Enforcement

Audit and investigation – The Department of Labor conducts audits of employers as authorized by UI Law § 575. Audits ensure compliance and accuracy in coverage of workers, reporting of wages, and payment of contributions due. These activities help to keep UI rates low and provide for fair and equitable treatment of all employers. Questions regarding audits and investigations should be referred to your local UI employer services office (see Unemployment insurance employer services offices ).

Consequences of late or inaccurate reporting – It is important to file a return for each quarter, even if there is no payroll in a particular quarter, to avoid penalties and to ensure that the most accurate UI rate is assigned. (See Seasonal employers for an exception.) Contributions paid more than 60 days after their due date are not credited to the employer’s experience rating account. As a result, they are not considered in the computation of the employer’s UI rate. This means that an employer is likely to be assigned a UI rate that is higher than if the contributions were paid on time. Also, failure to file a return may result in a penalty (see Summary of penalties ).

Employers who do not pay UI contributions when due are charged interest at the rate of 12% (0.12) per year on the unpaid balance. Interest is assessed from the date payment was originally due and may not be waived or reduced.

If an employer fails to file a required return or files an inaccurate return, and then fails to comply with a written request for a corrected or sufficient return (within 30 days of the request), the Commissioner of Labor will estimate the amount of the contributions due and wages paid based on available information. The estimated wages will be used in the calculation of future UI rates and may adversely impact the rate. Failure to file all quarterly returns completely and accurately may result in the assessment of additional penalties (see Summary of penalties ).

Collection of overdue contributions – The Department of Labor takes its duty to collect delinquent contributions seriously. There are substantial penalties and severe restrictions that the Department may impose in meeting this charge. Department employees are available to work with employers and assist them in meeting their obligations. Due to changes in business conditions, the economy, or for personal reasons, businesses may find themselves in arrears on contributions due. The Department of Labor is willing to work with employers in difficult times.

A Department of Labor representative can assist an employer with various payment options. It is necessary for employers to communicate problems to the Department to avoid possible action that could restrict business operations and increase debt. Employers facing temporary difficulty in meeting their obligations should call 1-800-456-1015 (also see Need help? ) for assistance.

If an employer ignores its obligations and defaults on payment of any amount determined due under the UI Law, the Department of Labor is authorized to file a warrant in the office of your local county clerk to secure payment of the amount due. When filed, a warrant becomes a judgment and a lien against all real property in the county where filed or transcribed. The warrant becomes a matter of public record and may seriously affect the employer’s credit rating. Once a warrant is filed, the Department may proceed with active collection. Active collection may involve: seizure of the employer’s bank accounts, property, inventory, accounts receivable, or any other asset. The Department may also refer the employer’s account to other state and federal agencies for seizure of any tax refunds or contract payments due the employer. Employers may also lose certain tax credits and licenses for failure to comply with the law.

Indian tribes who fail to make all required payments lose the right to elect the benefit reimbursement option and become liable under the FUTA. Failure to pay required contributions could result in termination of coverage and the employees of the tribe not being covered for UI.