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  1. #1
    Join Date
    Mar 2010

    Default Former Employee Denied Unemployment Due to Employer's Failure to Pay Taxes

    State: Florida

    The business I work for did not pay unemployment taxes in the state of Florida for an employee who worked out of his home there from 2006 until the present. Instead, we paid the taxes in Louisiana, where our physical business is located. We recently laid him off. He applied for unemployment benefits in Florida, but he was told that he did not qualify because we had not paid our unemployment taxes there. Wouldn't Florida go after our business instead of denying him his benefits that he is entitled to as a resident of Florida? This happened to us before in the state of Illinois, and they gave the employee benefits but sent us notices that we needed to register and pay and threatened to assess a lien against us. Of course, I have NO IDEA why my business would be so stupid as to not pay unemployment insurance taxes and then lay someone off.

  2. #2
    Join Date
    Jun 2006

    Default Re: Former Employee Denied Unemployment

    It depends on the state. Some go after the business, others simply (at least initially) deny benefits.

  3. #3
    Join Date
    Dec 2007

    Default Re: Former Employee Denied Unemployment

    I don't know why they would be so stupid as to not register as an employer and pay the unemployment taxes whether they were going to lay off anybody or not.

    I take it you're not in a position to do anything about this, or at least document the case that the employer is violating state laws?

  4. #4
    Join Date
    Mar 2010

    Default Re: Former Employee Denied Unemployment

    Hi, everyone! Thanks for the responses.

    Well, Patty, believe me when I say that this has been one big hoopla. My company had employees in about 20 states and was only registered in 8 to pay unemployment, withholdings, etc. For the people in the 12 states where we were not registered, we were paying unemployment taxes on their wages to Louisiana, where our main office is located, although these people had never set foot in Louisiana. This had been going on since 2006 in some states. I kept telling the payroll coordinator and my supervisor that this was not the proper way to do things. Finally, the finance manager, who is in charge of renewing insurance, including worker's comp, got wind of this when the insurance agent asked her for our New Jersey employer number for our worker's comp policy. When she found out that we didn't have one, the insurance agent said there was a New Jersey statute that said he had to report us as non-compliant. She asked our in-house legal counselor and CFO whether or not we should register, and the legal counsel got upset that she had even told our insurance broker that we had employees in any state other than the 8 where we were registered. He basically made her go back and ask why we had to have a worker's comp insurance policy in New Jersey. Of course, the insurance broker said that if we didn't get one, we would be in SERIOUS violation of state laws and could become liable for penalties and fines, as well as imprisonment of officers, associated with being in violation of the law, not to mention what we would be liable for if someone actually had an accident. He also said that at this point, if we refused to purchase one, he would ethically have to back away from us because he could lose his license if he lied about where we had employees. I'm not exactly sure what happened in the end, but we ended up getting a worker's comp policy in New Jersey.

    Fast forward about a month or two, and the CFO and legal counsel, as well as the CEO, decided that we would register for unemployment, withholdings, etc, after much pushing from myself and the finance manager, in all remaining 12 states. It was decided by these same people that we would register and pay going forward but not pay any back taxes. If we were asked for information about employment in years prior to 2010, we would not misrepresent the information, but we would not freely give the information either because it would be an administrative nightmare to go back and file all the back taxes and file amended returns in Louisiana.

    I was asked to assist in registering. I completed the Ohio application for unemployment, which asked for the date we began employing people in Ohio. I put the actual date, since we were not supposed to misrepresent, but I needed an officer to sign off on the form. I asked the legal counselor to sign off on the form, but he did not feel comfortable doing so because I had put the actual date, when there was a corporate decisoin not to start paying taxes until 1/1/10. I told him that I was NOT lying about the date on the form. He asked me to send the form to the finance manager and CFO to get their opinions, which I did, and if they were okay with it, he would sign off. He said that we could argue that we didn't have a liability in Ohio because mulit-state employment is complicated. The CFO told me that he didn't know what other date to put on the form, but he didn't seem happy about that date.

    The next day, my supervisor had a meeting with me and the finance manager and told us that she had talked to the CFO, and he told her that we would put 1/1/10 as the date we began employing people b/c that was the day "corproate" decided we would start paying taxes. I basically freaked out and told her I was going to find a new job because this place was unethical. The finance manager backed me up on this stand. My supervisor then called a meeting with the CFO, and he backed down at that point and said we should not lie on the form. But he still kept saying that we deviatd from the plan, which is funny, because I have notes from our original meeting, in which I asked, "What if they ask us when we hired people?" to which he responded, "Then we will not misrepresent." I think he was just getting pressure from the legal counselor to lie about the date. I asked him why, if we could argue that we didn't have a liability, don't we just put the correct date and then defend our position? Why lie about the date because we don't really have a liability? I have no idea who they were trying to fool, but it didn't work on me. He said that it was because we didn't really have a great defense.

    At the end of the day, sometimes I wonder why I've kept this job, but I guess it's because they didn't fire me when I stood up and said "No, I'm not going to lie." I just have no idea why the legal counselor is such a crackerjack, and why they thought that paying the unemployment taxes in Louisiana was an acceptable practice. I still hear my CFO say that we can defend our position by saying that we had good intentions and paid the taxes in the wrong state. I don't think it matters because we didn't do it right. In fact, right now, New York is trying to fine us a significant amount because we did not have a worker's comp policy there prior to 2008, although we had people there in 2007. He seems to think that we can defend our position by proving that we thought the person was covered on our Louisiana worker's comp policy. I still think that we can very well be fined because we were in violation of the law in New York, whether or not we intended to be. The road to hell is paved with good intentions.

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