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

UPDATED: Jul 27, 2011

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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