# COMAR Title 09 — Maryland Department of Labor

## Subtitle 32 — Unemployment Insurance

### Chapter 10 — Employer Audits

**Authority:** Labor and Employment Article, §§8-305, 8-306, 8-602, and 8-625, Annotated Code of Maryland

**Administrative History:** Effective date: July 26, 2010 (37:15 Md. R. 998)

**Administrative History:** Regulation .05H, I amended effective April 24, 2017 (44:8 Md. R. 403)

#### Regulation .01 Purpose.

*COMAR 09.32.10.01*

This chapter sets out the Division of Unemployment Insurance's procedures for conducting an audit, the related requirements for employers, and procedures for agency level review prior to appeal.

#### Regulation .02 Definitions.

*COMAR 09.32.10.02*

For the purpose of this chapter, “audit” means a review of an employer's records to ensure compliance with the Maryland Unemployment Insurance Law and regulations.

#### Regulation .03 Audit Process.

*COMAR 09.32.10.03*

A. Assignment.

  (1) Upon receipt of an audit assignment, a field auditor shall send an audit notice letter to the employer advising that the employer is the subject of an audit by the field investigation and audit unit.

  (2) The letter shall:

    (a) State the authority for conducting the audit;

    (b) Contain a list of records that the auditor will review in order to conduct the audit; and

    (c) Request that the employer contact the auditor within 15 business days to arrange a convenient time to conduct the audit.

B. Failure to Respond.

  (1) If the employer fails to respond to the initial audit notice, the auditor shall send the employer a final audit notice requesting that the employer contact the auditor within 10 business days.

  (2) The notice shall advise that if the employer fails to contact the auditor within 10 business days, a subpoena duces tecum may be issued compelling production of records.

C. After the audit has been scheduled, the auditor may do any or all of the following:

  (1) Require a meeting with the employer or the employer's designated representative;

  (2) Interview the workers in question; or

  (3) Request additional information or documentation from the employer.

D. Upon completion of the audit, if the auditor determines that no adjustment is necessary, a letter shall be sent to the employer advising the employer that no violation of the Maryland Unemployment Insurance Law was found for the audit period.

E. Adjustments Needed.

  (1) If, after completing the audit, the auditor finds that adjustments to the employer's account are warranted, the auditor shall notify the employer of the audit findings and the adjustments to be made to the account.

  (2) The Preliminary Audit Findings letter shall state the basis for the audit findings, based on information the auditor has received.

#### Regulation .04 Records.

*COMAR 09.32.10.04*

A. An auditor may request any records necessary from an employer including, but not limited to, those set forth in the Labor and Employment Article, §§8-306(b) and 8-625, Annotated Code of Maryland, and COMAR 09.32.01.06. Refusal or failure by an employer, or the employer's representative, to provide requested records to an auditor may result in the issuance of a subpoena.

B. Refusal or failure by an employer, or the employer's representative, to provide requested documents after issuance of a subpoena may result in either or both of the following:

  (1) Judicial enforcement of the subpoena; or

  (2) Placement of estimated assessments on the employer's account. No judicial action to collect on estimated assessments will occur until a final determination is made.

#### Regulation .05 Appeal of Audit Findings.

*COMAR 09.32.10.05*

A. If an auditor determines that adjustments to an employer's account are warranted, the auditor shall issue preliminary audit findings.

B. If the employer disagrees with the preliminary audit findings, the employer may request a review determination within 30 days of the date of the preliminary audit letter.

C. Upon receipt of a request for a review determination, a reviewer designated by the Secretary shall be assigned to conduct the review determination.

D. The designated reviewer may:

  (1) Review the audit work papers;

  (2) Speak to the employer and designated representative; and

  (3) Request any additional information the reviewer deems necessary.

E. In addition, the employer may provide any documentation to the reviewer that the employer believes supports its position.

F. If the employer fails to provide the additional information requested by the Reviewer within the timeframe established by the Reviewer, the Reviewer shall make a determination based on the available information.

G. Upon completion of the review determination, the reviewer shall prepare a detailed written decision affirming or reversing the findings of the field auditor.

H. The review determination shall:

  (1) State in detail the facts upon which the reviewer relied in order to affirm or adjust the audit findings; and

  (2) Advise the employer that if the employer disagrees with the review determination, the employer may file an appeal with the Board of Appeals in accordance with procedure and time periods set forth in the Maryland Unemployment Insurance Law.

I. If an employer does not request a review determination within the 30-day period for requesting a review determination:

  (1) The preliminary audit findings shall become final; and

  (2) The employer shall be sent a notice of determination advising the employer that the employer may file an appeal with the Board of Appeals in accordance with procedure and time periods set forth in the Maryland Unemployment Insurance Law.