Day 1 Focus: Managing Core Risks in a High‑Change Year
PayrollOrg’s 44th Annual Payroll Congress opened Tuesday with a practical examination of how payroll compliance fails—and how those failures compound in a complex regulatory environment. Across three technical workshops and a context‑setting opening general session, speakers framed Day 1 around a central theme: Core Compliance Risks & Error Prevention.
The message was not that payroll faces fewer rules in 2026. On the contrary, presenters repeatedly acknowledged escalating state, local, and federal complexity. Instead, Day 1 focused on where payroll organizations most often lose control while navigating that complexity—tax notice management, payroll tax account maintenance, multistate exposure, and routine errors that trigger penalties and audits.
Rather than treating these issues as isolated problems, presenters emphasized how they interact. A late registration can lead to notices. An unclosed account can generate estimated assessments. A missed state rule can surface months later through enforcement correspondence. By the end of the day, the takeaway was clear: small breakdowns in foundational processes are what turn regulatory change into operational risk.
Tax Notices as Compliance Signals, Not Administrative Burden
Workshop: An Introduction to Tax Notice Compliance
Speaker: Rick Pinkerman, COO & Co‑Founder, Notice Ninja, Inc.
Rick Pinkerman opened the technical agenda with a reframing exercise: stop treating payroll tax notices as paperwork and start treating them as compliance signals.
“Payroll tax notices aren’t just mail—they are compliance risk indicators,” Pinkerman told attendees. Whether issued by federal, state, or local agencies, notices typically point to a breakdown somewhere in payroll’s reporting, payment, authorization, or account setup processes.
Pinkerman outlined a standardized notice lifecycle—receipt, triage, ownership, research, response, resolution, and retention—and emphasized that failures usually occur when responsibility is unclear or documentation is incomplete. In 2026, he warned, those failures carry greater consequences as agencies automate penalties, shorten response windows, and rely more heavily on portal‑based communication.
He noted that notice volumes are rising at the same time explanatory detail is shrinking. As a result, payroll teams must be ready to respond with supporting records rather than relying on agency clarification.
Each unresolved notice, Pinkerman said, creates compounding risk: missed deadlines trigger penalties; incomplete responses prolong agency scrutiny; poor documentation makes issues harder to close even when payroll acted correctly. The solution, he emphasized, is not reacting faster—but reacting systematically.
State and Local Compliance: Where Expansion Can Turn Into Exposure
Session: It’s State and Local Payroll Compliance
Speakers:Lia Coniglio, Esq., Senior Manager, State PR Information Resources, PayrollOrg; Laurel Serra, Director of Education Services, PayrollOrg
The state and local compliance workshop addressed one of the most persistent sources of payroll risk: expanding operational footprints without fully accounting for state‑ and locality‑specific rules.
“It is not just state‑level taxes that employers need to be concerned with,” Laurel Serra told attendees. Wage payment timing, overtime exemptions, minimum salary thresholds, pay methods, deductions, garnishments, paid leave laws, and local payroll taxes all vary widely—often in ways that are more restrictive than federal law.
Lia Coniglio focused on nexus, emphasizing that payroll compliance obligations are increasingly driven by employee location rather than employer intent. Remote work, temporary assignments, and employee mobility routinely create registration, withholding, and reporting requirements even when companies do not perceive themselves as operating in a jurisdiction.
“The mere entry of an employee into a state to perform services can establish nexus,” Coniglio said, noting that the same principle often applies at the local level.
The speakers also warned that courtesy withholding—often implemented to help employees avoid estimated tax payments—can unintentionally expand an employer’s compliance footprint if not coordinated with legal and corporate tax teams. Once established, those obligations rarely scale back cleanly.
Throughout the session, presenters returned to the same guiding principle: when federal, state, and local rules conflict, payroll must apply the standard most favorable to the employee. Failing to do so risks back wages, penalties, and audit exposure, regardless of good‑faith intent.
How Routine Gaps Become Payroll Tax Enforcement Problems
Session: 10 Self‑Inflicted Payroll Tax Wounds to Avoid
Speakers:Michael Orton, Managing Director, Payroll Tax Consulting, Experian Employer Services; Joe Grimes, Director – Payroll Tax Consulting, Experian Employer Services
Michael Orton and Joe Grimes delivered a detailed review of what they described as the most common—and preventable—sources of payroll tax enforcement activity.
“These are the issues that create the majority of problems we see,” Orton said, pointing to late account registrations, delayed closures, outdated account information, inaccessible portals, improper withholding, overlooked state adjustments, and overlapping power‑of‑attorney coverage.
Grimes explained how states often respond when payroll accounts are left inactive but open. Instead of closing the account, agencies issue estimated or “blind” assessments based on prior history. Those assessments continue month after month until the account is formally resolved.
“If you’re dealing with recurring notices,” Orton noted, “there’s a strong chance the root cause is an account issue that was never fully addressed.”
The speakers also cautioned against treating payroll providers as a substitute for internal oversight. While providers execute filings, responsibility remains with the employer to ensure registrations are complete, data is current, and complex situations—such as mergers, reorganizations, or multistate growth—are handled deliberately.
The session reinforced a theme echoed throughout Day 1: most payroll tax problems do not start as technical failures—they start as incomplete follow‑through.
Opening General Session: Change, Resistance, and Why Problems Persist
Session: Opening General Session – Unlocking Possibility With the REINVENT•ABLE Mindset
Speaker: Nataly Kogan, Transformation Expert, REINVENT•ABILITY
The Opening General Session shifted away from technical instruction, but provided important context for the compliance discussions that shaped Day 1. Nataly Kogan, a transformation expert and founder of REINVENT•ABILITY, focused on how individuals and organizations respond to change—particularly when long‑standing systems and habits no longer align with operational reality.
Drawing on neuroscience, workplace research, and personal experience, Kogan examined why resistance often emerges in periods of sustained change. She noted that human decision‑making is strongly wired toward familiarity, even when familiar processes introduce risk.
“Most meaningful growth doesn’t happen when things are finished,” Kogan said. “It happens when something changes.”
While the session was not focused on payroll mechanics, its themes closely echoed the day’s technical programming. Throughout Day 1, speakers described how unresolved tax notices, outdated payroll tax accounts, and legacy workflows often persist—not because payroll teams lack awareness, but because addressing them requires disrupting established routines.
Kogan described adaptability as a skill that must be practiced, particularly in environments where complexity is constant. In that sense, the keynote reinforced a central message from earlier sessions: avoiding change can allow risk to accumulate quietly, while deliberate adjustment—though uncomfortable—creates greater long‑term stability.
Positioned at the end of the first day, the general session framed Day 1’s compliance focus in broader organizational terms, underscoring why foundational payroll issues are often the hardest to resolve—and why leaving them unaddressed carries compounding consequences.
Day 1 Key Takeaways
- Regulatory complexity is increasing in 2026, but enforcement exposure often begins with unresolved fundamentals.
- Tax notices signal upstream process failures and require structured response workflows.
- State and local compliance risk expands quickly through employee mobility and remote work.
- Late registrations and unclosed accounts are major drivers of recurring payroll tax issues.
- Preventing errors requires sustained ownership, not one‑time fixes.
Day 1 Compliance Checklist for Payroll Teams
- Establish a documented workflow for intake, tracking, and resolution of tax notices
- Review active and inactive payroll tax accounts for accuracy and proper closure
- Validate portal access, authorization, and authentication protocols
- Reassess nexus exposure for remote and mobile employees
- Confirm wage, overtime, and pay‑frequency compliance at the state and local level
- Coordinate with legal and tax teams before implementing courtesy withholding
Looking Ahead
Day 1 of Payroll Congress reinforced a central reality for payroll teams in 2026: compliance risk grows when foundational processes lag behind operational change. As the conference moves into automation, AI, and future‑state planning, Tuesday’s sessions grounded the conversation in a reminder payroll professionals know well—systems matter, follow‑through matters, and unresolved issues do not stay contained.
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