Policy Name:	Payroll True-Up
Policy #:	EP-16-03
Code/Rule Reference	Ohio Revised Code (ORC) 4123.26, 4123.32, 4123.41; Ohio Administrative Code (OAC) 4123-14-03, 4123-17-14, 4123-17-14.2, 4123-17-16, 4123-17-17.
Effective Date:	July 1, 2024
Approved:	Rex Blateri, Chief of Employer Services
Origin:	Employer Policy
Supersedes:	Payroll True-Up policy effective January 1, 2022.
History:	Revised August 1, 2024; September 26, 2023; February 23, 2022; March 8, 2021; January 31, 2020; November 27, 2018; December 2, 2016; September 8, 2016; August 11, 2016. New Policy issued July 15, 2015.
Review Date:	July 1, 2029

 

I.       Policy Purpose

 

BWC requires employers to file an annual payroll true-up and reconcile premium in accordance with all applicable laws and rules.

II.     Applicability

A.      The policy applies to private employers (PA employers) and public employer taxing districts (PEC employers), authorized representatives, and all BWC staff.

B.      This policy does not apply to self-insuring employers, alternate employer organizations (AEOs), professional employer organizations (PEOs), or state agencies.

III.   Definitions

A.      Good cause: A substantial reason, one that affords a legal justification or legal excuse, as defined in OAC 4123-14-03.

B.      Grace period: A time frame during which BWC will not assess a penalty for late payments or late reporting.

C.      Payroll true-up: Annual reconciliation of estimated payroll and actual payroll. All employers must file annual payroll electronically after the conclusion of the policy year. BWC will calculate any premium obligation or credit for the completed policy year. Employers must pay any premium obligation due at the time of reporting or post payment by the established reporting due date.

IV.   Policy

A.      Payroll true-up requirements.

1.      After the conclusion of each policy year, every PA employer and every PEC employer must file an annual payroll true-up with BWC. The employer must file online at www.bwc.ohio.gov or over the phone with a BWC staff member who is authorized to complete the process.

2.      Subject to the exception set forth in section IV.B.3 of this policy, BWC may waive the requirement to file an annual payroll true-up for PA employers who:

a.      Are not an AEO or a PEO;

b.      Do not have employees in the policy year, including no employees who elected coverage pursuant to OAC 4123-17-07; and

c.       Have reported no payroll on the annual payroll true-up for the three previous policy years.

3.      BWC may waive the requirement to file an annual payroll true-up for a PA employer who is a client employer of an AEO or a PEO if the client employer:

a.      Meets the criteria in policy sections IV.A.2.a and IV.A.2.b;

b.      Has been in an AEO agreement or a PEO agreement for the entire policy year; and

c.       Reports all wages under the workers’ compensation policy for the AEO or the PEO for the entire policy year.

4.      The annual payroll true-up must contain the total amount of wages paid to employees in each of the employer’s assigned class codes over the applicable time period. If the amount of wages is greater than zero, the employer must also report the number of employees in each class code.

5.      The annual payroll true-up is due immediately following the conclusion of the policy year.

a.      PA employers: For policy years beginning prior to July 1, 2024, the due date is August 15. Effective the policy year beginning July 1, 2024, the due date is August 31.

b.      PEC employers: For policy years beginning prior to January 1, 2025, the due date is February 15. Effective the policy year beginning January 1, 2025, the due date is the last day of February.

6.      BWC calculates the difference between estimated gross payroll and actual gross payroll upon the filing of the annual payroll true-up by using an electronic payroll reconciliation process. This process adjusts the employer’s premium obligation for the completed policy year.

a.      The employer must pay BWC any premium balance that is owed. The employer’s payment must be posted by the payroll true-up due date.

b.      Any credit calculated by BWC is applied to the employer’s account and released in the normal course of business operations. Credits may be subject to further BWC review, including audit verification.

7.      BWC may establish a grace period for the filing of the annual payroll true-up and the payment of any premium balance that is due. Effective the policy year beginning July 1, 2024, for PA employers, and effective the policy year beginning January 1, 2025, for PEC employers, BWC will not establish a grace period.

8.      An employer may amend its payroll by submitting the Amended True-Up Payroll Report (RPS-Amend P/R) form to BWC in writing. The amended payroll report must be submitted within the timeframe outlined in OAC 4123-17-17(C)(2).

a.      An employer who submits an RPS-Amend P/R prior to the payroll true-up due date must remit full payment for any premium obligation owed. The employer’s payment must be posted by the due date on the invoice for the payroll true-up to be successfully completed.

b.      If an employer submits an RPS-Amend P/R after the payroll true-up due date, BWC will process the RPS-Amend P/R as set forth in OAC 4123-17-17(C)(2).

9.      An employer, who elects to obtain other-states coverage pursuant to ORC 4123.292, must:

a.      Report payroll to BWC for work the employees performed in Ohio and other work not covered by the other-states coverage policy; and

b.      Maintain documentation of the amount of payroll paid to employees for work performed outside of Ohio and covered by the other-states coverage policy and provide the documentation to BWC upon request.

10.  An employer who covers employees with an insurer providing federal Longshore and Harbor Workers’ Compensation Act coverage must:

a.      Report payroll to BWC for work the employees performed in Ohio for which they are eligible to receive Ohio workers’ compensation benefits; and

b.      Maintain documentation of the amount of payroll reported to the insurer providing the federal Longshore and Harbor Workers’ Compensation Act coverage and provide the documentation to BWC upon request.

B.      Penalties for PA employers and PEC employers who fail to file or pay amounts due for the annual payroll true-up. BWC will not lapse the employer’s coverage, however, BWC will apply the following penalties to the employer:

1.      BWC will remove the employer from all rating and discount programs for the current policy year;

2.      BWC will not calculate any program bonus, incentive, or rebate for the most recently completed policy year;

3.      The employer may be ineligible for future program participation;

4.      BWC will increase by ten percent (10%) the estimated annual premium (EAP) and bill the employer;

5.      BWC will certify the premium balance to the Attorney General (AG) seventy-five (75) days after the due date if not paid; and

6.      BWC will recalculate the EAP for any employer removed from a rating or discount program for the current policy year. Future installment payments will be adjusted to reflect the revised EAP.

C.      Resolution of complaints.

1.      As set forth in OAC 4123-14-03:

a.      The BWC Administrator, for good cause shown, may waive penalties for failure to file the annual payroll true-up or pay amounts due.

b.      An employer request to waive penalties must be submitted to BWC. The employer must fully explain the reason for the relief sought.

2.      Employer complaints are processed under the General Employer Complaint Policy. BWC staff will refer to section IV of the General Employer Complaint Policy for examples of extenuating circumstances. An employer with an extenuating circumstance that does not qualify as good cause may be eligible for the one-time violation scenario outlined in section IV.C.3 below.

3.      As set forth in OAC 4123-14-03, the employer may show “good cause” if the default is a one-time violation of the filing of the annual payroll true-up or the payment of premium. This relief is also referred to as One-Time Forgiveness (OTF). For additional information about the default of a premium payment, see the Retroactive Coverage and Penalty Abatement policy. An employer may use the True Up Forgiveness (U-59-True-up) form to file a request. To qualify for relief, the employer must:

a.      Have filed the annual payroll true-up and, if appropriate, posted payment for any premium owed for the applicable policy year within fifty-nine (59) days of the due date or any established grace period;

b.      Have policy coverage that is active or reinstated;

c.       Be current with respect to all payments due BWC, as set forth in OAC 4123-17-14; and

d.      Be current on the payment schedule of any part-pay agreement into which the employer has entered for payment of premium or assessment obligations.