Administrative Agencies are government bodies that are empowered to direct and supervise the implementation of particular laws. These agencies are often appointed by governmental authority such as the President of the United States, Congress, or a state constitution or legislature; but an agency does not necessarily report to the government. Certain agencies, such as the CIA or SEC, operate independently of the government. Government may have influence over independent agencies, though, when it has the power to appoint or change the leader of the agency.
An agency is limited in its activities by the law governing its existence; yet many agencies have been granted very broad powers to enable them to perform their duties fully and independently. Individuals and businesses have the right to challenge the actions of agencies through an agency’s administrative procedure or through the court system.
In Washington, we have three primary agencies that businesses work with regularly: Department of Revenue, Employment Security Department, and Department of Labor and Industries. Below is a brief synopsis of each and its role in your business.
Department of Revenue (DoR). We all are aware that DoR’s primary role is the collection of taxes. For businesses, the key taxes are sales and use tax, business and occupation tax and personal property tax. As businesses constitute the largest tax base in the state, DoR spends significant time and money working with and policing business activities. Activities include providing taxpayer assistance, information and education; accounting for and processing tax revenues and information; distributing money to local governments; developing tax legislation; auditing and collecting delinquent taxes; and enforcing compliance.
Employment Security Department (ESD). ESD is the state agency responsible for collecting, analyzing and distributing employment information pertaining to Washington State including monthly unemployment and job-growth/loss announcements, twice-a-year job-vacancy surveys, average-wage information, and job-benefits reports. ESD is more readily known in the business community for its role in administering unemployment insurance in the state. Finally, ESD participates in the WorkSource system, a collaboration among governmental, nonprofit, and and for-profit organizations, to assist with hiring and training needs.
Department of Labor and Industries (LNI). LNI’s primary purpose is to “Keep Washington Safe and Working.” They accomplish this by helping employers meet safety and health standards; inspecting workplaces for health, safety, and wage and hour compliance; and administering the state’s workers’ compensation system. There has been much discussion over the role of a government agency administering the workers’ compensation program and consideration over whether the function should be privatized.
Each of these agencies serves a primary role of ensuring compliance with laws. As we know, failure to comply brings with it penalties. The state’s budget crisis has pushed enforcement to the forefront. Just as we see with traffic and parking enforcement, these agencies may be acting more aggressively to not only fulfill their missions but to also assist with revenue generation. The result is more audits and deeper dives by the agencies into key areas of non-compliance. Our upcoming blog posts will look into what areas are being investigated and what to expect in an audit.