One of the things I appreciate most about our state agencies is the opportunities afforded to employers to correct errors made by the government. In a Washington State Department of Labor & Industries (L&I) audit, for example, businesses are not forced to accept incorrect audit results, but have several opportunities to correct audit determinations.
First, they and/or their representative can work with the auditor to ensure a proper audit decision in the first instance. Second, they can submit a first-level appeal of the decision (via a “Request for Reconsideration” process) and work with an appeal specialist who will review and reconsider the auditor’s decision, and hopefully spot and correct errors. Third, after Requesting Reconsideration, if they are still not satisfied, they can request a hearing in an administrative appeal. Fourth, once the appeal is initiated, even before the hearing, L&I will require that the appealing party participate in a mediation conference with the government in a final attempt to resolve differences. Fifth, apart from this process, or alternatively if there is a breakdown in this this process, they can request a Director’s Compromise where a designated person in L&I’s appeals department will review the request and determine if an assessment should be reduced. One of my proudest moments for a client (and this was for a relatively small matter) was deciding to submit a Request for a Director’s Compromise on behalf of a struggling small business owner who had unfairly lost his opportunity to appeal an assessment. L&I considered the request for compromise and modified the assessment and saved my client thousands of dollars. ESD has a similar option called an “Offer in Compromise.” See a blog I wrote on this a couple years ago.
While it’s easy to criticize government, and often the criticism is deserving, I’m thankful that agencies do afford businesses an opportunity to get errors corrected. Of course, the problem remains that it’s often an additional expense to businesses to correct errors. These appeals aren’t intuitive and hiring a lawyer who is familiar with the ins and outs of the process is often the best way to correct errors. And thus it’s often best for auditors to make the correct decisions in the first instance, and for parties being audited to do their best to ensure that they do.
