Our Award-Winning New York Employment Lawyer provides advice and counsel to many small businesses who are being investigated or audited by the New York State Department of Labor and other agencies with similar enforcement objectives. If you receive a Notice of Determination of Contributions Due in accordance with Section 571 of the New York State Unemployment Insurance Law, don’t be so quick to send in the payment. Many times the payment requested may be less than a hundred dollars and that may seem like a nominal amount but the payment may trigger a domino effect of government agency review and investigations.
In short, the payment for UI contributions are for unpaid state payroll taxes which means that the DOL has determined that your business had employees and the wages were not reported correctly. The notice typically comes from an UI Accounts Examiner in the Employer Accounts Adjustment Section in the Albany office. You should consult with an experienced employment lawyer to determine if you have any defenses to the DOL’s determination. For example, are they arguments to show that the workers at issue were truly independent contractors or should otherwise be exempt for UI coverage purposes. If there are colorable arguments, you may want to consider challenging the Department of Labor’s findings. Alternatively, if you pay the bill, it is possible you may get contacted by the IRS, the New York State Workers Compensation Board (which can assess significant penalty depending on the circumstances) and receive a follow-up notices from the Department of Labor for potential failure to file quarterly payroll returns.
This issue underscores the importance of implementing and developing best practices to ensure your record keeping and pay practices are compliant with the labor law.
Practice Pointer: If you believe that a worker is an independent contractor, consider having an attorney prepare an independent contractor agreement. That being said, the existence of an independent contractor agreement is not dispositive and does not make you bullet proof. But it can help. The attorney should review all of the factors in analyzing the working relationship and provide advice and counsel to other points that could be helpful to you.
If you have any questions regarding the Department of Labor, Independent Contractors, Workers Compensation or other agencies and their respective effects with your business – call our office for a confidential consultation.
Disclaimer: Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced attorney in your state or jurisdiction. From time to time, a blog post may discuss a legal case – please note that the post may not contain the most to update information on the case as developments may have occurred after it was created.