PHILADELPHIA – A pair of Philadelphia-based paratransit services say a New Jersey human resources firm failed to file unemployment compensation fund documents, leaving them to be financially penalized by the Commonwealth of Pennsylvania.
American Patriot Ambulance Service, Inc. and Frontier Transit, Inc., both of Philadelphia, filed suit in the Philadelphia County Court of Common Pleas on June 10 versus the Department of Labor and Industry Office of Unemployment Compensation Tax Services of the Commonwealth of Pennsylvania, in Harrisburg.
From the beginning of Q3 2011 through the end of Q3 2015, plaintiffs retained the services of Human Resources Management (HRM), based in Lumberton, N.J. The plaintiffs were to open a joint bank account with HRM, which would be a signatory on the joint account and could withdraw funds to pay the associated federal, state and municipal taxes with the employees it provided to each of the plaintiffs, the suit says. Therefore, the plaintiffs co-opened an account with TD Bank and provided HRM with access to it.
“HRM provided employees to American for work in Pennsylvania from the third quarter of 2011 through the end of the third quarter of 2015. HRM provided employees to Frontier for work in Pennsylvania from the third quarter of 2011 through the end of the third quarter of 2015,” according to the complaint.
“From the third quarter of 2011 through the end of the third quarter of 2015, HRM invoiced American and Frontier for the taxes and wages of the Pennsylvania-based employees they provided to American. From the third quarter of 2011 through the end of the third quarter of 2015, American, on behalf of itself and Frontier, paid the invoices issued by HRM through the TD Bank account.”
HRM was obligated to pay, for the benefit of both plaintiffs, the corresponding taxes, including the employer contributions to the Unemployment Compensation fund and timely file the required reports for both plaintiffs with the defendant, the suit says.
“On Sept. 13, 2016, Kenneth Pinder, a UC tax agent, went to plaintiffs’ office to perform a UC tax audit. Mr. Pinder was unable to complete the audit because American were unable to provide him with information he requested: HRM’s payroll information for 2012, 2013, 2014, and 2015,” according to the lawsuit.
“American investigated HRM’s actions and learned that HRM failed to file, timely or late, any of the required Pennsylvania UC Fund documentation. American also learned that HRM failed to remit to the UC Department any withheld employer UC contributions. Frontier believes that HRM failed to file, timely, or late, any of the required Pennsylvania UC Fund documentation and failed to remit to the UC Department any withheld employer UC Contributions.”
According to them, the plaintiffs’ documentation and audit woes continued.
“On or about Nov. 30, 2016, American provided Mr. Pinder with the requested information. On Dec. 19, 2016, Mr. Pinder was laid off from the UC Department. His successor was George Thomas, and in early January 2017, Mr. Thomas requested additional information from American. It took American approximately one month to gather the additional information and provide it to Mr. Thomas,” the suit states.
“American has not heard from Mr. Thomas since February of 2017. Defendant has not completed the 2016 audit and not issued a notice of assessment or petition for reassessment to either plaintiff. The only action defendant has taken has been to unfairly and unduly penalize both plaintiffs by assessing each with a delinquent UC interest rate. As a result, plaintiffs are forced to pay significantly more interest because of the failures and malfeasance of others, specifically HRM.”
The department filed a response on Aug. 13, claiming the court lacks subject matter jurisdiction over the instant mandamus action and arguing it needs to either be dismissed or transferred to the Commonwealth Court, that the department failed to complete a UC tax audit in violation of their due process rights and the facts involved with the plaintiffs’ complaint were insufficiently-pled.
The plaintiffs are seeking a judgment declaring: The defendant’s failure to comply with its own timelines and the law has financially harmed the plaintiffs; the defendants are required to perform an audit of the plaintiffs within the next 90 days; the defendants are required to credit the plaintiffs with the amount of funds transferred from the plaintiffs to Human Resources Management between the third quarter of 2011 and the third quarter of 2015; and any amount due and owing from the plaintiffs shall be assessed at a compliant interest rate and such further relief as the Court deems appropriate.
The plaintiffs are represented by Michael T. Hollister of Hollister Law, in Philadelphia.
The defendant is represented by Nicholas Marsilio II of the Pennsylvania Department of Labor and Industry, in Harrisburg.
Philadelphia County Court of Common Pleas case 180601067
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com