Breaking Federal Developments in Labor and Employment September 2017

Salary Test for Exempt Status Invalidated

Under the prior administration the DOL had issued amendments to certain exemptions from the overtime requirements of the Fair Labor Standards Act (“FLSA”), which would have dramatically increased the number of employees eligible for overtime pay to over 4 million workers within the first year of implementation. The amendments were to be effective on December 1, 2016, however their implementation was stayed by a federal judge last November, as reported in our November 2016 Client Alert.

The new regulations were to essentially double the salary threshold for employees who would be exempt from overtime payments, assuming they met one of the three exemptions, from $455 per week or $23,660 per year, to $913 per week or $47,476 per year. Under these regulations, even if employees performed duties that would otherwise indicate they were exempt from overtime, if they made less than $47,476 per year, their employers would have to pay them overtime regardless of their duties. Just last week, a federal judge in Texas invalidated the new regulations, and specifically found that, while a salary test was permissible, the minimum threshold of over 47K per year was too high, and in fact obviated the need for any other duties based analysis, which has always been at the heart of the executive, administrative, or professional exemptions.

Employer Tip

For the time being, employers can feel comfortable relying on the duties test to determine eligibility for overtime, however, the DOL has indicated that it is still looking at the minimum salary threshold, and employers should expect that threshold to increase from the current number of $23,660. Employers would be well advised to take a look at their currently classified exempt employees making between 24-35K per year to determine whether such employees truly meet the duties test, and whether such employees are being paid at appropriate levels.

EEO-1 Salary Reporting Requirements Blocked

The new EEO-1 forms with reporting information for 2017 were to have included salary information in addition to the usual reporting requirements. The EEOC was presumably intending to use such information to target companies for Equal Pay investigations and complaints. Reporting is still due using the EEO-1 forms in March 2018, but the OMB has just announced that the forms are not going to require the reporting of salary information by gender and other protected characteristics, so employers have a reprieve with respect to federal reporting requirements.

Employer Tip

Employers should be mindful that the state and federal equal pay laws are still applicable, and it is always a good idea to do a self-audit of comparative pay data based on gender, race, and other protected characteristics in order to ensure compliance with such laws. Please also refer back to our April 2017 Client Alert with respect to NY pay equity laws and the salary history ban that goes into effect next month for NY employers.

New I-9 Form in Effect September 18, 2017

Employers should be aware that a new I-9 form is going into effect on September 18th. The link to the new form can be found here.

This post was written by David I. Rosen of Sills Cummis & Gross P.C. © Copyright 2017

Employment Based Immigration: New Form I-9, Employment Eligibility Verification

Employment Eligibility VerificationOn November 14, 2016, U.S. Citizenship and Immigration Services (USCIS) published a revised version of Form I-9, Employment Eligibility Verification (“Form I-9”). Employers can continue to use the most recent version dated March 8, 2013 until January 22, 2017. By January 22, 2017, employers must use only the new version or face serious fines.

Form I-9 requirements were established in November 1986 when Congress passed the Immigration Reform and Control Act (IRCA). IRCA prohibits employers from hiring people, including U.S. citizens, for employment in the United States without verifying their identity and employment authorization using Form I-9.

Among the changes in the new version, Section 1 asks for “other last names used” rather than “other names used,” and streamlines certification for certain foreign nationals. The revised Form I-9 is easier to complete using a computer. Enhancements include drop-down lists and calendars for filling in dates, on-screen instructions for each blank item, easy access to the full instructions, and an option to clear the form and start over.

Additionally, prompts have been added to ensure the information is entered correctly, and now employers can enter multiple preparers and translators. There is a dedicated area for including all additional information rather than having to add it in the margins. There is also a supplemental page for the preparer/translator. When the employer prints the completed form, a quick response (QR) code is automatically generated, which can be read by most QR readers and may be used to streamline audit processes.

The instructions have been separated from the form, consistent with other USCIS forms, and include specific instructions for completing each field.

© Copyright 2016 Dickinson Wright PLLC

New Form I-9 Must Be Used By January 22, 2017

USCIS Form i-9This week, the U.S. Citizenship and Immigration Services (USCIS) released a new version of its Form I-9, the Employment Eligibility Verification form. All U.S. employers must begin using the new Form I-9 after January 22, 2017.

Currently, U.S. Immigration and Customs Enforcement conducts over 3,000 I-9 employer audits annually, and immigration enforcement is anticipated to increase due to the Trump presidency. In January, Holland & Hart will host a webinar explaining the changes to the Form I-9 and discussing what immigration reforms employers should expect in a Trump presidency.

Form I-9 Changes

The new version of the Form I-9 includes some clarifications as well as some changes designed to make the form easier to fill out electronically. Completing the Form I-9 electronically will require downloading the latest version of Adobe Reader. Form I-9s completed electronically will still need to be printed and signed by the employee and employer agent by hand. One of the changes is in Section 1 which now asks for “other last names used” rather than “other names used.”

Enhancements for easier completion of the form include drop-down lists and calendars for entering dates, the addition of prompts to help ensure that information is entered properly, on-screen instructions for each field, and easy access to the full instructions. It also includes an option to clear the form and start over. Other changes you’ll find on the new I-9 include:

  • Question regarding whether a preparer or translator was used

  • Space to enter multiple preparers and translators

  • A supplemental page for the preparer/translator

  • Creation of a QR code once the Form I-9 is completed electronically

  • A field to enter additional information such as E-Verify confirmation numbers, termination dates and correction notes, and

  • Separating the full instructions from the form itself.

Reminder of I-9 Process

As you may know, the 1986 Immigration Reform and Control Act (IRCA), prohibits employers from hiring employees, including U.S. citizens, without first verifying their identity and checking that they have proper authorization to work in the United States. The Form I-9 ensures that you have completed this necessary verification for all new hires. USCIS provides the following useful graphic to show the proper timing and process for completing Form I-9s for each newly hired employee:

Labor, Chart

What You Need To Do

You have just over two months to switch to the new Form I-9, so it is best to put procedures in place now to make that switch for all new hires to ensure compliance.

Copyright Holland & Hart LLP 1995-2016.

DHS to Issue New I-9 Form Following Recent Penalties

i-9 violations, visaJust when employers were becoming more comfortable with the complex and lengthy Form I-9, Employment Eligibility Verification that was issued in 2013, the federal government has decided to turn up the heat. First, the Department of Homeland Security (DHS) and the U.S. Department of Justice recently increased the penalties for I-9 violations. Second, DHS has announced that it will soon issue a new version of the Form I-9. These actions bring significant changes for employers.

Under the new fine schedule, employers face penalties such as the following:

  • I-9 paperwork violations:  $216 – $2,156 per Form I-9

  • Knowingly employing unauthorized alien (first offense):  $539 – $4,313 per violation

  • Knowingly employing unauthorized alien (second offense):  $4,313 – $10,781 per violation

  • Knowingly employing unauthorized alien (third or more offenses):  $6,469 – $21,563 per violation

  • E-verify employers – failure to inform DHS of continuing employment following final nonconfirmation:  $751 – $1,502 per violation

The DOJ also increased the penalties for document abuse and discriminatory practices in addressing I-9 issues. Document abuse usually occurs when an employer asks for specific documents or for more or different documents after the employee has already presented qualifying I-9 documents. This violates the I-9 rules, which require that the employer allow the employee to choose which document or documents to present from the I-9 List of Acceptable Documents. The employer then must review what is presented to confirm whether the document or documents meet the verification requirements.

Unfair immigration-related employment practices may occur when an employer treats job applicants and/or new hires differently based upon their immigration status while implementing I-9 procedures or addressing I-9 issues.

Penalties for document abuse and unfair immigration-related employment practices are now as follows:

  • Document abuse:  $178 – $1,782 per violation

  • Unfair immigration-related employment practices (first offense):  $445 –$3,563 per violation

  • Unfair immigration-related employment practices (second offense):  $3,563 – $8,908 per violation

  • Unfair immigration-related employment practices (third or more offenses):  $5,345 – $17,816 per violation

These new fine levels are effective as of August 1, 2016. During I-9 inspections, DHS’s Immigration and Customs Enforcement and DOJ’s Office of Special Counsel will apply these new penalties to violations that occurred after November 2, 2015.  The increased penalties are a reminder of why I-9 compliance is so important.  Employers should review their I-9 procedures and conduct periodic internal audits to best defend against the risk of I-9 penalties.  For additional tips to achieve better I-9 compliance, as well as for updates on the government’s enforcement activities, please see our prior posts.

As to DHS’s announcement of yet another version of the I-9 form, there have been more than 10 different versions in the nearly 30 years during which the I-9 has been required. DHS expects to issue the newest version of the Form I-9 on or before November 22, 2016. DHS will allow employers to continue using the current version (issued in 2013) through January 21, 2017. Employers should use this two-month period to review and gain an understanding of the new Form I-9 before transitioning to it.

© 2016 Foley & Lardner LLP

Civil Penalties Nearly Double for Form I-9 Violations

Significantly Increase for Other Immigration-Related Violations

Due to the implementation of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Public Law 114-74) (“Inflation Adjustment Act”), higher fines and civil penalties have now gone into effect for assessments that occur on or after August 1, 2016. These higher penalties can be applied to violations that occurred after November 2, 2015, the day the President signed the Act into law.

The Inflation Adjustment Act will be implemented by multiple federal agencies that have authority to assess civil penalties. The following is a summary, by federal agency, of the penalties covering violations for the unlawful employment of immigrant workers; violations related to Forms I-9; immigration-related discriminatory employment practices; and violations of the H-1B, H-2A and H-2B temporary visa for foreign worker programs. The increases in many categories are substantial. The penalties for Form I-9 paperwork violations are increased by an eye-catching 96 percent.

Department of Homeland Security fines:

Department of Homeland Security Fines i-9 violations

Department of Justice fines:

Department of Justice Fines

Department of Labor fines:

Department of Labor Fines

The consequence of the above is that employers should continue to aggressively monitor their immigration programs for compliance or suffer the harsher sting of these increased fines. Given that the penalties for I-9 errors are practically doubled, it is more important than ever to ensure I-9s are completed timely, correctly and are periodically audited. Moreover, most I-9 violations are considered continuing violations until they are corrected.

A New Judge is in Town to Rule on I-9 Violation Penalties

Greenberg Traurig Law firm

Last week Stacy Stiffel Paddack was announced as the newest Administrative Law Judge (ALJ) at the Office of the Chief Administrative Hearing Officer (OCAHO). Judge Paddack will rule on the proper penalty in immigration compliance (Form I-9 violations) cases brought by U.S. Immigration and Customs Enforcement (ICE). Welcome aboard, Judge Paddack.

The statutory range for I-9 violations is $110 – $1100 per defective Form I-9. In calculating the proposed penalty amount for I-9 violations, ICE divides the number of violations by the number of employees for which a Form I-9 should have been prepared to obtain a violation percentage. This percentage is used as a baseline fine amount, with deviations available depending on factors such as whether or not this is the employer’s first offense, size of the employer, and whether unauthorized aliens were working for the employer. ICE applies a mechanical calculation when determining the penalty amount and there is little discretion exercised benefitting the employer. ICE’s standard fine amounts are listed in the table below:

 

Standard Fine Amount

Substantive Verification Violations 1st Offense
$110 – $1100
2nd Offense
$110 – $1100
3rd Offense +
$110 – $1100

0% – 9%

$110

$550

$1,100

10% – 19%

$275

$650

$1,100

20% – 29%

$440

$750

$1,100

30% – 39%

$605

$850

$1,100

40% – 49%

$770

$950

$1,100

50% or more

$935

$1,100

$1,100

OCAHO is not bound by ICE’s methodology, and ALJs like Judge Paddack can consider factors not included in ICE’s chart when determining the proper penalty amount, such as ability to pay the proposed penalty and any deterrent effect of the proposed penalty, and can weigh the different factors unequally. A review of OCAHO decisions reveals that the final penalty amount ordered by OCAHO is often significantly lower than the figure on the ICE penalty chart.

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USCIS Correction: Most Employers Must Complete English Version I-9

Varnum LLP
On March 12, 2013 the USCIS announced the new Form I-9 is available and may be completed in English or Spanish. Today, March 13, 2013, USCIS clarified that Spanish I-9 is available for completion only by Puerto Rico employers.
USCIS incorrectly announced full use during a teleconference but has now clarified onwww.USCIS.gov that the Spanish new form I-9 may not be used by employers (except Puerto Rico employers). Employers may continue to use the Spanish form for reference, but the English version must be completed.

The new Form I-9 is available in English and Spanish. In addition, USCIS has published aHandbook for Employers to provide guidance for completing the new Form I-9.

Employers are required to use the new Form I-9 beginning on May 7, 2013, but it may be used immediately. USCIS will accept prior versions of Form I-9, “(Rev. 08/07/09) Y” and “(Rev. 02/02/09) N”, until May 7, 2013.