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State Misclassification Audit

This page provides a clear, factual overview of what a State Misclassification Audit involves, why organizations receive it, how risk is evaluated, and the typical steps required to resolve it. These insights are based on patterns seen across Tech, staffing, healthcare and common issues identified in audits.


Agency
DOL
Location
Colorado
Issue Type
Wage reporting errors
Risk Level
High
Common Reason
Incorrect withholding
Penalty
Retroactive employment tax liability
Fix Action
Reclassify workers and correct payroll filings
Year Range
6 years
Industry Examples
Tech, staffing, healthcare

How TCWGlobal Helps Companies Facing a State Misclassification Audit

Letters like the State Misclassification Audit often occur when organizations experience gaps in documentation, worker classification, onboarding processes, or payroll reporting. These issues become more common as companies scale, work with more contractors, or manage projects across multiple states and agencies.

TCWGlobal helps by supporting compliant payrolling for workers you already sourced, centralizing documentation, maintaining accurate worker records, and ensuring onboarding and reporting remain consistent across all projects and departments.

For industries like Tech, staffing, healthcare, where audits related to Wage reporting errors commonly appear, our team reduces risk by helping clients maintain clean worker files, correct classification, and auditable payroll data.

When issues arise, TCWGlobal supports you in preparing required documentation, correcting records, and implementing processes that help prevent future DOL assessments or penalties.

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Payrolling vs Temp Staffing

Third-party payrolling is a cost-effective alternative to traditional staffing. You hire your own workers and avoid agency markups while TCWGlobal manages payroll, taxes, benefits, and compliance. This approach keeps costs low, ensures smooth administration, and maximizes savings.