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Idaho workers' comp premium audits: a guide for contractors who use subs

General educational information, not legal or insurance advice. Your carrier's audit rules and your policy control. Ask your licensed agent or carrier about your situation.

What a premium audit is

Workers' comp premium is usually estimated when the policy starts and settled by an audit after it ends. For contractors, auditors typically review payroll records and payments to subcontractors, and ask for certificates of insurance showing each sub carried its own coverage for the period it worked.

When a paid sub cannot show coverage

Carriers typically count what you paid an uninsured sub as part of your payroll for premium purposes, often at the class rate for the sub's type of work. Whether materials are excluded and what proof is accepted depends on your carrier and policy.

The audit bill is not 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.

Exempt owners

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). The exemption does not cover people they employ. Idaho contractor registration requires a workers' comp certificate or a statement of why coverage is not required (Idaho Code §54-5210). Ask your carrier which exemption documents it accepts at audit.

Labels do not decide employee status

Idaho uses a right-to-control test to tell employees from independent contractors (Idaho Department of Labor, Construction and Independent Contractors).

A month-by-month routine

• Before a sub starts: collect a workers' comp certificate (or exemption documentation) and a GL certificate. Log both in a tracker.
• Every month: sort the tracker by expiration date and request renewals 30 days out. Keep expired certificates; the audit covers the whole policy period.
• Every payment: confirm the payee's legal name matches the certificate.
• 60 days before policy end: list every sub paid during the period with totals, and match each to a certificate covering the work dates.
• At audit: bring the list and certificates; take coverage questions to your agent.

Printable version: Idaho Workers' Comp Audit Subcontractor Checklist (PDF).

Sources

• Idaho Code §§72-212, 72-216, 54-5210 (Idaho Legislature)
• Idaho Industrial Commission Employer FAQs
• Idaho Department of Labor, Construction and Independent Contractors