With these tips you will be able to make the best of a less than ideal situation of working with NYSIF.
Number one don’t try to fool NYSIF.
Frankly, they have seen every trick and gimmick you can think of. With tens of thousands of contractors, NYSIF has seen every sly trick out there to avoid paying those premiums.
I am not going to even mention some of the “tricks” I’ve seen or heard because I do not want to give anyone any ideas.
This leads me to number two, budget the cost of your premium.
There is no reason to be surprised by an audit bill. NYSIF charges your premium based on your actual payroll and any uninsured subcontractors. If your employee makes $1,000 a week and does carpentry work you should be budgeting $172.30 for work comp
($17.23 per $100 in payroll is the manual rate for carpentry plus and discounts or surcharges)
Budgeting it weekly and into your bids helps keep everything in line. The last thing you want to do is grow your business by 15% or 20% but end up running in the red because you got a “surprise” audit bill.
TIP: The same applies to your General Liability. Budget and build it into your bids.
Sticking with the same trend of budgeting, the third tip to manage your NYSIF relationship is to use an accounting system or software.
I am a fan of Quickbooks online, it allows you to use any phone, tablet or PC to manage your accounting. This will allow you to budget and keep track of those expenses to make audit time a whole lot less painful.
Something else that makes having an accounting system great is it helps you keep your job invoices handy, a new fun requirement by NYSIF. All your jobs are recorded and accounted for and ready to be printed off for that audit.
***Oh yes I said printed. NYSIF wants 100% paper even in 2018***
Our fourth tip to help keep everything running smoothly with NYSIF is to use an integrated payroll provider.
NYSIF is partnered with several payroll services to allow an easy and direct way to report your payroll. This is a huge help to avoid large audits. The only downside is that money for your premiums is being taken at the same time as your payroll so your weekly out of pocket can get painful. But that’s ten times better than a massive bill at the end of your policy.
Speaking of massive bills, that leads us to tip number five.
Monitor your subcontractors work comp very closely.
Not to be critical of subcontractors, but often times the status of their policies fluctuate from Active to non-pay cancel. Just because you got a work comp or general liability cert when they started the job doesn’t mean that policy will be active four weeks later when the job is complete.
Always ALWAYS ask for updated proof of work comp coverage prior to releasing the final check.
This tip alone could save you tens of thousands of dollars and hours of frustration.
Our final tip for you to manage your NYSIF policy is to prepare for audits early.
I encourage my clients to reschedule an audit when the initial letter arrives. Often times you can pick a day of the week to your liking and bump your audit up to several months so you can prepare.
As of 2018 NYSIF requires the following items for your audit.
Payroll Summary Report and Payroll Tax Returns (941s, NYS-45s and NYS-45 ATTs).
Profit and Loss Statement or Cash Book (but a P&L from quickbooks is 10X easier)
Corporate Tax Return
Subcontractor report with total paid and Certificates of Insurance for Subcontractors Used.
Contracts, Bills and Invoices (for labor, services and materials).
1099s, 1096s, W-2s and W-3s.
Bottom line, working with NYSIF is difficult they scrutinize your paperwork harder than anyone else. Also they ask for more information than any other insurance carrier. But in return you get possibly the lowest premium rates of any work comp provider in the state. Plus if you prepare your business and whomever is meeting with the auditor, you can have a reasonably smooth business relationship with NYSIF.