In recent years, the New York State (NYS) Department of Labor has hired investigators and increased the number of unemployment insurance audits conducted. As a result, more and more companies are being subjected to expensive and time consuming examination of their business practices and records. Many times companies are too busy running their operations and ignore these audit notices. This is the worst thing you can do, as a subpoena and an adverse administrative Order may follow. A notice of an audit is a serious matter that requires the appropriate legal skill in crafting a strong defense. Your response to an audit can not only subject to monetary fines and back taxes but it can affect your business model going forward. It is critical to get experienced legal counsel from the start. Our Employment Law Attorneys have guided and protected many business owners – call us to learn how to defend yourself and assert your rights.
There are many events that can trigger an audit. Two common reasons include the payment of wages “off the books” and inappropriate use of independent contractors (that is, classifying a worker as an independent contractor instead of as an employee). While an employer may believe engaging in one of these practices may save them money in short run by avoiding payment of payroll taxes and employee benefits, it can be disastrous in the long run once a lawsuit or administrative investigation is commenced. For example, a simple and seemingly innocous event such one of the workers filing for unemployment insurance benefits is often a triggering event. This filing will cause a review of your business and a potential order demanding payment of back payroll taxes for three (3) years. Not only could these practices subject you to administrative claim, they could also expose to you to private lawsuits for wage and hour violations. These lawsuits are on the rise and can affect almost every small business. There are certain record keeping requirements that every employer must maintain in New York State. For example, the Wage Theft Prevention Act requires employees sign a Wage Notification Form at specified times. Failure to maintain records is a separate violation and the lack of records can be damaging in your defense of an administrative claim or lawsuit. It is important for employers to seek counsel of an experienced employment lawyer prior to initiation of an audit or claim so that the appropriate preventative measures are in place. Many employers believe that ignorance of the law or lack of bad intent is a strong defense but that is not always the case and that is a dangerous practice. Knowledge is critical here.
We have significant experience in counseling and defending employers in New York before the New York State Department of Labor. Accountants and other attorneys often seek our counsel. Call our office at (800) 893-9645 to confidentially speak with our lead Employment Law Attorney.
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 employment law attorney in your state or jurisdiction.