An EDD audit, is a review conducted by the California EDD to determine whether a business is correctly classifying workers, reporting employee wages, and paying the required payroll taxes. These audits are often triggered when the state suspects worker misclassification, such as treating employees as independent contractors, or when there are discrepancies in payroll records, unreported wages, unemployment claims, or even through routine EDD compliance checks.
During an EDD payroll tax audit, the state carefully reviews business records including payroll, tax filings, W-2s, and 1099s to confirm that all employment taxes have been properly withheld and reported. Unfortunately, even small mistakes can lead to serious financial consequences. Businesses that fail an audit may face significant tax assessments, interest, and penalties. Because of these risks, having professional EDD audit representation is essential.
We provide comprehensive support for businesses facing an audit. Our team reviews payroll and HR records in advance, corrects worker classification issues, and handles communication directly with EDD auditors. With years of experience in EDD audit defense, we work to protect your business, reduce liability, and minimize penalties while ensuring compliance with California payroll tax laws.
The EDD conducts audits to ensure businesses are complying with California payroll tax laws. These audits often focus on:
If you’ve received a letter from the California Employment Development Department (EDD), don’t panic — but don’t ignore it either. EDD audits can be complex, time-consuming, and financially disruptive if not handled correctly. At S&J Financial Services, we provide start-to-finish audit support designed to protect your business and resolve EDD matters as efficiently as possible.
We manage the entire process and act as your direct point of contact, reducing the stress and minimizing your risk.
