Idaho Workers' Comp Audits and Uninsured Subcontractors
If you're an Idaho contractor who pays subcontractors, your workers' comp premium audit is where gaps in sub insurance tend to show up. Here's what typically happens and how to prepare. This is general information, so for anything about your own policy, ask your carrier or licensed agent.
What a premium audit looks at
Workers' comp premium is usually estimated at the start of the policy and settled by an audit after it ends. For contractors, auditors typically review payroll records plus payments to subcontractors, and ask for certificates of insurance showing that each sub carried its own coverage for the period it worked.
What happens when a sub lacks coverage
When a paid sub can't show acceptable proof of coverage, carriers typically count what you paid that sub as part of your payroll for premium purposes, often at the rate for the sub's type of work. Whether part of the payment is excluded (for example, materials) and what proof is accepted depends on your carrier and policy.
The audit bill isn't the only exposure. Under Idaho Code §72-216, an Idaho employer can be liable for workers' comp benefits to an injured employee of a contractor or subcontractor under it who failed to secure required coverage.
Subs who say they're exempt
Idaho exempts certain owners from coverage for their own employment, including sole proprietors, working members of partnerships and LLCs, and certain corporate officers (Idaho Code §72-212; Idaho Industrial Commission, Employer FAQs). That exemption doesn't extend to people they employ. Idaho contractor registration requires either a workers' comp certificate or a statement of why coverage isn't required (Idaho Code §54-5210). Ask your carrier which exemption documents it accepts at audit.
Labels don't decide it either. Idaho uses a right-to-control test to tell employees from independent contractors (Idaho Department of Labor, "Construction and Independent Contractors").
How to prepare
- List every sub you paid during the policy period, with amounts and dates.
- Match each one to a workers' comp certificate whose dates cover the work, or to exemption documentation.
- Check that legal names on payments and certificates match.
- Request current certificates for anyone expired or missing before the audit, and keep the old ones.
- Bring coverage questions to your agent.
Our free Idaho Workers' Comp Audit: Subcontractor Checklist puts all of this on one printable page.
Want to know where you stand before the auditor does?
Email reistoncorp@gmail.com with the names of the subs you paid this year (or last year's payment list), or use the form on our home page. We'll send back a free exposure check, by email, showing which paid subs had missing or lapsed certificates on the dates you paid them. Everything happens by email. No calls.