California audit rules
The WCIRB's rules, officer limits, dual wage classes and disputes.
Learn more →Pennsylvania workers' comp audit
Workers' comp audits in Pennsylvania: PCRB rules, payroll and disputes
Pennsylvania uses its own rating bureau and its own class codes, and it counts all overtime pay. Here is what that means for your audit.
Quick answer
In Pennsylvania, the Pennsylvania Compensation Rating Bureau (PCRB) maintains the Pennsylvania Workers Compensation Manual, which the Insurance Commissioner approves. A policy can only carry classifications the PCRB has approved, so codes from an NCCI state do not carry over.
The biggest difference for audits: Pennsylvania lists extra pay for overtime work as payroll. Unlike most states, there is no exclusion for the premium part of overtime. Executive officers count at a weekly minimum and maximum, and officers who meet the ownership test can be excluded, but only from the policy's effective date.
Disputes start with your carrier's regional audit manager. If that fails, the PCRB can rule, and its decisions can be appealed to the PCRB's Appeals Subcommittee and then to the Insurance Commissioner.
Pennsylvania counts all overtime, so untick the overtime premium box in the estimator. Estimate your audit bill free
How Pennsylvania counts payroll at audit
From Rule V and Rule IX of the PCRB manual. Officer limits shown are the current weekly figures.
| Item | Pennsylvania rule | What to keep |
|---|---|---|
| Overtime | All overtime pay, including the extra part, is payroll | Payroll register by employee and class. No overtime split is needed for the exclusion, but keep hours for class allocation |
| Tips | Tips are excluded once pay has been brought up to minimum wage. The top-up to minimum wage and automatic gratuities are payroll | Tip reports and the minimum wage adjustments |
| Benefits | Employer payments to group insurance, pension plans, HSAs and FSAs are excluded. Employee salary reductions to Section 125, retirement, HSA and FSA plans are payroll | Plan statements and a payroll deduction report |
| Expenses and allowances | Reimbursed business expenses are excluded only if shown separately and close to actual cost. Late-work meal money and uniform allowances are excluded. Hand tool allowances are payroll | Expense reports and separate pay codes for each allowance |
| Executive officers | Counted at no less than $1,347 and no more than $5,400 a week each. Part of a week counts as a full week | Names, titles, pay and weeks active for each officer |
| Excluded officers | An officer with ownership in an S corporation, or at least 5% of a C corporation, can elect exclusion on forms LIBC-509 and LIBC-513, filed with the insurer, effective only on the policy's effective date | Copies of both signed forms and proof the insurer received them |
| Sole proprietors, partners, LLC members | Not covered unless they elect coverage. If covered, the officer minimum and maximum apply, and business profit is not payroll | The election and each owner's pay |
Pennsylvania-specific mistakes that raise the bill
- Subtracting the overtime premium because another state allowed it
- Filing officer exclusion forms mid-term and expecting the exclusion to start right away
- Not refiling officer exclusions after changing carriers or after an officer's ownership changes
- Leaving a partially active officer's week out, when part of a week counts as a full week
- Missing the 12-month window after the policy ends to ask for a PCRB review or a construction premium credit
Pennsylvania audit checklist
- Pull payroll by employee and class for the policy period, with overtime included in full.
- List every officer with ownership share, pay and weeks active, and find the signed LIBC-509 and LIBC-513 for any excluded officer.
- Break out tips, minimum wage top-ups, expense reimbursements, meal money, uniform and tool allowances in their own pay codes.
- For construction classes, check whether your average hourly wage qualifies for the PCRB's construction premium credit, and keep third-quarter payroll and hours records for the carrier to verify.
- Collect certificates of insurance for every subcontractor for the dates of the work.
- Check the final audit results line by line, and raise any disagreement with the carrier's regional audit manager first.
How a Pennsylvania audit dispute works
From the PCRB's auditing guidance and Rule XVI of the manual. You do not need a lawyer to appeal.
- Send the dispute to your carrier's regional audit manager first, in writing, with the records that support your position.
- If it is not resolved, ask the PCRB to review it during the policy period or within 12 months after the policy ends. The PCRB may schedule a field survey or special audit and will issue a written ruling.
- To appeal the PCRB staff's final decision, write to the PCRB's Appeals Subcommittee within 30 days of that decision.
- To appeal the Subcommittee's decision, write to the Insurance Commissioner's Administrative Hearings Office within 30 days of the date it was mailed.
Keep reading
Florida audit rules
Construction exemptions, subcontractor proof and disputes.
Learn more →New Jersey audit rules
CRIB rules, tips as payroll, officer limits and appeals.
Learn more →New York audit rules
NYCIRB rules, officer limits, the construction cap and appeals.
Learn more →Texas audit rules
NCCI rules with Texas codes, non-subscribers and disputes.
Learn more →Payroll reconciliation template
A free template that lines up the payroll register, Form 941s, and workers' comp payroll by quarter.
Learn more →Frequently asked questions
Is overtime included in Pennsylvania workers' comp payroll?
Yes. The PCRB manual lists extra pay for overtime work as payroll, so the full overtime amount counts. Most other states exclude the premium part, which is why multi-state employers often get this wrong.
Does Pennsylvania use NCCI class codes?
No. Pennsylvania policies can only use classifications approved by the PCRB, under a manual approved by the Insurance Commissioner.
What are the Pennsylvania executive officer payroll limits?
The current PCRB manual sets a minimum of $1,347 and a maximum of $5,400 a week for each executive officer. The previous figures were $1,325 and $5,300.
Can an officer be excluded in Pennsylvania?
Yes, if the officer has ownership in an S corporation or at least 5% of a C corporation. The employer files forms LIBC-509 and LIBC-513 with its insurer, and the exclusion can only start on the policy's effective date.
How do I dispute a Pennsylvania workers' comp audit?
Start with your carrier's regional audit manager. If that does not resolve it, ask the PCRB for a ruling within 12 months after the policy ends. PCRB decisions can be appealed to its Appeals Subcommittee and then to the Insurance Commissioner, each within 30 days.
Sources
Official rating bureau and state agency pages this guide is based on.
- PCRB: Pennsylvania Workers Compensation Manual
- PCRB manual: Rule V, premium basis (payroll)
- PCRB manual: Rule IX, executive officers and owners
- PCRB manual: Rule XVI, appeals
- PCRB: General auditing and classification information
- PCRB: Construction classification premium credit
- PA Department of Labor & Industry: Form LIBC-513, executive officer affidavit
Important scope note
Practical prep guidance only.
This page summarizes Pennsylvania rules published by the PCRB and the Department of Labor & Industry for audit prep. It is not legal, tax or insurance advice, it is not a ruling on your policy, and the PCRB manual and your carrier's audit are the final word.
Get your Pennsylvania records in order before the audit
Start with the free checklist, check the likely bill with the estimator (leave overtime fully counted for Pennsylvania), or use the workbook to keep payroll, officer forms and subcontractor COIs in one file.