N.M. Admin. Code § 11.3.400.401

Current through Register Vol. 35, No. 21, November 5, 2024

Section 11.3.400.401 - EMPLOYER TAX ACCOUNT AUDITS

A. Records of Employing Units:

(1) Each employing unit shall keep true and accurate employment and payroll records which shall include, with reference to the employing unit the name and correct address of such employing unit, and the name and correct address of each branch or division or establishment operated, owned or maintained by such employing unit at different locations in New Mexico, all disbursements for services rendered to the employing unit; and with reference to each and every individual performing services for it, the following information:

(a) the individual's name, address, and social security number;

(b) the dates on which the individual performed services for such employing unit, including beginning and ending dates, and the state or states in which such services were performed;

(c) the total amount of wages paid to the individual for each separate payroll period, date of payment of said wages, and amounts paid to the individual for each separate payroll period other than "wages", as defined in the Unemployment Compensation Law;

(d) whether, during any payroll period, the individual worked less than full time, and, if so, the hours and dates worked;

(e) the reasons for separation of the individual.

(2) In addition to the records required by Subsection A of 11.3.400.401 NMAC, each employing unit shall keep and provide to the department upon request, the following:

(a) records to establish and demonstrate the ownership and any changes of ownership of the employing unit and the address at which such records are available for inspection or audit by representatives of the department. The records shall show the addresses of the owners of the employing unit or, in the event the employing unit is a corporation or unincorporated organization, such records shall show the addresses of directors, officers, registered agents and any person on whom subpoenas or legal process may be served in New Mexico. In the event the employing unit is a group account, the records shall show the address of the group representative; and

(b) records to verify any and all workers providing services to the employer are properly classified as employees or independent contractors such as the employer's general ledger or check register.

(3) If any payments other than money wages is paid to or received by an individual with respect to services performed by his employer, the records shall show the total amount of cash wages and the cash value of any other payments.

(4) All records shall be kept and maintained as to establish clearly the correctness of all reports which the employing unit is required to file with the department and shall be readily accessible to authorized representatives of the department within the geographical boundaries of New Mexico; and in the event such records are not maintained or are not available in New Mexico, the employing unit shall pay to the department the expenses and costs incurred when a representative of the department is required to go outside the state of New Mexico to inspect or audit such records.

(5) If an employing unit elects to maintain its payroll records on magnetic media, it shall be the obligation of such employing unit to reproduce such records on a media, readable by the human eye for the purpose of an audit.

(6) The records prescribed by this rule shall be preserved for a period of at least four years in addition to the current calendar year.

B. Employers must provide accurate work records at any reasonable time and as often as necessary for effective administration of the Unemployment Compensation Law.

(1) The department shall complete random audits of employer records to ensure compliance. Such audits will be conducted electronically whereby employers shall return any requested documentation electronically through the employer's online account.

(2) Employers shall return the required documentation within 20 days from the date of the audit notification letter. Failure to return all documents timely could result in the department seeking compliance through a subpoena and enforcement in district court.

(3) If the audit results in reclassification of employees due to employer misclassification, the employer has the right to appeal the determination following procedures in 11.3.500 NMAC. Penalties and interest assessed as a result of the determination shall not be abated. Any removal of penalties and interest must be addressed during the appeal process.

C. The department determines whether an individual is considered an independent contractor using the "ABC test" as defined in Subparagraphs (a) through (c) of Paragraph (5) of Subsection F of Section 51-1-42 NMSA 1978.

N.M. Admin. Code § 11.3.400.401

7-15-98; 11.3.400.401 NMAC - Rn, 11 NMAC 3.400.401, 9-1-2001, Adopted by New Mexico Register, Volume XXVII, Issue 22, November 30, 2016, eff. 11/30/2016, Amended by New Mexico Register, Volume XXX, Issue 20, October 29, 2019, eff. 10/29/2019