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Onboarding new employees can be a legal minefield when it comes to getting the paperwork right. Particularly now, with agency budgets shrinking across the country, levying fines is an attractive way to boost revenues. This presentation, based on our popular article, "The Hidden Costs of Non-Compliance in Hiring", presents in concise format the potential fines and where they might come from.
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How Will You Avoid The Hidden Costs of Non-Compliance?
Compliance
Immigration Violations
Audits Risk
Tax Form ErrorsFines & Penalties
Delinquent Reporting
Non-Compliance in Hiring is Common
• New hires frequently make mistakes filling out forms
• HR doesn’t always catch errors and omissions
• Deadlines get accidentally missed• Constantly changing laws make it hard
to keep up• Outdated forms are sometimes used• Paperwork gets misplaced
How Will You Avoid The Hidden Costs of Non-Compliance?
A Few Of The Agencies That May Audit Your Organization Include:
• Immigration and Customs Enforcement (ICE)
• Federal Internal Revenue Service (IRS)
• Your State’s Revenue Service
• State Office of Child Support Enforcement (OCSE)
How Will You Avoid The Hidden Costs of Non-Compliance?
What ICE May Find In An I9 Audit:
How Will You Avoid The Hidden Costs of Non-Compliance?
• Missing I9 forms (either not filled out in the first place or not kept
for the required length of time)
• I9s completed incorrectly by new hire and/or employer
• Suspicious I9s that require further investigation
• HR’s failure to follow correct protocol in documenting worker ID
• I9s that list expired work authorization documents
• A pattern of technical/procedural errors in how I9 data is
collected
• Lack of a specific process for handling tentative non-
confirmations
• Discriminatory use of I9s and the E-Verify system
• Evidence that an organization is hiring unauthorized workers
Potential Penalties For I9 Violations
How Will You Avoid The Hidden Costs of Non-Compliance?
$110-1100 for every missing or incorrectly completed I9 form
Additional fines for systematic failure to collect I9 information correctly
$375-16,000 for every unauthorized worker found to be employed by the organization
Criminal penalties including jail time for business owners, HR executives, and hiring managers
How Will You Avoid The Hidden Costs of Non-Compliance?
What The IRS May Find In A W-4 Audit:Invalid W-4 forms
Examples of invalid forms include:• Multiple selections of filing status• Alterations to the W-4 form• Selection of a flat $ amount or fixed %
instead of the permissible allowances• Listing a withholding amount and
claiming full exemption
Common Violation: The Employer withholds at a rate other than Single/Zero allowances when an employee turns in an invalid W4 form
How Will You Avoid The Hidden Costs of Non-Compliance?
Potential Fines For W-4 ViolationsThe IRS may hold the employer liable for any unpaid taxes that should have been withheld under the Single/0 rule for invalid W-4s
EXAMPLE: Employee Jane Doe makes $50,000 per year. She turns in an invalid W-4 that has several items scratched out and rewritten. HR makes an assumption that she intended to list Married with 9 allowances.
As a result, the employer withholds approximately $360 in taxes for the year. The withholding for Single/Zero would have been around $7,800. The IRS can require the employer to pay the balance of $7,440
Additional fines and penalties may be assessed at the auditor’s discretion for the employer’s failure to follow proper withholding procedures.
How Will You Avoid The Hidden Costs of Non-Compliance?
What The OCSE May Find In A New Hire Reporting Audit:
• Failure to report new hires to the appropriate agency within the time frame (20 days or less) specified by the state
• HR not using a form for reporting that includes all relevant data as required by law
• Not having a process in place to report data at all
• Collusion with new hires to defraud the Child Support system
How Will You Avoid The Hidden Costs of Non-Compliance?
Potential Consequences For OCSE Violations
• A fine of up to $25 for each late-reported new hire
• A fine of up to $25 per month for each unreported new hire
• A fine of up to $500 for each instance of collusion
• Civil penalties such as suspension of an organization’s business
license
• Contempt of court charges for failure to pay fines in a timely manner Penalties and Fines Vary Greatly By State
How Will You Avoid The Hidden Costs of Non-Compliance?
SSA/IRS No Match LettersIn addition to penalties for W-4 violations, the IRS may also fine employers $50 for each instance of a mismatch between information submitted on a W-2 and data in the SSA’s system.
Failure to follow up appropriately upon receipt of an SSA no-match letter may also be used as evidence against an employer during an ICE audit.
How Will You Avoid The Hidden Costs of Non-Compliance?
How To Reduce Your Risk
Implement HRIS Technology That:• Always presents the most current version of each form during onboarding
• Consistently enforces all the federal/state business rules, eliminating errors
• Uses "virtual forms" that cannot be altered or left incomplete
• Automates the flow of documents to the hiring manager for final review
• Integrates with E-Verify to speed I9 verification and ensure new-hires are eligible
• Automates delivery of data to state new hire reporting systems in a timely
manner
• Eliminates re-keying of data from one system to another - reducing typos
How Will You Avoid The Hidden Costs of Non-Compliance?
Benefits Of Better Compliance • Your organization sends up fewer “red flags” that may
trigger an audit
• If an audit occurs, your risk of civil penalties is reduced because all your documentation is in order
• Taking proactive steps to increase compliance shows a good faith effort that works in your favor if any past errors are discovered
How Will You Avoid The Hidden Costs of Non-Compliance?
Universal Onboarding from Emerald Software Increases Hiring Compliance
Here are just a few of the features that will boost your compliance level• Onboarding - Forms Automation • "Instant" Implementations (Demographics, W4, I9, State Tax, etc.) • Federal Forms Included in Library: W4, I9, 8850, and more• State Forms Included in Library: All State W4s or equivalents • Electronic Signature Images (including signature images)• E-Verify interface (Department of Homeland Security) • State New Hire Reporting• User-definable Business Rules on Data Panels• Post-forms submission Integration to User Definable Workflows
(BPM)
How Will You Avoid The Hidden Costs of Non-Compliance?
Contact Us Today To Learn More About Universal Onboarding
www.emeraldsoftwaregroup.com
3060 Royal Blvd SouthAlpharetta, GA 30022
Phone: 770.569.5122 Fax: 678.669.1516