Hats Off to the Auditors! A Lawyer’s Perspective

Posting by Andrew Staab

As an attorney working to enforce contractual contribution obligations on behalf of Taft-Hartley benefit fund fiduciaries, I know that I cannot do my job without effective payroll auditors.  These professionals are the messengers of liability, sentinels of successorship, and interpreters of delinquency gobbledygook.  How do I express my thanks to payroll auditors?  I demand more from them.  Is that inappropriate?  To ask a payroll auditor for more is to validate and honor the work that they perform.  So, we should all ask for more!  It is one thing to get a sheet of paper from a payroll auditor stating the amount of unpaid and underpaid fringe benefit contributions.  It is quite another thing to sit through a deposition of a payroll auditor during which he/she shares information about the comprehensive process that was undertaken to make that sheet of paper a reality.

With Taft-Hartley Funds selecting from an expanded menu for collections, the payroll auditor’s input is the necessary ingredient for success.  Let’s say a pension fund has an opportunity to pursue mechanic’s lien or public payment bond remedies in addition to the routine collections litigation.  The payroll auditor must verify the amount due for each project, as well as the last date of work performed on each project.  Without this information, the Fund’s remedy is lost.

Let’s say the audit shows more 1099s than W-2s, and we recognize the 1099 recipients as Fund participants.  The payroll auditor calculates the amount of the 1099 and divides it by the appropriate pay scale to determine the hourly liability of the delinquent employer.  Let’s say there are no records of hours.  The payroll auditor will be asked to analyze hour estimates from unsuccessful bidders on the same project to determine the delinquency amount.  Let’s say that all the delinquent employer has is a shoebox of receipts.  The payroll auditor is asked to make a spreadsheet showing the employer’s obligation.

The payroll auditor is asked to calculate, recalculate, and then calculate some more to get to the right answer. So go ahead Fund Counsel and Trustees, acknowledge your payroll auditors and give them the respect they deserve and ask for more.  Oh, you may pay more as a result, but the results will certainly be worth it.  The payroll auditor is your foot soldier in the battle against delinquency.


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