The Labor Enforcement Task Force, under the direction of the Department of Industrial Relations, is a coalition of California State government enforcement agencies. Together, the agencies work to combat the underground economy.
What is the Underground Economy?
According to LETF, the ‘underground economy’ refers to, “any business which operates without the necessary licensing, does not pay taxes or carry the required insurance or worker’s compensation coverage, or forces its employees to work in unsafe conditions, or otherwise attempts to gain an unfair economic advantage by avoiding its tax and labor responsibilities.”
Why would LETF arrive at my door?
LETF performs inspections statewide on many different businesses. If you are selected for an inspection, it means one of two things:
- A submission of complaint from an informant has been made, or
- Your business has been selected at random based on compliance levels, seasonality, and location
What does a LETF inspection entail?
LETF inspections on average, last about an hour. If an inspection team arrives at your office, apart from providing them with payroll records, licensing and insurance documents, you will need to give them access to a conference room and allow employees to be interviewed.
What specific documents do they need?
LETF teams inspect:
• Validation for appropriate licenses
• Proof of workers’ compensation insurance coverage
• Postings required by state and federal labor laws
What Do I Do If I Am In Violation?
Once the inspection has been conducted, the inspectors will explain if any violations were found and if any citations will be issued. Employers always have the right to appeal citations.
How Can I Avoid An Inspection?
Unfortunately, if you are selected at random – it’s not something you can avoid. The good news is you can put processes in place to ensure you are following the correct guidelines. One way you can do this is to incorporate systems that automate your workforce processes.
With an advanced cloud-based time and attendance system your company can automate any federal or state tax regulations simply and efficiently. With the push of a button, accurate time and attendance data is automatically updated into your payroll system.
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