Rapid growth led to oversights of licensing.
John owns a construction company and business has been booming. In the last 18 months they have doubled their workforce in both full-time office and managerial help and in the contractors they use to provide the work on worksites. At the start of each job, John’s team reviews every worker’s license information. The onboarding process is simple but they’ve always felt it was effective. 1099 workers submit license numbers that are filed by the internal HR director (who is also John’s wife).
When the first notification came from EDD they were in shock. Everybody hears about other companies getting audited, but John and his team were really on top of licensing and they weren’t trying to subvert the system. What had triggered the audit?
As we worked with the auditor and with John and his team to address the issues it was revealed that not just one but a number of the workers on a big job site had licenses that were either lapsed or had been revoked. In addition, there were 2 cases in which the workers’ licenses were in good standing but the work they were doing was outside of the license they held.
All of this came to light for EDD when they performed a Site Sweep in the area and started to look into every single worker on the worksite.
What could John have done differently? He checked all the boxes, or so he thought. The fact is, on bigger jobs license checks should be performed monthly – at least – not only at the start of the job. Additional check scan notifies the employer before an EDD audit and allow that employer to make the necessary changes in real-time as opposed to trying to retroactively repair mistakes made sometimes as long ago as 3 years.
Ready to check on your own workers? Get your got1099 report started, today!