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Record keeping and audits

Reference: Minnesota Law, §268.186

The Minnesota Unemployment Insurance (UI) Program performs regular examinations of employer records. All employer records must be open to inspection, audit, and verification at any reasonable time and as often as deemed necessary. Records must be kept for a minimum of four years. Any employer that refuses to allow an audit of their records by the UI Program may be assessed an administrative penalty of $500.

When the UI Program performs an audit, the following records are generally reviewed:

Information for each worker:

  • First and last name
  • Social Security number
  • Location where services were performed
  • Rate of pay
  • Actual days and number of hours worked
  • Gross earnings and the amount paid

Payroll Records:

  • Payroll register
  • Individual earnings records
  • Time cards (selective review)

Federal Records:

  • Forms W-2 and W-3
  • Forms 940 and 941
  • Forms 1096 and 1099
  • Federal income tax returns

General Accounting:

  • Chart of accounts
  • Detailed general ledger

Relationship between Agents and Employers - Audits

An "agent" is an entity that acts on behalf of an employer (the agent's client) to handle the employer's Unemployment Insurance (UI) obligations. If you assign roles to an agent we may contact them for audit information - this will be the equivalent to contacting you directly.

This handbook is based on current UI legislation; statements are intended for general information and do not have the effect of law. The Minnesota Unemployment Insurance Law - MN Statutes 268.001 to 268.23 and Administrative Rules 3310 and 3315 - can be accessed through our website at www.uimn.org by clicking Employers & Agents, Help and Support, then the UI Law link.

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