Outrageous federal requirement for LLCs

[Sylvia Castellanos]

As a land investor, I recently created an LLC. I wonder of someone can comment about the notice I have just received in the mail from the Pennsylvania Business Posting Department regarding it.

“Your business is required by Federal Law to post a current compliant labor law poster in the workplace. Federal law requires that this poster be placed on the property of the business whether you have one employee or 1,000….The poster must also include information about workers’ compensation benefits. Failure to post required state and federal labor law notices can result in fines of nearly $40,000….To obtain your state and federal employment labor law poster, please detach the bottom portion of this letter and return in the enclosed envelope with your document processing fee of $92.58.”

I am the only person in my LLC and this will not change. I work out of my small home office, where no one has a need to visit. The only thing more absurd than my wanting to hang the poster where no one will see it, is their indicating that I need to pay a $92.58 processing fee. And a close second in the category of absurdity is their threatening me with "fines of nearly $40,000" if I don't post it where no one is going to see it anyway.

I am wondering if other people who are a one-man LLC have experienced this, and what insights they can bring to bear on the subject.

[Savannah Wallace]

Unfortunately, scams like this are quite common. Companies can make very convincing flyers stating that you are required to pay and file something. When my clients send me these, the first thing I look for is a statement, usually towards the bottom, that states "this is not a government entity". If I don't see that, then I look for the address for which to send payments to and the name of who to make the check out to. If it's not the SOS address or the check isn't being made out to a government entity, then I know that this is not a legitimate filing requirement. Unfortunately, scams of this nature are regrettably common. Companies often distribute official-looking flyers that falsely assert you have an obligation to make a payment or file specific documentation. When my clients forward such notices to me, my initial step is to search for a disclaimer, typically located towards the bottom, which explicitly states "this is not a government entity." If this disclaimer is absent, I then examine the provided address for payments and the name of the payee. Should the address differ from the Secretary of State's office or the payee not be a recognized government entity, I can usually conclude that the filing requirement is illegitimate.

Furthermore, these deceptive flyers may employ other tactics to appear credible. They might incorporate official-looking seals or logos, reference legitimate government agencies or regulations, or even include threatening language about potential penalties for non-compliance. Apart from initial filing fees and annual filing, generally, the government is not going to be asking for additional fees for services, and the request can be ignored.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.