Category Archives: Documentation

Employers Must Use Revised I-9 Form Beginning September 18

The very important I-9 form, which verifies a new employee’s identity and eligibility to work in the United States, has been revised again. Employers must start using the revised form on September 18, 2017.

The revision, marked “07/17/17 N” and carrying an expiration date of 08/31/19, has to be completed only by new hires. You do not have to go back and get all of your current employees to recomplete an I-9 just because the form changed after their hire date.

Employers must complete an I-9 form on each new employee within 3 days of hiring. This process started in 1986 as part of the Immigration Reform and Control Act, which prohibits employers from taking on a new employee without verifying the employee’s identification and eligibility to work legally in the United States.

The verification is done by reviewing the employee’s identification and employment eligibility documents, such as a passport, a permanent resident card, or a driver’s license and social security card, and completing the I-9 form. There is a very helpful employer’s guide available online that shows you what a valid document is supposed to look like. Doing your due diligence requires that you consult that guide each time you look at a new employee’s documents.

Because of the views of the current administration, employers can expect an increase in enforcement of immigration laws, including more frequent ICE audits of your I-9 compliance. There are expensive penalties if you as an employer cannot produce accurately completed I-9 forms for each of your current and former employees.

The minimum fine is $216 per error on an I-9 and the maximum is $2,156 per error (including current employees and former employees) for each paperwork violation. That means that a single I-9 form which has multiple errors could cause the employer to be responsible for multiple penalties per form. If ICE determines that the employer has failed to accurately complete I-9s on at least 50% of its employees, the maximum fine of $2,156 will be levied on the employer for each form.

You must keep an I-9 form on every active employee as long as the employee works for you. For a terminated employee, you must be able to produce an I-9 for three years after the hire date or one year after termination, whichever is later. To make it easier to remember, most employers wait to purge I-9 forms until three years after an employee’s termination.

Typically, when ICE appears for an I-9 audit, they will require that you produce I-9 forms for each current employee and any employee terminated in the last three years. You are given 72-hours’ notice to pull all of these forms together, which is why many employers store the I-9 forms together rather than in each employee’s individual file.

Six Steps to Preventing and Reacting to Employee Embezzlement

This week’s local headlines involve the city manager of Sunray, formerly the police chief and city manager of Panhandle, being accused of employee embezzlement. Rob Roach was arrested this week after an investigation by the Texas Rangers for alleged theft by a public official of property between $30,000 and $150,000.

I have no idea about Mr. Roach’s guilt or innocence, but the news did remind me about one of the most disappointing things about my 30 years of law practice in Amarillo, Texas–the large number of times I have had to help an employer who has been ripped off by a trusted employee.

I have seen employees use company credit cards for personal purchases (how many law firms need to be buying diapers at Sam’s?), steal cash paid by a patient for a medical visit, forge signatures on checks made out to the employee (one trusted employee did this while her boss was undergoing chemotherapy), turn in fictitious business expenses, and create false company payrolls or bank accounts.

Unfortunately, employee embezzlement is not unusual in our area, but it is often preventable. We Texans tend to be trusting people, but you wouldn’t just leave the front door to your house open with a sign pointing out where you keep the good jewelry. As a business owner or manager, you should be just as wise about protecting your business and your livelihood from thieves.

Here are six steps that you can take to help curb any embezzlement by your staff:

  1. Set the tone. Do you as a business owner or manager demonstrate integrity in how you do business? Your employees are taking their cues from you. If you cheat on your taxes, overcharge your customers or rip off your suppliers, don’t be surprised if your employees begin to feel that they are entitled to cheat you as well.
  2. Hire well. If an employee is going to be handling money in your business or given a company credit card, be sure to do a criminal background check (following all the Fair Credit Reporting Act requirements for doing so). Check all of the applicant’s references and past employers, asking specific questions about the potential employee’s integrity.
  3. Reduce the opportunity for theft. Guard which ones of your employees will have access to company goods and cash. Protect your keys, passwords, and access to your checks, your online banking and all accounting records. Use the built-in protections of your software. Quick Books, for example, will allow you to set up limited access for certain functions so that no employee has free rein with all of your bookkeeping. Require weekly or monthly balance sheets, budgets and profit and loss reports and study them carefully. In addition, train yourself to use your accounting program so you can randomly double-check things yourself.
  4. Utilize more than one person for the bookkeeping. You should have checks and balances in place, such as having a different person sign the checks than the one who printed them. If your customers pay in cash, your system for receiving the deposits, writing receipts, and reconciling the cash to the accounts must be clear and followed religiously. Cross-train more than one person for each job so that there is someone always available to audit the other’s handling of the money. Take a cue from banks, which often require their financial personnel to take vacations lasting at least one week so that another person can review the absent employee’s money-handling and lending procedures during that break.
  5. Watch employees who are at risk. Triggers such as gambling, addiction and family stressors often proceed employee theft. You must be aware of what is going on in your employee’s lives outside of work if you want to prevent misconduct inside of work. Also, keep in mind that many of your employees have financial problems every day, even without specific triggers. It is just a fact that Americans tend to live beyond their means. Providing free financial education and guidance may not seem like your job, but it could prevent an employee’s desperate attempt to embezzle from you.
  6. Consider surveillance of your workplace. While audio recordings create potential federal wiretapping issues, you can always install video surveillance of your workplace. You can also search employee emails and physical surroundings, like desks. Of course, you need to talk to your employment lawyer before starting these activities to get the proper consents and notices and make sure you are not violating privacy rules, but if you believe some surveillance or searching is the best way for you to protect your property, you should explore this option.

Despite all precautions, you may someday suspect that an employee has embezzled from you. If you are unfortunate enough to be ripped off by an employee, here are the six steps to reacting to the theft:

  1. Internal investigation. You can put an employee you suspect of embezzlement on a suspension while you investigate. Get help from your employment attorney as you gather documents and talk to coworkers so that you understand exactly what happened and how much was stolen.
  2. Confront the employee. Before you fire the suspect, have a face-to-face meeting with the employee to allow the employee to explain, if possible. If the evidence still demonstrates that the employee is guilty, then talk to the employee about a confession (in writing) and repayment of the debt. Once caught, some employees are ashamed and cooperative. However, do not block the employee from walking out (you will be accused of false imprisonment) or defame the employee by sharing information about the theft with those who have no pressing business need to know.
  3. Fire the employee. Don’t worry about a wrongful termination suit or unemployment claim. Clear evidence of theft by the employee is one of the strongest defenses to any kind of legal complaint by a former employee. However, be very careful about deducting your losses from the employee’s final paycheck. The employer has the burden to demonstrate that the employee is personally and directly responsible for the theft before the deduction can be taken, so make sure your evidence is solid.
  4. Alert your insurance company. Most business insurance policies include an employee theft provision. You may be able to recoup some of your losses with insurance. File a claim with the insurance company and provide it with the evidence. Just understand that often the insurance company will insist that you also involve the police.
  5. Prosecute the theft. Your insurance company may require this before reimbursing you for your losses. More importantly, you need to prosecute to prevent the employee from doing this to another employer. Getting away with a theft once makes it more likely the employee will steal again.
  6. Analyze and correct your procedures. Do a deep dive into your security vulnerabilities that led to the embezzlement. Did you allow one person too much access? Were you sloppy with your checks and balances? Did you fail to review your credit card statements? You need to understand why this happened and how to prevent it in the future.  

Simple Firing Form Keeps Employer’s Story Straight

An employer should always carefully document the reasons for firing an employee. But your termination documentation doesn’t have to be complicated.

I’ve attached a one-page form that you as an employer can quickly fill out and place in the employee’s file whenever you have to terminate the employment of one of your workers. But just because the form is simple doesn’t mean that you shouldn’t put some thought into the process.

Even though Texas is an “at will” employment state, it is wise to have good reasons for firing an employee. You need to stick to those reasons exactly when you complete the unemployment form from the Texas Workforce Commission, if you get a discrimination complaint from the Equal Employment Opportunity Commission and if you hear from the Department of Labor on a retaliation case.

Nothing looks more suspicious to a government investigator or to a jury than an employer’s termination story that changes over time. The all-important consistency of your answers begins with this document filled out on the day that the employee is terminated.

Clients are always asking me what they can do to prevent getting sued by an employee who was fired. Having good, nondiscriminatory reasons for the termination and documenting those reasons carefully are the first steps in preventing a lawsuit, or at least winning one.

Click here to download this simple firing form:

Termination Documentation Form 

White House Fails Basic “Firing 101”

Note: This is not a political post. President Donald Trump had the right and the authority to fire Acting Attorney General Sally Q. Yates last night.

From an employment lawyer’s perspective, the White House’s written statement about Sally Yates’ firing is a textbook example of how I advise my employer clients not to behave. https://www.whitehouse.gov/…/statement-appointment-dana-boe…

“The acting Attorney General, Sally Yates, has betrayed the Department of Justice by refusing to enforce a legal order designed to protect the citizens of the United States. . . . Ms. Yates is an Obama Administration appointee who is weak on borders and very weak on illegal immigration.”

We employment lawyers encourage our business clients to leave a fired employee with his/her dignity. I would never suggest an employer use loaded words like “betrayed” and “weak” or to impugn a long-term, high-ranking employee’s integrity during a job termination meeting. It is ill-advised in most industries to burn bridges like this or to set your business up for a lawsuit by a scorned ex-employee.

Sometimes terminating an employee’s job is necessary. For advice on how to fire in a more beneficial way, read my blog post on firing without fear.

2017 New Year’s Resolutions for Employers

At the beginning of each year, I encourage my business clients to make some New Year’s resolutions to achieve better compliance with the myriad employment laws. Based on what many of my clients are telling me and what the courts and enforcement agencies have on their agendas, here are the employment matters that you could improve in 2017:

  • Immigration compliance: President-Elect Trump has promised strong enforcement of the immigration laws. Many of those enforcement efforts will affect employers, such as mandatory use of the E-Verify system to double-check the legal status of every new hire. Even before that requirement is put in to place, resolve to correctly complete the mandatory new I-9 form for every new hire. The best way to make sure the I-9 is correctly completed: consult the government-published Employer’s Guide to the I-9, particularly the color pictures that show you exactly what a valid permanent resident card, for example, looks like. Also, be prepared that some of your employees may lose their work eligibility under the new administration, including young people (known as the Dreamers) who became eligible under the Deferred Action for Childhood Arrivals (DACA) program in 2012.
  • Market rate on salaries: Texas’ unemployment rate was sitting at 4.6% at the end of November 2016. Amarillo’s rate was 3.0%. Economists consider 3% to be full employment, meaning you as an employer maybe finding it difficult to attract and keep the talent that you need. I am always surprised therefore when my clients don’t keep up with the market data on salaries. Resolve in 2016 to tap into the data available on the Bureau of Labor Statistics for your industry and your location to really analyze whether your salaries are sufficient. Employees will also be looking at Salary.com and Payscale.com, so you need to do the same.
  • Improve your PTO offering: I am amazed when I am drafting or revising my client’s employment handbooks how little paid time off many local employers offer. Many don’t give an employee any vacation, sick leave, personal days or other paid time off during the first year and then rarely allow more than five days per year after that. This will not attract top talent or create long-term loyal employees, I promise you. Particularly if you are hiring millennials or need an educated workforce, you need to up your game on PTO. My 22-year-old son was hired in 2015 by a consulting firm in Washington, D.C., right out of college (with a degree in economics and a master’s degree in business analytics) and offered three weeks of PTO that started accruing immediately. After one promotion, employees at his company get four weeks of PTO. I’m not arguing that every job merits that much PTO, but resolve in 2017 to at least consider that two weeks per year should be the minimum to improve your hiring, increase your retention, rejuvenate your employees every year and allow your employees to deal with the inevitable ups and downs of life. As an employment lawyer, I know that most employee lawsuits arise after the worker leaves your employ. Keeping your staff reasonably happy and loyal by providing better PTO will provide you with other benefits too, but I like it because you will spend less time with me in court and instead we can just have lunch and talk about more pleasant topics.
  • Health Reimbursement Accounts: None of us know what the new administration will create to replace the Affordable Care Act, so I can’t give you much advice yet about your group health insurance offerings. However, employers with less than 50 employees who don’t offer group health insurance should resolve to consider using Health Reimbursement Accounts in 2017 because of the bipartisan 21st Century Cures Act that sailed through Congress and the President’s signature in December. That act included permission for small employers to now use HRA’s to pay for qualified out-of-pocket medical expenses for their employees and to fund individual health insurance premiums. In other words, employers can use pretax dollars to help employees to purchase their own insurance on the open market while capping the employer’s contribution at a reasonable amount. There are, of course, many restrictions associated with this opportunity, but it is worth consideration by smaller employers in 2017.
  • Good Documentation: Every employment lawyer would like for you to add this to your resolution list each year. Memories fail and managers move on, so written documents are often an employer’s only evidence of the nondiscriminatory reasons that certain employment actions were taken. Understand and resolve that performance reviews, reasons for bonuses and merit increases, violations of policy, attendance problems, changes in job duties and disciplinary actions will be well-documented in 2017. I’ll help with any of kind of documentation, but I highly recommend that you get me involved whenever the documentation is of disability or religious accommodations, FMLA, harassment claims, overtime or other compensation problems, egregious policy violations, demotions, final warnings, layoffs and terminations.
  • Gratitude: Resolve that you will say “thank you” more often to your employees in 2017. Studies have repeatedly shown that this one action can enhance employee engagement and loyalty even more than raises and promotions. Gratitude can also make your workplace so much more enjoyable for all of your employees.

 

New Employees Should Complete New I-9 Form

If you are hiring any employees, this is just a quick reminder that you need to start using the new I-9 form to confirm your new worker’s eligibility to be employed in the United States.

The new I-9 form was released on November 14, 2016 (look for that date on the form to verify that you are using the most recent one). You already can be using the new form, but it is mandatory that you are using that new form by January 22, 2017. My suggestion for making it easy on yourself is to begin using the new form today, or at least no later than January 1, 2017, so that you start the new year off right.

You do not have to update any of your completed I-9s on current employees with the new form. It is only mandatory that you start using the new I-9 with employees who are hired beginning in January 2017.

As you know, employers must assure an I-9 is completed on each new employee hired (citizen or otherwise) to document identity and authorization to legally work in the United States. The new employee must bring the proper forms of identification and work authorization so that you can complete the I-9 by the third business day of employment, or you can no longer employ that worker.

Mistakes happen on an incredibly frequent basis while filling out I-9 forms and employers get penalized substantially if Immigration and Customs Enforcement (“ICE”) audits an employer’s forms. Here is a guide to the most common mistakes and how to avoid them.

Another way to avoid mistakes on the I-9 form is Continue reading New Employees Should Complete New I-9 Form

Simple Hiring Checklist for Texas Employers

hiring-signHiring in Texas can be done in a very efficient and effective manner that reduces your chances of violating employment laws if you follow this simple hiring checklist. While large employers may need to add many more steps, I have found in 25+ years of law practice that many small employers aren’t even doing these simple steps, but should be:

 

  • Is one well-trained centralized manager with human resources experience doing the hiring instead of a group of supervisors who might ask the wrong questions?
  • Do you have a job description of the job for which you are hiring so you know the job-related qualifications?
  • Did you carefully word your job advertising so as not to discriminate?
  • If you require that an application be completed, is your application form up to date and without legal pitfalls?
  • Does the interview focus only on job-related qualifications and not personal information?
  • Do you stay away from open-ended questions like “Tell me about yourself”, which could elicit all kinds of information from the applicant that could be considered the basis of a discrimination claim?
  • Is the interviewer using an outline so that each applicant is asked the same questions and you can compare apples to apples rather than relying on the interviewer’s conversation skills and “gut reaction”?
  • Do not ask questions in the interview about the following topics. If this seems like a whole bunch of rules to remember, try focusing on this one rule: If your question isn’t related to how the applicant could perform the job duties, don’t ask it.
    • Race or color (photographs should not be requested)
    • Gender or marital status or sexual orientation
    • Whether applicant has young children, what his/her daycare arrangements are, or other family questions.
    • Age, including date of birth or when the applicant graduated from high school
    • Religion, including “Where do you go to church?” and “What do you do with your Sundays?”
    • Union membership or affiliation
    • Criminal arrests or convictions (you can run a background check if you decide to actually offer the job, but you must comply with the Fair Credit Reporting Act in obtaining the background check)
    • National origin or ethnicity (don’t ask about an applicant’s birthplace, accent, parentage, ancestry).
    • Citizenship (only inquire into an applicant’s eligibility to work in the United States, not their citizenship).
    • Education beyond what is necessary for the job (inflated educational requirements can have a chilling effect on minority applicants; therefore only ask educational questions that are relevant to the actual job responsibilities).
    • What clubs and organizations do you belong to? What causes do you support? (this could reveal illnesses, religious beliefs, family issues, marital status, race and other grounds on which you could be accused of discriminating).
    • Are you pregnant? Are you planning on having kids? (pregnancy and/or gender discrimination).
    • Have you ever declared bankruptcy? (discrimination under the Bankruptcy Act).
    • Is English your first language? Do you know that we have an English-only policy? (national origin discrimination)
    • Do you have elderly parents or an illness in the family that would take you away from work? (disability discrimination).
  • Do not ask the following questions in an interview that could violate the Americans with Disabilities Act:
    • Whether an applicant needs a reasonable accommodation to perform the job, unless the disability is apparent or the applicant voluntarily divulges it.
    • Details of an applicant’s worker’s compensation history.
    • Whether the applicant can perform “major life activities,” such as standing, lifting and walking.
    • Whether the applicant has any physical or mental impairments.
    • Whether the applicant is taking prescription medication or any other lawful drugs.
    • If the applicant has used illegal drugs in the past or has ever been addicted to drugs.
    • Whether the applicant has participated in an alcohol or drug rehabilitation program.
    • How frequently the applicant consumes alcoholic beverages.
  • Certain questions are permissible under the ADA:
    • Whether an applicant can perform the essential functions of the job.
    • How the applicant will perform the essential functions of the job, if all applicants are asked this question.
    • Whether an applicant needs reasonable accommodation for the hiring process.
    • Whether an applicant can meet the employer’s attendance requirements.
    • Whether an applicant has ever been convicted of driving under the influence of alcohol or drug if driving is an essential duty of the job.
    • Whether an applicant is a current illegal drug user (drug testing the successful applicant after a conditional offer of the job is the best way to handle this).

Once you think you have narrowed your choices down to the applicant that you would like to hire, you can make a job offer conditional upon the results of these items: Continue reading Simple Hiring Checklist for Texas Employers

Employers Need Solid Reasons for Firing

Discrimination cases filed by former employees against their companies are usually won or lost on one concept—pretext—meaning that the reason given by the employer for the firing appears to the jury as a cover-up or excuse for the real reason, which the plaintiff will strongly suggest is discrimination. If the employer’s reason for firing the employee doesn’t perfectly line up with the facts developed in discovery and at trial, the business has a good chance of losing the case to the disgruntled employee.

Let me give you an example. If you fired Mary for being tardy on five specific occasions, but your security camera tapes, your time clock records, her emails and the testimony of other employees show she was not late on all of the dates that you specified, Mary’s discrimination case just got a big boost because your reasons look like pretext for terminating Mary. Then the door is wide open to say that her termination from employment occurred because she is black, a woman, disabled or born in another country.

When presented with this contrary hard evidence about Mary’s tardiness, it is not going to convince the jury when you say, “Oops, I got the dates of her tardies wrong” even if that is what actually happened. There is little a defense attorney can do to help you with the jury at that point because your reasons for the termination just look like an excuse for something more sinister.

Juries are pretty savvy in sifting through an employer’s reasons. As the employer, you must assure that the reasons you fire an employee are specific, provable, clearly-stated, well-documented and stay consistent from the time you first discipline the employee to the time of trial. Any variation in your reasons will come off looking like pretext.

Here are some other things that employers do that usually will be perceived as pretext in front of a jury: Continue reading Employers Need Solid Reasons for Firing

Employers Required to Display Poster Changes

Effective August 1, 2016, all employers of every size workforce must comply with two new mandatory federal poster changes.  The US Department of Labor (DOL) has updated its Fair Labor Standards Act (FLSA) poster and the Employee Polygraph Protection Act (EPPA) poster.

The changes to the FLSA poster include removing civil penalty amounts, the addition of the riflsaghts of nursing mothers, and a deletion of text under the Child Labor section. Except for a few very narrowly exempted employers, whether you have two employees or two hundred employees, you need to put up this new poster.

The changes to the EPPA poster include a removal of a civil penalty limit, a change in their toll-free phone number, and an additional TTY phone number. All employers, regardless of the number of employees and regardless of whether you would ever consider giving your employees a polygraph, must display this poster in the workplace.

The mandatory notices must be posted immediately. As with all of your employment posters, these two new ones should be displayed in a prominent and conspicuous place in each of your establishments wherever notices can be readily seen by employees and applicants. A spot right next to your time clock or in your employee entrance area is ideal. Just make sure wherever you place your posters is a place that all of your employees regularly enter.

If you need help knowing which posters besides these two you need to have displayed in your workforce, you can find the lists of required federal posters here and Texas posters here. All of the required posters are available online for free. You don’t need to pay a commercial service for a combined poster that isn’t customized to the specifics of your workplace.

Don’t ignore your federal and state posting requirements. The penalties have risen recently. For example, if you have 15 or more employees, the failure to put up the required EEO poster was raised to $210 in 2014 for each of your locations and is now indexed to the Consumer Price Index to increase with inflation. Considering you have as many as twelve posters required in your workplace, you don’t want to be fined for something so easily remedied.

Employers Responsible for Preventing Illegal Immigration

In all of the talk about immigration in this election year, it is important for businesses to understand that the responsibility for preventing illegal immigration generally rests on employers, who must verify that all new hires are eligible to work in this country.

Under the Immigration Reform and Control Act (IRCA), employers are mandated to verify an employee’s identity and eligibility to work in the United States by completing an Employment Eligibility Verification, more commonly known as a Form I-9.

The current version of the I-9 (available here) says on the form that it expired on March 31, 2016, but it is still in effect three months later because a newer version has not been released.

Every employer, regardless of the size of the business, must present the latest version of the Form I-9 to each prospective employee and confirm that employee completes and signs the employee section of the form.  The employer is required to inspect the employee’s supporting documents and have an authorized individual from the Company sign the employer section of the I-9.  All of these items must be completed within three (3) business days of the employee’s hire date.

An employer’s failure to properly complete the Form I-9 can bring about costly fines by the U.S. Immigration and Customs Enforcement (ICE).  As recently as April 2016, a judge ruled that Golden Employment Company in Minnesota was liable for failure to timely present I-9 forms for at least 125 employees as well as not preparing forms in any capacity for almost 236 workers.  The employer also inaccurately completed some of the I-9s.  The civil penalties totaled $209,600.

Most ICE inspections result from complaints from current employees, former employees, labor unions and even competitors. However, random inspections are also undertaken by ICE.  It’s important to make sure all of your work eligibility records are up-to-date and properly completed.

What can you do to avoid penalties and ensure I-9 compliance? Continue reading Employers Responsible for Preventing Illegal Immigration