Auditing Employer Accounts Policy 23-400 | Effective Date: January 31, 2013

Purpose

The purpose of this policy is to provide guidelines to WorkSafeNB staff who conduct employer payroll audits.

Scope

This policy applies to employers and to WorkSafeNB staff authorized to examine employer books and accounts.

Statements

1.0 General      

WorkSafeNB periodically audits employers to ensure that they are:

• Reporting accurate payroll and contractor amounts for assessment and rate-setting purposes; and
• Properly classified.

For more information, see:

• Policy 23-200 Assessable Earnings; and
• Policy 23-300 Employer Classification.      

WorkSafeNB may also audit employer records to determine the number of workers usually employed during the year, or to confirm the type of coverage required. For more information, see Policy 23-100 Employer Registration and Regulation 82-79 Exclusion of Workers.      

An audit is a formal examination and verification of an employer’s operational and financial records. Normally, WorkSafeNB conducts audits at the site where the records are maintained.        

However, if an employer’s records are maintained outside New Brunswick, WorkSafeNB may require that the records be made available within the province, or may authorize staff to conduct an audit where the records are maintained.    

To facilitate these audits, employers are required to maintain and make available to WorkSafeNB staff, detailed and accurate records of:

• All wages paid to their workers; and
• Contracts awarded. For more information, see Policy 21-010 Definition of Worker.     

Employers who have workers in two or more industries are required to keep separate records for each established industry. For more information, see Policy 23-300 Employer Classification.

2.0 Selection Process & Frequency

While WorkSafeNB has the authority to audit any employer, a sample of employers to be audited is selected periodically. This selection of employers to audit, and the frequency of these audits is based on a variety of factors. Examples of these factors may include:

• Employers with a payroll higher than $200,000 who have not been audited in ten years;
• Employers participating in the Experience Rating System with a ratio of injury costs 100% higher than the ratio of injury costs for all employers in the same industry;
• Employers from selected classifications targeted to ensure they belong within a particular classification;
• Employers with three or more lost time claims over the last two years, who have also not been audited within that period;
• New employers in the process of establishing a payroll after hiring a sufficient amount of employees; and
• Employers eligible for a refund due to overpayment of assessments, where the amount exceeds $2,000.

3.0 Availability of Records

WorkSafeNB requires employers to provide all records, documents, or information pertaining to business operations upon request, including:

• T-4s and T-4 summary;
• Payroll register;
• Journal entry details from the general ledger;
• Invoices; and
• Cancelled cheques and cheque register.

WorkSafeNB may take possession of, examine, remove, take extracts from, or obtain reproductions of any information that is relevant to an audit, a verification, or inquiry.

4.0 Retention of Records

Employers are required to retain five (5) complete years of payroll and contractor information, excluding the year in progress.

The employer does not require permission from WorkSafeNB to dispose of any records that are outside the retention period mentioned above, however, they should ensure that disposing of these records does not contravene any other provincial or federal legislation, regulation, or policy.

5.0 Compliance

Employers are required to cooperate with WorkSafeNB during the audit process. This includes providing WorkSafeNB with timely access to all necessary information and to their premises. In the event that an employer refuses to cooperate, WorkSafeNB may:

• Determine a reasonable assessment until the employer provides the required information;
• Request a compliance order from the Court of Queen’s Bench; and/or
• Impose a fine of up to $1,000 for each instance the employer refuses to cooperate.

If an employer does not cooperate with an audit that is required as a result of a refund of overpaid assessments, the refund is cancelled and WorkSafeNB retains the amount.