[codegeek]

"Does a company have any responsibility if the employee lies "

May be, may be not but in practice, you are not going to be able to tell IRS or another compliance org. that sorry, my employee lied so it's not my problem. As the employer, you are still on the hook for any taxes and other compliance related issues regardless. You can sue your employee may be later but that is not going to save you from the wrath of Uncle Sam and others.

[ttymck]

Why would an employer be unable to claim indemnity if their employee committed fraud? I agree that your position is the safe, conservative perspective, but I don't think it's quite so absolute.