Most Virginia employers are required to submit regular employment-related reports to the Virginia Employment Commission (“VEC”) and pay unemployment insurance taxes. Unemployment taxes finance a trust fund maintained by the VEC and are used to pay out unemployment benefits granted by the VEC to unemployed individuals. The VEC has the authority to perform audits of employers, but what is a Virginia Employment Commission audit?
The VEC conducts audits to ensure employers are reporting accurate information related to their employees—which is used for calculating an employer’s unemployment insurance tax rate—and ensuring correct unemployment insurance tax payment
VEC audits may be as simple as examining an employer’s records through correspondence or phone calls, and others are more complex, requiring an on-site visit from a VEC auditor to examine an employer’s recordkeeping.
The VEC administers Virginia’s unemployment insurance system—assessing unemployed individuals’ eligibility for claimed benefits and paying out their benefits when granted—and promotes reemployment and overall workforce growth within Virginia.
For employers, the VEC aids in finding qualified workers through applicant referrals to job openings. The VEC also oversees audits of employer accounts that contain tax reports supplied quarterly by employers.
A VEC audit serves to determine whether Virginia employers have accurately paid unemployment insurance taxes.
VEC audits are sometimes triggered when the VEC does not have wage records related to a former employee who has filed for unemployment benefits, revealing potential delinquency.
Other times, the VEC conducts audits of employer accounts randomly. VEC audits center around the VEC’s examination of an employer’s quarterly reports, which include wage, tax, and employment information.
If a VEC audit reveals that an employer’s account is delinquent, the VEC can order payment of any unpaid taxes and levy additional tax, interest, and penalties on the employer.
For filing unemployment insurance tax reports and to pay unemployment insurance taxes, employers must first register for and receive a VEC account number.
Employers can register online through iReg. Alternatively, employers can either obtain the registration form (Form VEC-FC-27) through a VEC field office or online and either mail it to Virginia Employment Commission, Employer Accounts, Room 108, PO Box 1258, Richmond, VA 232178-1358 or fax it to (804) 786-5890.
When an individual files an unemployment claim with the VEC, the VEC then requests information from their employer of record to confirm the cause of separation. Unemployed individuals are disqualified from benefits when separated due to misconduct connected to work.
The VEC defines misconduct as deliberate violations of reasonable company rules, as well as acts or omissions that show a willful disregard for the employer’s interests and of the employee’s duties.
Virginia has identified the following specific acts/omissions as misconduct: confirmed positive drug test results, lack of candor on job applications (particularly when related to criminal convictions), violations of Virginia regulations that risk the employer being sanctioned, and chronic absenteeism or tardiness.
The VEC ultimately determines whether the unemployed individual engaged in misconduct while taking into account both the unemployed individual and the employer’s explanations.
Note: Your date of birth and social security number is needed to confirm your identity.
Yes, most employers are liable to pay unemployment tax in Virginia. To determine liability, employers should submit the VEC Form VEC-FC-27, which is the same form to obtain a VEC account number. Once the VEC determines employers are liable for unemployment tax, employers are then required to file Employer’s Quarterly Reports for reporting wage, tax, and employment information.
Employers who have one or more employees who work for any portion of a day in 20 different weeks in a calendar year, or employers whose total gross payroll for any calendar quarter is $1,500.00 or more, are liable to pay unemployment tax.
If you are an employer contacted by the VEC for an audit and you seek assistance through the process, please reach out to The Lipp Law Firm, PC.
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