Fraud Prevention: What Employers Need to Know

As an employer, you play a key role in making sure that your business follows the rules and prevents fraud. Taking the correct actions can help you avoid costly mistakes and penalties. Here's how you can stay on top of your responsibilities and protect your business.

1. Classify Workers Correctly

Make sure you classify workers as either employees or independent contractors.

• Employees: Employers must pay unemployment tax on employees’ wages.
• Independent Contractors: Employers do not have to pay taxes on their earnings.

If the N.C. Division of Employment Security (DES) finds that you have misclassified workers, you may have to pay additional taxes, plus interest and penalties.

2. Check Your Benefit Charges

DES sends employers a list of benefits charged against their account. These charges can impact your unemployment tax rate. If you disagree with any of the charges or find errors, follow the instructions in the notice to protest the charges before they affect your rates.

3. Submit Accurate Wage Information

Give correct wage information when you file your quarterly reports. Accurate wage information means that unemployment benefits are paid correctly to those who qualify. This helps avoid mistakes that could lead to overpayments or underpayments.

4. Respond to the National Directory of New Hires (NDNH) Notice

The National Directory of New Hires (NDNH) shares employment and unemployment information to help child support orders. DES uses this database to find people who may have returned to work but are still filing for unemployment benefits. Be sure to quickly respond to any NDNH notices you get.

5. Request for Separation Information

After a claim is filed, DES will let you know the reason for separation. You can confirm or challenge this information. You should respond in 10 days to prevent improper benefit payments.

6. Act on Wage Audit Notices

You should complete and return Wage Audit Notices to DES within 14 days.

Wage Audit Information