Federal agencies are focusing on I-9 audits resulting in civil and criminal prosecutions of employers who hire undocumented workers, rather than immigration raids to round up and deport illegal aliens. I-9 audits are conducted by ICE, the U.S. Immigrations and Customs Enforcement.
Retail giant Abercrombie and Fitch recently paid penalties of $1.04 million after an I-9 audit of stores in Michigan – even though they had not hired a single undocumented worker. The company relied on an internally developed software program to produce and track I-9s. The software omitted an essential question, requiring the employee to attest to citizenship or legal immigration status. Because this feature was omitted, the company did not have a valid, complete I-9 form on even one employee in the state.
In California, a company president faces criminal charges for hiring illegal workers after an I-9 audit. As ICE seeks civil and criminal penalties against executives and managers, an I-9 audit is no longer merely an annoyance.
Even if no criminal prosecution occurs, violators can face fines of $100 to $1,100 per employee for even the simplest of I-9 errors. The majority of I-9 audits occur as a result of tips by disgruntled employees, or violations of other employment regulations.
Employers can use a variety of techniques to avoid penalties and criminal prosecution during an I-9 audit: (more…)
Governor Chaffee, an Independent, said, “This repeal of all parts of the Executive Order on E-Verify will effectively turn the clock back to March 26, 2008, the day before then-Governor Carcieri signed it into law.” Governor Chafee added, “This re-set will allow us to engage in a comprehensive dialogue with our immigrant communities, law enforcement agencies and all interested parties. This is an opportunity to reach a consensus on how best to enforce the law.”
The new executive order means that companies holding contracts with the state of Rhode Island are no longer required to use E-Verify when hiring new employees. It is still lawful for the companies to use E-Verify, but they are not required to do so.
Branches of the state government are not required to use E-Verify for newly hired employees under the new executive order, and there is every indication that they will stop doing so.
In March 2008, Republican Governor Donald Carcieri issued an executive order that required all state agencies in the executive branch, and state contractors, to use E-Verify to ensure that they were not hiring undocumented workers.
This action is in contrast to a trend among states to more strongly enforce employment laws during a recession with high unemployment. In Florida, for example, the newly elected governor (more…)
In late December the Internal Revenue Service or IRS put nondiscrimination compliance under Health Care Reform Act on hold. Unless the Health Care Reform Act is repealed or seriously modified, employers will still have to comply with the nondiscrimination rules at some point before 2014. However, compliance originally scheduled to begin in January 2011 has been delayed.
The IRS has promised to inform employers in advance when compliance with the non-discrimination clause goes into effect. While the IRS has not issued any definite guideline, many expect it to be effective with group health insurance plans beginning in September 2011 or later. Since most group health insurance plans are run on a calendar-year basis, the anti-discrimination clause would actually go into effect for most employers in January 2012. Employers who are self-insured are already covered by the non-discrimination rules.
The nondiscrimination rules require that any new health care plan that is fully funded by the employer cannot discriminate in favor of highly paid employees. This ends the common practice of the CEO and CFO being given health insurance plans where the premiums are 100% paid by the employer, while most employees pay 60% or more of their health insurance premiums.
Under the Health Care Reform nondiscrimination rules, an employee can still be offered a healthcare plan that is completely funded by the employer. However, it must apply equally to employees at all levels.
The second provision of the nondiscrimination rules requires that benefits of healthcare plans offered to highly compensated executives cannot be better than benefits offered to other employees. For example, an employer cannot cap healthcare benefits for hourly workers at $20,000 per year but provide up to $1 million in benefits per year for executives.
In a highly publicized move, McDonald’s and several other major corporations petitioned the federal government to delay implementation because the healthcare plans they offer most employees do not meet the nondiscrimination guidelines.
The IRS is developing numerical tests that an employer will have to meet, to demonstrate that plans offered are not discriminatory. In cases where an employer has a contract specifying that free healthcare will be provided to a highly compensated executive, the IRS suggests that employers (more…)
California employers must provide a minimum two-hour training session on preventing sexual harassment in 2011. Under AB 1825, each employer is required to train supervisors to avoid sexual harassment in the workplace at least every two years. Employers with 50 or more employees can avoid tracking training of individual employees if they conduct company-wide training for supervisors during one calendar year. Because AB 1825 went into effect in 2005, the training takes place in odd-numbered years for most employers.
According to attorney David Goldman, employers should focus particularly on retaliation in the AB 1825 training. That is because complaints of retaliation increased 49% between 2006 and 2009. By comparison, charges of sexual harassment increased only 5% during the same period.
In particular, employers need to make supervisors aware that taking any negative action against an employee who files a discrimination or sexual harassment complaint in good faith is illegal retaliation. Common forms of retaliation can range from ostracizing the employee, to demoting or terminating the employee on trumped-up grounds. Even when a discrimination complaint is determined to be unfounded, retaliation against the employee is illegal. An employer can legally take negative action only against an employee who is found to have committed fraud when making the complaint of discrimination.
New legislation and regulations following the gains by Republicans in mid-term elections will impact many employers. These include developing news on Health Care Reform and extensions of many tax credits.
The last-second tax cut extension passed by Congress is formally titled the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. That law implemented a number of extensions to tax credits and benefits to employers, as revealed in this IRS guide for employers.
The biggest news is a 2% reduction in FICA withholding by employers, from 6.2% to 4.2%. Employers must implement this cut by January 31, 2011. It affects employees earning up to $106,800 per year. This will result in an increase in take-home pay for workers, which replaces the “Make Work Pay” tax credit of up to $800 under the ARRA, the American Recovery and Reinvestment Act. New 2011 IRS withholding tables are here.
Employers will receive tax credits for hiring workers: (more…)