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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: January 22, 2021 11:31 AM
From: Representative Michael J. Driscoll
To: All House members
Subject: Protecting Employers/Employees from Payroll Processor Fraud
Employers hiring a payroll processor should have confidence that the payroll processor will fulfill their responsibilities and pay the correct taxes for their employees. Yet, when payroll processing fraud occurs, local businesses and their employees become responsible to pay any unpaid taxes, which they previously paid and entrusted to their payroll processor.
My legislation would require payroll processors operating in the Commonwealth to be bonded to cover any financial mistakes or fraudulent activity. Through these bonds, a processor’s clients would be protected in the event of errors or criminal activity, such as theft or fraud. Annual reporting will be required to the Department of Revenue to ensure proper coverage is maintained.
Payroll processors hired to provide a service must be held accountable when they fail to provide the professional services for which they were hired. It should not fall back on the employee or employer when these services fail.
I ask that you support this legislation and join me in helping protect Pennsylvania businesses and our workers from unneeded hardship when a payroll processor or one of its employees commits fraud.

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Introduced as HB497