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Unemployment Audit

Discussion in 'Business Operations' started by grassmonkey0311, Jan 14, 2019.

  1. grassmonkey0311

    grassmonkey0311 LawnSite Gold Member
    Messages: 3,477

    2019 started off great with an Unemployment Audit from the state of MD. Joy.

    It's not really the end of the world, more annoying than anything else, but the auditor had a problem with temp/day laborers and not paying into unemployment. He was saying although you pay a day laborer cash, you still need to pay into unemployment. Has anyone heard of this? I was under the impression a day laborer is exempt from unemployment and not needed to pay into it- they are hired on a 1 time basis for a 1 time job, it's not long term. I'm not going to argue with him, it's only a difference of paying a whopping $16, but has anyone else had this problem?
  2. prezek

    prezek LawnSite Senior Member
    Messages: 612

    I’ve never been audited. I’m in the highest bracket every year though. What % do you pay?...to answer your question, I’ve never used any day laborers, so can’t help on that.
  3. OP

    grassmonkey0311 LawnSite Gold Member
    Messages: 3,477

    I'm on the lower side of percentages. I don't have a lot of employees and I've only had a few collect it over the years.

    I was surprised I'm being audited, but it sounded like the auditor was googling and found me (I have good SEO).
  4. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 19,056

    Hate to say it, but I've been saying this since we were audited and they got us for the same thing. Nobody believes me.

    I think we paid something like $400 for the past 10 years for the casual labor we didn't withhold for.
    hort101 and grassmonkey0311 like this.
  5. OP

    grassmonkey0311 LawnSite Gold Member
    Messages: 3,477

    Wow! So I guess it is something we have to do.... but how? I was asking the auditor and he was saying I should get with the payroll company to figure it out (he obviously couldn't give me an answer).
  6. That Guy Gary

    That Guy Gary LawnSite Gold Member
    Messages: 3,137

    I'd call the guy out right there and pressure him for an answer. Ask him how this audit can help you improve your compliance when he can't tell you how to handle something as basic as reporting income.

    A compliance audit isn't worth **** if they can't advise you on how to comply in the future and "hire someone" isn't good enough in my opinion.
    Mark Stark and Ma&Pa like this.
  7. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 16,542

    a day laborer only counts as day labor if they are hired to do something temporary that is NOT your main revenue source.
    So you can hire them to move your furniture and paint your office, but if they are raking leaves, they are normal employees.
    I only heard this recently, so I dont know if thats a change or something I never knew (or forgot).
    We've never used the "day labor" thing here, last time I did it (well it wasnt "me") was working for TG... "go down to home depot and get some day laborers"... I wasnt involved in the money side of things then, so i really dont know how it all came out in the wash.
  8. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 19,056

    It's "simple"...every person that works for you fills out the appropriate paperwork and taxes are withheld.

    This is why any applicant that asks if we pay cash is not interviewed.
  9. OP

    grassmonkey0311 LawnSite Gold Member
    Messages: 3,477

    I could tell he was new and wasn't trying to piss him off. I figured it's only $16 so I'm not worried about it.

    That's pretty much what he was saying too....that as soon as they start doing 'landscaping' tasks, unemployment needs to be taken out.

    So it sounds like that if you need help for a day, the temp labor needs to fill out tax forms? But if you hire a temp laborer to be a mechanic, he doesn't have to (according to the auditor).
    hort101 likes this.
  10. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 19,056

    I wasn't aware how it worked in other states, but basically we have anyone who works for us fill out the paperwork, they get taxes withheld and we pay the employer's portion just like seasonal, part time and full time employees.

    No more hassle from an audit. Just a hassle on our end. Although we haven't used day\casual labor in several years now.

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