Employer Audit Services Overview
We maintain a collective liability insurance system for most employers in Ontario. Employers who are covered under Schedule 1 of the Workplace Safety and Insurance Act (the Act) fund the system. These employers must contribute their fair share in premiums and comply with their obligations under the Act and its Regulations.
An effective revenue audit program is a key component in ensuring the integrity of our self-reporting insurance plan. Our Employer Audit program aims to educate and inform our employers, improve communication with our employer community and prevent irregular reporting. At the same time, we maintain a fair and level playing field among employers operating similar businesses through compliance.
Who is audited?
Employers are chosen for an audit using various means, including:
- Random selection
- Requests received from other WSIB branches
- Special industry reviews
- Analysis of individual employer’s reporting compared to their industry norm
- Information sharing with the Canada Revenue Agency (CRA)
What should I expect from an auditor?
We require our audit staff to:
- Treat employers with fairness and respect
- Conduct themselves in a professional and business-like manner
- Be knowledgeable about the WSIB system
- Be used as a reference source
- Educate employers about their reporting obligations
- Be a liaison between employers and the WSIB
- Protect the privacy and confidentiality of all information received
How should I prepare for an audit?
A WSIB field or desk auditor will contact an employer in writing, notifying them of their scheduled audit. The auditor will outline the information that is required at the audit. Employers should have an individual present who can respond to questions that arise during the audit.
We generally require this information to complete an audit:
- Payroll records
- Financial statements
- T4, T5 and other information returns filed with CRA
- Records of payments to contractors
- Records of any independent operator rulings issued by the WSIB to your contractors
- Clearance Certificates for the year(s) under audit
- General ledger and cancelled cheques
- Minute books and other ownership records
- WSIB files and working papers used to calculate payroll remittances
How many prior years do you audit?
Generally, an auditor will examine the payroll records and other documents for the two years prior to the current year. If the auditor discovers irregular reporting, the audit may extend up to five prior years, plus the current year.
How long should an audit take?
The length of time to complete an audit will vary from employer to employer. Generally, the size of an employer’s operations will determine the time required to review the records. Also, the time taken will vary with the number of issues that arise before and during an audit.
An audit requires an on-site visit by a field auditor. The auditor will:
- Review financial and payroll information
- Verify the status of executive officers
- Review the employer’s business activities to ensure the employer is properly classified
- Review and make decisions on the status of any unreported contractors
The auditor’s preliminary findings are discussed with the employer. Once the auditor’s decision is approved, the employer will receive an audit findings letter explaining the reasons for the decision.
Common reporting errors
During the course of a payroll/classification audit, a field auditor may find errors in an employer’s reporting of their business activities and insurable earnings to the WSIB. Learn about the most common reporting errors resulting in an audit adjustment
Legislative authority/direction for employer audit services:
Employer Audit Services (EAS) provides the WSIB with an assurance of employer-reporting compliance in its role as legislated by the following Sections of the WSI Act:
- Section 78 - an employer shall provide timely and accurate statement of wages
- Section 80 - payroll records to be maintained and accessible in Ontario
- Section 135 - right of the Board or a person authorized by the Board to examine books or inspect premises
Failure to comply with the Workplace Safety and Insurance Act
Understanding your obligations under the Act is an important part towards complying with the WSIB. We have a compliance approach to help you understand what you have to do. Check the eWSIA learning series for employers to learn about your obligations, use our eServices to make doing business with us easier and discuss with staff concerns you have about audits or collection matters.
As a last resort, the WSIB will use enforcement actions against anyone who intentionally fails to comply. They may be liable for fines and/or imprisonment. Sections 149 to 157 of the Act set out the offence provisions.
Dealing with Employer Audit Services
For more information, contact Employer Audit Services:
Toll free at 1-800-387-0750
Local at 416-344-1000