Recently there has been an increase in the number of unemployment audits being completed by the Ohio Department of Job and Family Services (ODJFS). What is it looking for? It is reviewing employee records to verify that unemployment taxes are being paid for each of your employees.
The audits are completely random, so how can you prepare? Here are some things to keep in mind and be aware of:
- Every employee needs to be added to your payroll. Whether they are an employee for a few days or for 10 years, they need to be entered into your payroll. There may be times when you hire someone on a trial basis to see how he or she will work out at your dental practice. They still need to be on your payroll and you need to be paying unemployment taxes for them. It can create more work, but will be a red flag if you are audited.
- Go through a temp agency. If you like to see how an employee works at your dental practice before you add them to your payroll, go through a temp agency. This will protect you as the unemployment taxes for that individual will be paid by the temp agency and you won’t have to add them to your payroll until you are sure they are a good fit.
- Dental hygienists can’t be subcontractors. According to the ODJFS, a dental hygienist can’t work on their own, as they need to always be supervised by the dentist. During the audit process, the state will be reviewing your 1099s, and if one is found for a dental hygienist it will be an instance of non-compliance.
- Once an error is identified, the state may audit previous years. While completing its audit on last year’s employee files if the state discovers any issues this may lead them to check back further and look at other years.
Audits can be a big headache. They are very time consuming and can take you away from running your dental practice. Also, there are penalties and interest you may have to pay if it is discovered there are missed unemployment tax payments. Take the proper steps in the beginning when hiring new employees because it could save you additional time and money if your dental practice is audited.
Contact Rea & Associates