For Immediate Release - May 23, 2012

Verizon Subsidiaries Agree to Pay More Than $317,000 to Resolve Allegations They Failed to Fully Contribute to Unemployment Trust Fund

Settlement Part of Ongoing Effort to Target Employers That Fail to Pay Their Quarterly Unemployment Contributions

BOSTON – Two Verizon subsidiaries have agreed to pay the Commonwealth more than $317,000 to resolve allegations they failed to pay their full unemployment contributions into the Commonwealth’s unemployment trust fund, Attorney General Martha Coakley announced today. 

The case is the result of an investigation referred to the Attorney General’s Office by the Executive Office of Labor and Workforce Development’s Department of Unemployment Assistance (EOLWD\DUA) in a collaborative effort to target employers that fail to pay their quarterly unemployment contributions. 

“Qualifying employers are required to pay contributions to the unemployment compensation fund in Massachusetts to ensure that benefits are available for eligible workers,” AG Coakley said.  “Through enforcement, we aim to level the playing field for those businesses that already follow the law and to ensure future compliance.” 

“We are pleased that our joint enforcement efforts are recouping payments to the Commonwealth’s Unemployment Insurance Trust Fund,” said Joanne F. Goldstein, Secretary of Labor and Workforce Development. “All employers are obligated to maintain this safety net for people out of work through no fault of their own. Failure to contribute unfairly burdens businesses that do.”

Under the terms of the settlement agreement, telecommunication service providers Verizon Service Corporation (VSC) and Verizon New England (VNE) agreed to pay the Commonwealth a total of $317,909.45 for failing to pay their full unemployment contributions from January 2010 through December 2011.   

The Department of Unemployment Assistance (DUA) administers the Unemployment Insurance program, providing temporary assistance to unemployed workers.  Funding for these benefits comes from Massachusetts employers.  Employers either pay quarterly contributions into the trust fund or non-profit or governmental employers have the option to self-insure, reimbursing the state dollar-for-dollar for benefits paid.

According to the DUA, from January 2010 through December 2011, VSC and VNE failed to pay their full employer tax contributions.  As a result of the failure to pay their full tax liability, the defendants owed more than $317,000 in employer contributions.  Under the settlement, the defendants have made a lump sum payment of $317,909.45 to the Commonwealth.

AG Coakley’s Insurance and Unemployment Fraud Division works to protect consumers and the integrity of the insurance system by investigating and prosecuting those who commit fraud against all types of insurers, including the Commonwealth’s unemployment insurance and workers’ compensation system.  The prosecution of insurance fraud helps prevent the increase in premiums and taxes that are the result of fraudulent insurance claims.  In 2011, the Insurance and Unemployment Fraud Division obtained $5,578,934 in restitution orders in 33 matters.

To report unemployment fraud to the EOLWD\DUA, call the agency’s toll free fraud hotline at 1-800-354-9927 anytime, 24 hours a day.  Callers may remain anonymous.

The case was handled by Assistant Attorneys General Jennifer Cotter and David Andrews of AG Coakley’s Insurance and Unemployment Fraud Division with assistance from investigator Rose Bagalawis of the Attorney General’s Office and Richard Carney, Director of Revenue Enforcement and Audit, from EOLWD\DUA.

#########

Follow us on Twitter – View our Photos – Visit our Website