Bills › 90th General Assembly
Relating to employer recordkeeping and auditing requirements for purposes of unemployment insurance and including applicability provisions
Topics:Jobs & workers
Where it is now
- Done: IntroducedJanuary 30, 2024
- Done: SubcommitteeFebruary 1, 2024
- Done: Senate committeeFebruary 8, 2024
- Done: Passes the SenateFebruary 21, 202445–0
- Done: House committeeMarch 14, 2024
- Stopped: Passes the HouseDied when the General Assembly ended
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2024 session adjourned on April 19, 2024, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary Employers must keep employee records for three years after the year they were paid or were due to be paid. The Department of Workforce Development will also perform field audits to check these records and ensure businesses are following unemployment insurance laws. These audits include reviewing documents like pay stubs and tax forms, and the department must provide notice to the employer before starting.1
Read the official explanation
This bill relates to employer recordkeeping and auditing requirements for purposes of unemployment insurance under Code chapter 96. Current requirements for these matters are largely set out in rules of the department of workforce development. The bill requires that an employing unit keep records regarding an employee that are required for purposes of unemployment compensation for three years after a calendar year in which remuneration that the records relate to was paid to the employee. If the employing unit did not pay remuneration, but remuneration was due, the employer shall keep records regarding an employee that are required for purposes of unemployment compensation for three years after the calendar year in which remuneration was due. The bill requires the department to conduct field audits of employers by examining employer records to determine compliance with Code chapter and establishes procedures for such audits. Such audits shall be carried out by employer field auditors employed by the department. The bill authorizes the department to establish additional procedures for employer field audits by rule. The bill requires the department to give the employer reasonable notice of the intent to audit and provides procedures for a preaudit interview with the employer. The bill provides that records that may be subject to audit include individual pay records, W-2 and 1099 forms, cash disbursement journals and check registers or the electronic equivalent thereof, federal and state tax returns, business licenses of the employer, and legal documents related to the initial establishment of the business entity or to any employee to whom the applicability of Code chapter is in question. The bill requires an employer field auditor to conduct and document a detailed audit of check stubs, weekly time cards, the electronic equivalent of such documents, or other maintained source documents for at least one employee for at least one quarter. The detailed audit may be more comprehensive if the employer field auditor finds discrepancies in such records. The bill requires the department to establish procedures for an employer to contest an employer field auditor’s decision regarding the applicability of Code chapter to an employee. The bill provides that in any disputed case, the employer field auditor may, at the discretion of the presiding officer, be granted access to records to determine the remuneration paid for any calendar quarter at issue occurring within three years prior to the department’s issuance to the employer of a notice of intent to audit. The provision of the bill relating to audits applies to audits conducted by the department of workforce development pursuant to Code chapter commencing on or after the effective date of the bill.
House subcommittee
Named February 26, 2024. On March 6, 2024 it recommended amendment and passage. Vote Total: 2-0.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
Cost: up to $216,000 Compare with other bills
AI summary This bill changes the rules for how employers keep records and how Iowa Workforce Development conducts audits for unemployment insurance. Because the bill makes in-person interviews the default instead of virtual ones, it is estimated to cost the state's General Fund $216,000 annually due to the need for 2.0 additional field auditor positions.3
Read the fiscal note
Description
Senate File 2152 relates to employer recordkeeping and auditing requirements for unemployment insurance. The Bill requires that an employing unit keep certain records regarding an employee for three years.
The Bill requires Iowa Workforce Development (IWD) to conduct field audits of employers by examining employer records to determine compliance with Iowa Code chapter 96. Prior to an employer field audit, IWD must give the employer reasonable notice of the intent to audit and conduct an in-person preaudit interview with the employer, unless a virtual preaudit is mutually agreed to.
The Bill specifies which employer records are subject to an employer field audit. This includes individual pay records, W-2 and 1099 forms, cash disbursement journals and check registers, federal and State tax returns, business licenses of the employer, and legal documents related to the initial establishment of the business entity or to any employee to whom the applicability of Iowa Code chapter 96 is in question.
The Bill requires employer field auditors to verify proper compliance with reporting requirements by the employer and requires IWD to establish procedures for an employer to contest an employer field auditor’s decision.
Background
Current requirements for employer recordkeeping and auditing requirements for unemployment insurance are largely set out in Iowa Administrative Code 871. Pursuant to 871 IAC 22.1(1), an employing unit must keep records required by IWD regarding an employee for five years. Under current practice, preaudits are conducted virtually unless requested to be done in person. In calendar year (CY) 2023, IWD conducted a total of 685 preaudits, of which 614 were conducted virtually and 71 were conducted in person. The U.S. Department of Labor requires IWD to audit 1.0% of employers (877) in Iowa each year.
Assumptions
- Approximately 90.0% of preaudits are currently conducted virtually.
- The proportion of preaudits conducted in person will increase from 10.0% to 20.0% as a result of in-person preaudits becoming the default option.
- For each 10.0% increase in the proportion of preaudits conducted in person, each auditor’s monthly production is expected to decrease by one preaudit per month as a result of travel time.
- The total cost of 1.0 Field Auditor full-time equivalent (FTE) position is $108,000.
- Funding for field auditors is appropriated from the General Fund.
- Employer records no longer subject to an employer field audit under the Bill include the chart of accounts, general ledger, balance sheet, and profit and loss statement.
- The results of field audits are dependent upon the information reviewed by field auditors.
Fiscal Impact
Senate File 2152 is estimated to increase the number of in-person field preaudits by 10.0%. As a result of increased travel time to conduct in-person preaudits, IWD anticipates the need to hire 2.0 additional Field Auditor FTE positions at a total annual cost of $216,000.
Source
- Iowa Workforce Development
- Employer Field Audits · February 20, 2024 · $216,000
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90th General Assembly
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Earlier and later bills are matched by wording or an identical title.
Similar bills
- SF 487 Relating to employer recordkeeping and auditing requirements for purposes of unemployment …91st General Assembly · Passed SenateNearly identical
Matched by wording or an identical title.