Posted on July 25th, 2019
Below is a complete transcript of this video.
What’s up fellow entrepreneurs is John Fagerholm from California Employer Attorneys coming at you from the beautiful USC campus.
I was a visiting a client that’s near here and I thought I would pop in and have lunch. It’s been a while since I’ve been here and it’s actually been awhile since the weather’s been good in California.
So thought I would shoot this outdoors.
Today I want to talk about what I was doing with this particular client that I just visited and they had an EDD audit.
Basically, what an EDD audit is is there’s a labor thug, I’ll call them, that’s assigned to your case. And what they do is they say hey, we think there’s a problem with something.
We think there’s a problem with the way you’re paying somebody or whatever the audit is about.
And then they say send us your records for the past three years for this particular company. Then you’ve got to go through, find all those records, usually it’s payroll, schedules, just at on of stuff.
Then you have to turn that over to them and then they get to pick through it, figure out if they can find something wrong with it so that they can fine you with some money.
That’s how insane this system is. But it is what it is.
What I was doing over there was, first of all, making sure that they complied with the audit. Usually it’s based on a subpoena if you don’t cooperate.
And then if you do cooperate, it’s just an order, an order to appear is what it’s called. But you really don’t have to appear, you just have to send over the documents.
So the reason why I get involved is because a lot of times clients will send over everything and that’s not the correct way to do it.
They have to ask for very particular things and you want to make sure that you’re, number one, complying with this so there aren’t any more problems, but number two, you want to make sure that you’re not giving them more than what they’ve asked for.
So that’s what I was doing over there and going through the records, looking over what the exact language was. You’d be shocked at how bad they are at writing these things and how many things you can argue about because they never write them correctly.
But at the end of the day, they’re just looking to fine you for something. I’ve had situations where they didn’t find something on the first round, then they did a second round and a third round, and at some point we’re just like hey, what’s it going to take just to make this go away?
And it’s usually just a dollar amount because that’s the system we live in.
So my advice to anyone that gets one of those order to appear, or a subpoena, which we’re calling an EDD audit, because that’s really what it is, is to first stop, don’t panic, start figuring out where the records are.
Then call an attorney so that you can make sure that you’re actually complying with it correctly and that you’re not giving them more than they’re even asking.
All right, everybody, until next time, great speaking to you.
