B&J Bookkeeping & Taxes is dedicated to keeping you and your business safe from scams. One of the easiest to fall for are payroll scams, which are always changing. To help keep you informed, below is why you should beware of the new payroll services scam.

1. What is the scam?

USA Today reports of a payroll scam in Quincy, Massachusetts of a roofing company underreporting payroll. This allowed them to avoid paying out over half a million dollars in workers’ comp premiums. The owner was caught when he allegedly reported that he had little to no payroll during 2021 to 2024. However, the prosecuting attorneys allege that over $1.5 million was actually given out in payroll during that time.

Did you know? Fraudulent workers compensation claims can cost the nation billions of dollars every year, which translates to higher costs for everyone. Source: InsuranceOpedia

2. It Wasn’t the First Time

The company in question, The Roof Kings, had faced issues before. This included a fine of over $70,000 having to due with 32 safety hazards as cited by OSHA in 2017. Issues again arose in 2019 when this payment was not completed and the company was ordered to pay over $200,000.

3. How This Affects You

You may not own a roofing company, but these payroll scams can often happen. Failing to report payroll can have a number of causes including:

  • Avoiding workers’ compensation insurance payments.
  • Avoiding payroll taxes and other fees.
  • Hiding pay for workers who may not be eligible for work.
  • And many others.

4. How to Spot a Payroll Services Scam

As you can see above, this was not the first issue The Roof Kinds had. Once you feel things start to go wrong, they may very well be wrong. Unfortunately, even if you had nothing to do with the scam, you as the business owner may still be held criminally responsible, and have a high chance of having to foot the bill.

Did you know? Only half of employers use cloud based payroll tools, with 85% reporting issues with the technology? Source: Select Software Reviews

5. How to Avoid a Payroll Services Scam

These scams can happen a number of ways. This includes having your payroll tools hacked – either from within or without your business. You may have a worker with access to your payroll tools who is less than honest. And you may even have an outside party perform your payroll services who is unreliable. Whether an honest accident with your payroll or a nefarious operator, these kinds of scams can cost you big.

Payroll Services in Houston

Unfortunately, it is easy to fall for payroll scams. As a result, we highly recommend using the services of an impartial, experienced third party. Whether you pay weekly, biweekly, or other, have your payroll professional verify each check that goes out. Those of you who live in the Houston area or in Texas should contact us to learn more about how our payroll services can help keep your payroll safe.