you haven’t already.
- Complete & sign the enclosed Pre-Audit Questionnaire
- Review the enclosed How to Prepare for an L&I Audit
- Gather all available records listed in the enclosed List of Required Records
At the appointment, your auditor will ask audit-related questions, review your records, and provide recordkeeping & reporting education.
If additional records are required to complete the audit and those records were not made available at the appointment, an additional deadline will be established to make the records available for inspection. Failure to produce required records may potentially result in estimated premiums and penalties. Your auditor will use the best information available to complete the audit to the best of their ability.
Once the audit is complete, the auditor will contact you to discuss the audit results and provide future reporting instructions. A report will be generated and mailed to you, which will detail the full results of the audit, any changes made to your account, and future reporting instructions for your specific business or organization.
Frequently Asked Questions
Why am I being audited?
Audits can take place for many different reasons, including the following:
- Random selection;
- Construction/Safety Inspections with workers present;
- Injury or wage claims with no reporting;
- Referrals from the general public.
How long will the audit take?
The time required to complete the audit process depends on a number of factors, including:
- The size, structure, and nature of your business or organization.
- The availability and condition of your records.
- The number of irregularities or inconsistencies discovered.
The standard audit is completed within 30 days of receiving all required records, however each audit is unique. Your auditor will be able to provide a more accurate answer to this question at the audit appointment.
Where will the audit take place?
The audit may be conducted at your local L&I office, your office or place of business, or at your representative’s office (accountant, attorney, etc.).
If you wish to change the location of the audit appointment, contact your auditor and they will work with you to find a mutually convenient location.
What if I disagree with the audit results?
You will have 30 days from the date you receive the NOA (Notice of Assessment) to request a reconsideration of the audit.
The request for reconsideration must be made in writing to your assigned Revenue Agent, and should state why you believe the audit is incorrect.
Once the reconsideration has been processed, a Litigation Specialist will be assigned to your reconsideration and they will contact you with further instructions.
If you disagree with the outcome of the reconsideration, you may appeal in writing to the
Board of Industrial Insurance Appeals.
The following publications are great resources that are available to help you correctly report your workers to L&I each quarter.
- Workers’ Compensation: Record Keeping & Reporting Guide
- Employers’ Guide to Workers’ Compensation Insurance
- Avoid Liability for Your Subcontractor’s Unpaid Workers’ Comp Premiums
- Drywall Contractors
- Construction Industry Classification Guide
If you have any additional questions regarding L&I’s recordkeeping and reporting requirements for your business or organization, please contact your assigned Account Manager or the Employer Services Help Line at 360-902-4817.
If you have any questions about a specific audit for your business, please contact your assigned Field Auditor.