Since October 1, 2006, employers with 11 or more Massachusetts employees have faced a difficult decision—either provide medical coverage to employees in accordance with the Massachusetts “Fair Share Law,” or pay the Commonwealth $295 per year, per employee.

Over the past year, the Massachusetts Division of Unemployment Assistance (DUA), the state agency that enforces the Fair Share Law, has substantially ramped up its audit activity. Employers of all sizes and industries have been targeted by these audits, and those who have not convinced the DUA of their compliance have faced devastating penalties: back payment of the fair share contribution, plus interest of 12% per annum. These unlucky employers are left with limited recourse—either they must pay the penalty, or appeal the finding to the DUA and then to state court.