The HIdden Costs of Hiring Compliance

Compliance
Audits Risk
Fines & Penalties
Tax Form Errors
Delinquent Reporting
Immigration Violations
How Will You AvoidThe Hidden Costs of Non-Compliance?

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Outdated forms are sometimes used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

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)

What ICE May Find In An I9 Audit:
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
$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

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

Potential Fines For W-4 Violations
The 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.

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

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

SSA/IRS No Match Letters
In 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 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

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

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)

Contact Us Today To Learn More About Universal Onboarding
www.emeraldsoftwaregroup.com
3060 Royal Blvd South
Alpharetta, GA 30022
Phone: 770.569.5122 Fax: 678.669.1516

The HIdden Costs of Hiring Compliance

by Emerald Software Group on Mar 06, 2010

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