Workers Comp insurance is required by Michigan law for any businesses with more than 2 employees. 

Your workers compensation insurance is based on the amount of your payroll and the job descriptions of the employees

Each year, auditors who represent the insurance companies will audit your payroll.  They will request payroll information, and in some cases, independent contractor information (musicians, doormen, drivers, etc). 

Of course, you want to keep this cost as low as possible and Kallas has some techniques it uses to reduce the cost for restaurant owners.

But, in the past, some restaurant owners have resisted, ignored or delayed giving their payroll information to auditors.

This can be very costly as the auditors have the authority to DOUBLE the premiums if a required business does not cooperate with giving the auditors the information they request.  The term “cooperate” is not defined so if you do something to alienate or anger an auditor, they could make your life miserable. 

As an alternative to unpleasant and wasted time with a workers comp audit, see the article in this newsletter or call Jordan about the Kallas Pay-as-you-Go Work Comp payroll application.