Be Prepared: Mergers And Acquisitions Do Not Absolve I-9 Compliance Issues

Mergers and acquisitions create chaotic periods for affected businesses, but they do not absolve those businesses of their obligation to ensure compliance with immigration and employment laws. In fact, the new entity becomes liable for the sins of the old. It must, therefore, perform its due diligence on Employment Eligibility Verification Form I-9 maintenance for all employees or risk civil and criminal penalties.

The current administration has cracked down on I-9 violations, costing businesses millions of dollars and resulting in thousands of arrests of both employers and employees. With the added scrutiny, it is more important than ever to have one’s I-9 ducks in a row. US Immigration and Customs Enforcement (ICE) recommends that businesses conduct self-audits (https://www.justice.gov/crt/file/798276/download) of their I-9 procedures, as long as they cannot be considered discriminatory or retaliatory. An ICE audit may be initiated for any reason—even an anonymous tip—so every business in the country is susceptible at any time.

The Issue

Be prepared for paperwork. The newly acquired or reorganized business entity may take one of two routes in its approach to the old entity’s I-9s. Whichever I-9 strategy it chooses, a representative will need to sit down with each employee.

  1. The new entity may maintain the old ones previously completed I-9s, thereby accepting liability for any omissions or errors on the forms. If this road is taken, the business should make the time to review each form with each employee to update and re-verify the information to protect itself from possible mistakes created by the previous regime’s I-9 procedures. If this process is not completed by the date of the merger or acquisition, the new entity is legally responsible for any errors in the existing paperwork.
  2. The safer route is to complete a new I-9 for each employee before the date of the merger or acquisition. This requires an offer of employment to and acceptance by each employee who will remain on the payroll after the turnover date. The employee must complete Section 1 of the form by that date, and the employer must complete Section 2 within three business days.

The only exception is an employee hired before November 7, 1986, who has “a reasonable expectation of employment at all times.” These employees are exempt from completing I-9s.

If the paperwork must be done—and it must—it may be a good time to sign on to the federal government’s E-Verify program to make I-9 procedures airtight. Businesses such as federal contractors are required to enroll in E-Verify (https://www.e-verify.gov), and some states mandate participation under certain conditions such as business licensing. For most employers, however, the program is voluntary. E-Verify electronically matches employee documentation presented to attest to identity and work status against data maintained by the Department of Homeland Security and the Social Security Administration. The employer instantaneously receives either confirmation of the documents’ authenticity or notice that a problem may exist. E-Verify’s standards on documentation are higher, requiring a Social Security number and photo identification, but that serves only to further safeguard the business from I-9 problems.

So, we have a newly acquired or reorganized business which may or may not elect to shore up its I-9 situation through E-Verify, and we know that a ton of I-9 paperwork lies on the horizon whichever route we take. We can trod through the paperwork and file it away today, but of course, the job is just beginning. In fact, that was the easy part—compiling shiny new or freshly verified I-9s that, today, are in pristine shape. But tomorrow, employee verification documentation will expire on different days of different years, and state and federal laws and regulations will change when least expected. Wouldn’t it be nice if there were a tool that could take the worry and uncertainty out of all this?

The Solution

In 1998, a group of immigration and employment attorneys recognized the complexity of I-9 maintenance and its ever-evolving landscape and designed software to streamline the process and protect businesses. Lookout Services developed I-9 Intelligence, the first software aimed at simplifying I-9 form completion, the employment verification process and the secure, ongoing management of I-9s and supporting documents.

With an impending merger or acquisition, I-9 Intelligence will protect the new entity from old and future mistakes made by careless people administering the forms and from sloppy procedures. Poorly trained or willfully deceptive people acting in the field without oversight can cost a business. Even the most conscientious employer can make mistakes or simply fail to implement an important legal change. This I-9 software negates all of these frightening and all-too-real scenarios, converting a paperwork nightmare into a Human Resources dream by:

  • Guiding the administering professional through completion;
  • Immediately flagging mistakes or missing data;
  • Providing dashboard alerts when forms are late, missing or in need of updating;
  • Reporting on expiring documents, due dates and form retention timelines;
  • Uploading old I-9 forms and checking them for errors and timeliness;
  • Automatically altering forms to comply with new laws and regulations to ensure seamless compliance and
  • Expanding options for complying with E-Verify by permitting even low-level HR employees to enter and receive data.

Take the guesswork out of I-9 compliance and ensure that your newly merged or acquired business is audit-ready from Day 1.

ICE Investigations Surge 400% in 2018

US Immigration and Customs Enforcement (ICE) investigations in 2018 surged by 405% over 2017 to ensure a “culture of  I9 compliance.” The agency’s stated goals are to:

  • Prevent the abuse of workers;
  • Deter further illegal immigration;
  • Stop criminal activity, thereby enhancing public safety;
  • Eliminate threats to national security and
  • Protect lawful workers and companies from an unfair competitive advantage.

To these ends, ICE and Homeland Security Investigations (HSI) joined forces to produce stunning results from investigations to arrests over the previous year.

FY2017FY2018Increase
Worksite investigations1,6916,848405%
I-9 audits initiated1,3605,981440%
Criminal arrests139779560%
Administrative arrests1721,525887%

As an investigative arm of the Department of Homeland Security (DHS), ICE is specifically targeting two types of industries: (1) those that relate to the nation’s critical infrastructure and (2) those that have traditionally employed and have been known to exploit unauthorized workers. The agency may trigger an Employment Eligibility Verification Form (I-9) audit of any business for any reason, but some of its most visible cases of late started with tips from other DHS agencies through their unrelated investigations and from the tip form on ICE’s website. Tipsters are not required to provide their names or other identifying information so that they may choose to remain anonymous.

With the rising number of audits comes a slowdown in the process, sometimes taking a year to complete and further complicating a difficult and costly headache for HR professionals. Businesses must be aware of the current climate and take every possible step to avoid triggering an I-9 audit and the expensive sanctions that can follow.

Violations

While it can take years for the federal government to turn an audit into a conviction, several high-profile cases and trends have emerged in the last two years that should make business owners reevaluate their I-9 procedures for weaknesses. The consequences of others’ misdeeds are sobering.

  • The owner of a slaughterhouse in Tennessee pleaded guilty to tax and wire fraud and employing illegal aliens. He will pay $1.4 million in restitution before his sentencing which may include prison time and fines. 104 alien employees were arrested on immigration violations.
  • HSI arrested 17 people for a criminal conspiracy to exploit illegal laborers, fraud and money laundering and is investigating violations at agricultural businesses in Nebraska, Minnesota and Nevada.
  • A Texas trailer manufacturer is under criminal investigation for hiring 160 people using identities stolen from US citizens.
  • In FY2018, businesses were ordered to pay over $20.4 million in civil and criminal penalties. One Texas business forfeited over $5.5 million, and an Oklahoma business paid more than $1 million.
  • FY2017 saw the largest financial penalty ever issued in an immigration case. Asplundh Tree Experts of Pennsylvania was ordered to forfeit $80 million and to pay an additional $15 million to settle civil claims for willful blindness to lower level practices of hiring and rehiring illegal aliens.

While the numbers of indictments and convictions remained relatively steady over the last year due to the time it takes to complete the process, the message is clear to HR professionals—make sure I-9 procedures are rock solid. ICE recommends that companies conduct self-audits to identify and correct issues before they become problems.

How Border Wall Shutdown has Shutdown One “Electronic Border Wall”

On December 22, 2018,  the federal government officially shut down following contention over the proposed border wall. However, while the shutdown may be rooted in immigration concerns, the shutdown’s impact on immigration services will be relatively limited. This is because most of the organizations involved in U.S. immigration are deemed “essential agencies,” so they will continue operating as normally as they can. Further, funding has already been appropriated for many other agencies relevant to immigration, so as long as the money is there, these organizations will also remain open.

Still, when the government shuts down, confusion ensues. For employers and their workers, here is what you need to know:

Are E-verify and the I-9 Form affected by the shutdown? 

Almost all federal agencies responsible for immigration will remain fully operational during the shutdown. So, how is immigration being impacted by the government shutdown?

The brunt of the impact will fall on E-Verify, which is an essential tool for employers that need to verify work authorization. The I-9 Form process, though, is still required for authorizing new hires.  Here is what the government shutdown means for the process:

  1. Form I-9 – Form I-9 remains mandatory under federal law, and new hires should still be required to fill out the form with their employer. It is important to note that even while the government shutdown is in effect, employers are still required to verify their employees.During a government shutdown, the I-9 Form process remains unchanged. That includes deadlines, so employers must still fill out the form within three days of hiring a new employee. New hires must also provide the proper identifying and work authorizing documents, adhering to the same timeline. Should the company’s I-9 Forms be audited at a later date, the auditing agency will expect any I-9 Forms filled out during a shutdown to be compliant in every way. That includes how the form is retained, so companies should not alter their I-9 Form processes, assuming they are already in compliance.
  2. E-Verify – The Department of Homeland Security’s E-Verify website will be unavailable during the government shutdown. This means that nearly all of the shutdown’s impact on immigration will be centered on the program.Because it will be taken offline until the shutdown is resolved, E-Verify cannot be used to verify an employee’s work authorization, even in states where it is a required step. Further, it is currently impossible to enroll in E-Verify or terminate an account, to create a case in E-Verify, to take any action on an ongoing case, to add or manage any user credentials, to run any reports or to resolve Tentative Non-confirmations, or TNCs. In other words, employers won’t be able to access any part of the website.As long as the government remains in shutdown mode, employers will be given leniency regarding E-Verify use. Specifically, the three-day deadline has been suspended, so employers are not required to begin an E-Verify case within three days of hiring an employee. Also, if there are any ongoing TNCs, they do not have to be resolved until the government is no longer shutdown. Employers have been cautioned not to take any action against an employee who has received a TNC, or an employee whose case has been stalled as a result of the shutdown. These cases should be addressed further once the shutdown has ended.

What is not affected by the government shutdown?

Multiple federal agencies are involved with immigration, and most of them will continue functioning as normal. Those agencies include:

  • Customs and Border Protection (CBP) – As CBP is one of the aforementioned essential agencies, it will continue operating through the government shutdown. That means CBP will still provide inspections at the Mexican and Canadian borders and will also enforce U.S. laws at the borders.
  • Immigration and Customs Enforcement (ICE) –ICE is another essential agency and will also remain open during the shutdown. As such, employers should not expect ICE-run audits and inspections to cease or slow down during this time.
  • Student and Exchange Visitor Information System (SEVIS) – Another essential agency, SEVIS will also operate during the shutdown. It is essential that universities remain compliant with any regulations related to SEVIS, as it is considered important for national security.
  • United States Citizenship and Immigration Services (USCIS) –USCIS is a critical organization for ensuring the smooth flow of people in and out of the country. Fortunately, USCIS is funded by application and petition fees, so it will remain funded through the shutdown.
  • Department of State (DOS) –DOS is not an essential agency and funding has not been set aside for the organization. However, DOS expects U.S. embassies and consulates to process visa applications as normal, as long as visa filing fee reserves remain. DOS has also confirmed that passport services will still function normally, unless those services are provided in a federal building that has been shut down.
  • Passport Offices – The Department of State says that the only passport offices affected by the government shutdown are those located within a federal building that has been closed due to the shutdown.

 

  • Department of Labor (DOL) –Funding has already been appropriated for the DOL through the 2019 fiscal year. As such, it is unaffected by the shutdown, which means current wage determinations, PERM processing and labor certifications will not be halted.

Government shutdowns bring a lot of uncertainty to the private sector, but employers and their employees won’t have to change much as a result. While E-Verify is down, the I-9 Form process remains unaffected, and the agencies responsible for immigration law enforcement are still up and running. Employers, then, should consider it business as usual when it comes to authorizing workers.

 

Purging Your Records

Electronic Form I-9 systems have brought efficiency and ease of oversight to the processing, storing, and purging of Forms I-9 like no paper system could ever hope to do. With paper Form I-9 records they were typically just stored away, rarely revisited, and likely never purged. Electronic I-9’s have made it incredibly simple to maintain proper long term storage of these files.

The reports available to the Program Administrator, when used effectively can help your organization stay ahead of any compliance issues, including retention and purging.

Did you know each time you terminate an I-9, Lookout automatically calculates a retention date for that I-9. You don’t have to determine if you need to keep it for 1 year or 3 years. That is all done for you. But why bother? You might be thinking “better to have it and not need it, than need it and not have it.”

Well, that old adage doesn’t always hold true. If those records are lost or stolen, your organization could potentially be liable for any resulting identity theft. And in an I-9 audit you can be fined for mistakes and errors even on forms that you should have purged.

It is very important that your Program Administrator understand and be trained on all areas of Form I-9 management, including retention and purging.

If you require instruction or assistance on how to perform these tasks in the Lookout system, please contact Customer Support at 713-668-6200 x2. We look forward to the opportunity to assist you in your I-9 processing.

Planning for Revised Form I-9

As many of you know, U.S. Citizenship and Immigration Services (USCIS) announced the newly revised Form I-9 on March 8, 2013. The announcement requires implementation of the new Form I-9 by May 7, 2013.

During this past week, many of you have asked questions related to the future release and use of Form I-9. The following information is provided in an effort to keep you informed of the progress made thus far.

 

Q: When will the revised Form be released?

Lookout’s development efforts began in November based upon the Proposed Version of the Revised Form. However, the Final Version approved by the government included significant changes in Section 2 List A. Designs and plans to accommodate the changes announced on March 8th are still progressing. Currently Lookout anticipates release in early April.

Q: Will Lookout customers receive advance notice of the release date?

Yes.

Q: How much advance notice will customers receive before the release to the Lookout system?

Our goal is to provide at least a one week notice before the release of the new form.

Q: When should the employer begin training related to the new Form I-9?

Employers may choose to provide Revised Form I-9 training at any time.

Q: Will Lookout provide training related to use of the Lookout application as it relates to the new Form I-9?

Yes, a training date will be announced next week. This training will highlight the added fields and the rules associated with them.

Q: What changes should users expect to see when completing the new form I-9 via the Lookout system?

The Lookout system Form I-9 will look like the paper version of the revised form. Logic will be added to our “run checks” feature to account for the new business rules associated with the changes.

 

We hope that this information assists you in your planning. We appreciate your patience as we work to complete the task at hand. Please contact customer support, help@lookoutservices.net, if you have any questions or concerns related to this notification.

Revised Form I-9 Released

Lookout’s Development Efforts Already Underway

U.S. Citizenship and Immigration Services (USCIS) announced the newly revised Form I-9 is now approved for use. The announcement includes an implementation grace period through May 7, 2013 to allow employers to revise their internal processes to incorporate the use of the new form. The new Form I-9 has extended Section 1 to request additional information from the new hire. The additional information requested includes, telephone, email, and foreign passport information, where applicable. In addition, the Form I-9 itself now consists of 2 pages. The Federal Register Notice (78 FR 15030) indicates that the new Form I-9 may be obtained by visiting the I-9 Central website, www.uscis.gov/I-9Central. USCIS has also released a new corresponding Handbook for Employers (Form M-274) as of March 8, 2013.

Lookout’s development efforts are well underway. Lookout Services’ development team began programming these changes late last year with the expectation that the revised Form I-9 would eventually receive approval. However, initial review indicates that USCIS has made additional changes to the revised Form I-9 since the draft Form I-9 was issued in October of 2012. Our business and development team will be reviewing these changes and planning for their inclusion in our development efforts. However, Lookout is committed to publishing the new Form I-9 before the grace period ends. Lookout will continue to provide updates as the final development effort progresses.

The Human Element

As I-9 Program Administrators, you know the challenges presented by the human element. Electronic Form I-9 systems with real-time error-checking go a long way toward eliminating the issues created by the human element. But, even with error-checking software in place, there are still certain pitfalls that can occur.

  • Your I-9 Processor ignores the system alerts and prompts resulting in an erroneously completed Form I-9.
  • Your I-9 Processor does not know what to do when the new hire fails to present documents within 3 days of hire.
  • Your I-9 Processor does not know what to do with an incomplete Form I-9 if the new hire quits before the I-9 is completed.
  • Your I-9 Processor does not know what to do with an incomplete Form I-9 if the new hire never begins work.

Due to unique factors in your organization, many of these pitfalls require management and legal input to determine the best action to take. These determinations should be described in an I-9 policy manual and taught to I-9 processors during training sessions. In addition, a Program Administrator should be responsible for oversight and management of the organizations I-9 processing and policy enforcement.

Once again, electronic Form I-9 systems add efficiency to the oversight of Form I-9 processing. The ability to pull reports and search for specific events saves significant time. However, if your Program Administrator is not utilizing the reports regularly and effectively, your organization may find compliance issues continue to be overlooked.

Administrators should perform the following functions on a systematic basis to insure I-9 Policy and Program effectiveness.

  • Review all Form I-9s containing errors
  • Delete I-9s for new hires who never began work
  • Terminate I-9s for new hires who failed to provide documents to complete I-9
  • Resolve any curable errors, i.e., typos, conflicts of status, etc, for active employees
  • Compare Payroll records to Form I-9 records
  • Update Termination dates
  • Purge Retention Expired Form I-9s

If you require instruction or assistance on how to perform these tasks in the Lookout system, please contact Customer Support at 713-668-6200 x2. We look forward to the opportunity to assist you in managing the human element in your I-9 processing.

Details Behind the TNC

The “Tentative Non-Confirmation” or TNC is the 2nd most common response users see from the E-Verify system following the “Authorized to Work” response. The reason this is a “tentative” non-confirmation is that the system sees some commonality between the employee’s information and a record in the system. However, there is not enough coinciding information to allow for a match and a definitive system response. It is extremely likely in these cases that a typo exists somewhere in the employee’s data.

A TNC is typically the result of a clerical error in Section 1 of Form I-9. It is important that you double or even triple check the employee’s personal information in these cases before you continue processing the E-Verify case. Often, a typo in the entered information will halt the confirmation. Here are a few common mistakes to look for:

  • Last name/first name backwards
  • Social Security number typed wrong
  • Incorrect date of birth

These seem like very simple errors not to make, but that is exactly why they are made. Whether caused by rushing, complacency, or unfamiliarity with the computer system these mistakes are common; so look for them.

After making corrections, return to E-Verify and continue processing the case. This will update E-Verify with the corrected information and hopefully change the case status to authorized. But remember, typos and human error can occur on both sides of the system. If you’ve checked and rechecked the employee’s information and can’t find a mistake, it is possible that the error exists on the government’s side. If you determine that the information in Section 1 is accurate and that the government’s data was entered wrong the employee will need to “Contest” their case status.

The final case result would determine the procedure to follow to “contest” the findings. Simply follow the on-screen instructions and print the necessary documents.

We will cover some of these case results in more detail a future issues.

Year-End Compliance Check

Here are 5 things that you can do as the year comes to a close to evaluate compliance with E-Verify and Form I-9. See how your end users are doing and how your Compliance Program performed in 2012. We invite you to contact us for assistance with these or any other matters you discover during your review.

  • Review all Open E-verify cases: Identify any cases which have been open for more than 10 days, discover the reasons for untimely completion, resolve issues, and complete cases.
  • Update Termination Dates: Request termination dates from payroll, and batch process termination dates to I-9 records.
  • Match I-9s and Payroll: Request employee list from payroll, batch process Matching I-9 records against employee list.
  • Review Three Days Section 2 Unsigned Report: Identify unsigned I-9 Records, discover the reasons for untimely completion, resolve issues, and complete signatures.
  • Review Retention Expired Records: Identify retention expired records using the Retention Report, then notify Lookout for assistance with record removal.

Proposed Changes to the E-Verify MOU

On September 11, 2012, DHS announced proposed changes to the E-Verify MOU in the Federal Register (77 FR 55858). The Federal Register notice provides a 60-day comment period ending November 13, 2012. There are 6 versions of the new proposed MOU depending upon how access to E-Verify is gained. Each of the proposed MOUs may be viewed via the eRulemaking Portal, simply scroll to the bottom of the docket screen.

The proposed MOU includes several changes. The most significant of these changes are outlined below.

Article V. Section F. PENALTIES

  • The [Web Services Agent, Web Services Employer, etc.] agrees that any failure on its part to comply with the terms of the MOU may result in account suspension, termination, or other adverse action.
  • DHS is not liable for any financial losses to [Agent/Employer] or any other party as a result of account suspension or termination.

Article VI. Section B. TERMINATION

2. …DHS may terminate this MOU…, with or without notice at any time if deemed necessary because of requirements of law or policy, or ….breach of system integrity…, or a failure on the party of either party to comply with established E-verify procedures and/or legal requirements…the employer understands that if it is in a state where E-Verify is mandatory, termination of this MOU by any party may negatively affect the Employer’s business.

For employers using E-Verify in an E-Verify required state, these changes may have business ending consequences. The MOU does not outline the level or frequency of non-compliance issues which would result in suspension or termination. Furthermore, the MOU does not outline any means by which an employer can redress the non-compliance issues in order to maintain the employer’s E-Verify participation. Likewise, the MOU does not provide any process by which an employer can appeal the decision of DHS with respect to suspension or termination of the employer’s E-Verify account.

Lookout Services encourages employers to consider the proposed changes and to submit comments on the proposed MOU. Comments may be submitted via email (uscisfrcomment@dhs.gov ), as well as, the eRulemaking Portal. The comment period ends November 13, 2012.