What Employers Must NOT Do A Massachusetts man and his business were recently on charges of allegedly providing inaccurate payroll information to their insurer and payroll administrator to secure a lower workers' compensation premium and to avoid paying the full amount of unemployment insurance and state income tax. Arraignment is scheduled in Middlesex Superior Court in July, 2009.(workersxzcompxzkit) The charges are Unemployment Fraud (10 counts), Failure to Withhold State Income Tax (31 counts), Workers' Compensation Fraud (3 counts), and Larceny Over $250 (3 counts). The Insurance Fraud Bureau of Massachusetts (IFB) referred this case to the Attorney General's Office in September 2008 after an investigation into the company's payroll and an insurance claim filed by an employee allegedly not on the company payroll. According to authorities, workers' compensation was purchased for the policy years from September 2002 to September 2005. Authorities allege in an effort to obtain a lower workers' comp premium, the employer underreported its actual payroll by not reporting payments to undisclosed employees and not reporting overtime compensation. Authorities said the matter was referred to IFB for investigation after an auditor from insuring company discovered corporate tax returns filed by the man and the business for nearly $400,000 in payments to subcontractors, not disclosed in the premium audit. As a result of this alleged premium avoidance scheme, the business underpaid its workers' compensation insurer a total of $51,850 in premium payments. Author: Robert Elliott, J.D.
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