Stay compliant and prevent premium surprises with smart workers comp audit practices.
If you’re a licensed contractor in Florida working in roofing, HVAC, plumbing, electrical, masonry, or sheet metal, workers compensation coverage is a necessity. But what often catches contractors by surprise is the workers comp audit that comes at the end of a policy term.
While audits can feel intimidating, they’re not designed to be a “gotcha.” Instead, they’re about making sure payroll and job classifications are accurate, so premiums reflect the actual level of risk on your jobsites. At BrightFund, we help our members and agents prepare for these reviews so they run smoothly and don’t disrupt your business.
Here’s what contractors in Florida need to know about workers comp audits, why they happen, and how to avoid costly mistakes.
Why Workers Comp Audits Happen
In Florida, as in most states, workers comp premiums are based on estimated payroll and job classifications at the start of your policy term. Because construction work can be seasonal or fluctuate depending on contracts, those early estimates don’t always line up with reality.
That’s where the audit comes in. At the end of the year, insurers (or self-insured funds like BrightFund) review your actual numbers to:
- Verify payroll records against the policy estimate
- Ensure employees are properly classified by trade
- Confirm subcontractors had proper coverage or exemptions
- Adjust premiums if actual exposure was higher or lower than estimated
This process keeps the fund fair for all members and ensures compliance with Florida law.
Common Audit Triggers for Florida Contractors
Audits are standard, but some situations increase scrutiny. For licensed trades, key audit triggers include:
- Large changes in payroll compared to estimates
- Misclassified employees (e.g., a roofer reported as clerical staff)
- Uninsured subcontractors working on your projects
- Incomplete or missing payroll records
- Discrepancies in certificates of insurance provided for subcontractors
Being proactive with your records can help you avoid delays or unexpected bills.
The Importance of Accurate Classification
In workers comp, not all jobs are treated equally. A clerical worker in your office carries a much lower risk (and lower premium rate) than a sheet metal worker on a roof.
Misclassification is one of the most common issues flagged in a contractor payroll audit. If your team members are doing multiple roles, they need to be assigned to the correct governing class code, and clear records should reflect time spent in each type of work.
Florida contractors should also pay attention to NCCI (National Council on Compensation Insurance) codes, which are used to assign risk categories. Using the wrong code, even if it is accidentally, can mean higher costs or penalties.
Payroll Reporting Best Practices
Good payroll practices not only make audits easier but also help keep your premiums fair. Here are a few BrightFund-approved tips:
- Maintain detailed payroll records – Track wages by employee, role, and job site.
- Document overtime correctly – Only the straight-time portion is included in premium calculations.
- Keep subcontractor certificates on file – Verify that every subcontractor has workers comp coverage or a valid exemption before work begins.
- Review classifications quarterly – Catch errors before they build into a larger audit adjustment.
Work with your fund proactively – Self-insured funds like BrightFund are member-owned, meaning we want to help you get it right the first time.
Self-Insured Compliance in Florida
As a Florida self-insured fund, BrightFund follows the same compliance standards as traditional carriers, but with one major difference: we’re built by contractors, for contractors.
That means our goal isn’t just to complete the audit, it’s to help you reduce costs, stay compliant, and protect your workforce. With proactive safety programs, claims support, and certificates of insurance, our members get more than coverage. They get a community.
Preparing for Your Next Audit
If you’ve got an audit coming up, don’t wait until the last minute. Here’s a quick prep checklist for Florida contractors:
- Gather payroll summaries for the policy period
- Organize tax forms (941s, 1099s, W-2s)
- Collect subcontractor certificates of insurance or exemption notices
- Double-check employee classifications against NCCI codes
- Contact your BrightFund representative with any questions before the auditor arrives
An Audit Doesn't Have to Be Stressful
When you understand the process and keep accurate records, a workers comp audit in Florida becomes routine. For contractors, it’s an opportunity to demonstrate compliance, correct mistakes, and ensure your premiums are based on actual exposure.
At BrightFund, we’re here to make that process easier. From payroll reporting support to audit preparation resources, our team ensures you’re never navigating it alone.