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SF 487

A bill for an act relating to employer recordkeeping and auditing requirements for purposes of unemployment insurance and including applicability provisions.

2025-2026 Regular Session

SF 487 would require employers to retain three years of payroll records and undergo department-led field audits with detailed checks of employee time records.

Referred to Workforce.
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Bill Summary · SF 487

Summary of SF 487 (Introduced March 4, 2025)

Purpose and scope

SF 487 would codify employer recordkeeping and auditing requirements for purposes of unemployment insurance under Code chapter 96. It moves certain requirements from department rules into statute and establishes procedural standards for department audits of employers. The Department of Workforce Development (or its equivalent) would conduct field audits to verify compliance with unemployment insurance provisions.

Key provisions

  • Retention of records: Employing units must keep records related to an employee for:
    • three years after the calendar year in which the related remuneration was paid; or
    • if remuneration was not paid but was due, three years after the calendar year in which remuneration was due.
  • Audit authority and procedures: The department must conduct field audits of employers to determine compliance with Code chapter 96. Audits would be carried out by department-employed employer field auditors, with the department empowered to establish additional procedures by rule.
  • Notice and preaudit interview: The department must provide reasonable notice of its intent to audit and establish procedures for a preaudit interview with the employer.
  • Records subject to audit: Potentially audit-relevant records include:
    • Individual pay records; W-2 and 1099 forms;
    • Cash disbursement journals and check registers (or electronic equivalents);
    • Federal and state tax returns;
    • Employer business licenses;
    • Legal documents related to the initial establishment of the business entity or to any employee for whom Code chapter 96 applies.
  • Detailed audit requirements: An employer field auditor must conduct and document a detailed audit of check stubs, weekly time cards, their electronic equivalents, or other maintained source documents for at least one employee for at least one quarter. The bill notes the detailed audit may be more extensive.

Affected parties

  • Employers (employing units) subject to unemployment insurance tax and benefits under Code chapter 96.
  • Payroll, HR, and accounting functions responsible for maintaining records listed in the bill.
  • The Department of Workforce Development, which would oversee audits and enforce the statute.

Procedural and timeline aspects

  • Status and actions:
    • Introduced: March 4, 2025; placed on the calendar.
    • Committee action: Report approving the bill (March 4, 2025).
    • Legislative actions listed include: Referred to Workforce (June 16, 2025).
  • Rulemaking: The department may establish additional audit procedures by rule.
  • Effective date: Not specified in the provided text; typically would become effective upon enactment or as otherwise stated in the bill’s final language.

Potential impact

  • Compliance burden: Employers would face formalized, statute-based recordkeeping retention (three years, tied to payment or due dates) and more explicit audit responsibilities.
  • Enforcement and oversight: More standardized field audits by department auditors could improve compliance monitoring for unemployment insurance.
  • Data sensitivity: Expanded access to and verification of payroll records and tax documents heightens considerations for data privacy and security.
  • Small businesses: The requirement to maintain detailed check-stub/time-card records for at least one employee for a quarter could impose incremental administrative costs, especially for smaller employers.

This summary captures the bill’s substantive provisions and potential effects based on the introduced text.

Compiled from official sources — confirm details with the bill’s official record.

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