Legal Question in Workers Comp in Arizona

Workers' compensation premiums are determined via system run by NCCI, an "independent" national organization. Theoretically, your premiums are based on the "exposure" to potential claims, as measured by a) the nature of the jobs your employees perform, and b) how much they earn each month (which in turn feeds into how much compensation they might collect each month.) You are required under the terms of your policy to submit your payroll information, which would include salary, bonuses and other income paid to your workers, and there is no cap on what you have to report on a person-by-person basis, but your premiums are calculated by a system that takes into consideration the cap on benefits contained in the law. It would not be wise for you to under-report payroll data, as doing so could result in loss of coverage, an audit, and a large retroactive bill.