Relating to employer recordkeeping and auditing requirements for purposes of unemployment insurance and including applicability provisions

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.