What to do about afamily-owned LLC company and possible illegal operations?

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What to do about afamily-owned LLC company and possible illegal operations?

Is it illegal for my boss to pay 60 hour of wages semi-monthly to a daughter who does not work any hours, and to use that salary to pay for medical insurance through the company? Is it illegal for my boss to permanently lay off his co-administrator wife, and for her to then collect unemployment and still be covered by medical insurance by the company?

Asked on July 27, 2011 Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) Unemployment fraud--so if someone collects unemployment when they are not entitled to--is not something you could sue for, but you could report it to the unemployment office and see if they investigate.

2) Similarly, while you can't take any action directly for what you believe to be insurance fraud--providing health insurance to "employees" who do not work--you could report your suspicions to the insurer, who may choose to investigate or take action.

3) If boss wants to pay his daughter for not working, he's allowed to--an owner of a company may choose who to pay, how much, for doing what. If proper taxes are not taken out or reported, that might be tax fraud.


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