New “No-Match” Letter Regulations

Beginning September 14, new rules take effect regarding employer responsibilities when a company receives a “No-Match” letter from the Department of Homeland Security or Social Security Administration.  The government issues these letters when the immigration status or employment-authorization documentation presented by the employee is inconsistent with government records.

While the Department of Homeland Security and the Social Security Administration have been issuing No-Match letters for some time, employers have been left to their own devices in deciding how best to deal with a potential employment-ineligible employee.  The new regulations now make it clear that an employer can be held liable and fined if they fail to take reasonable action after receiving a No-Match letter.

In part, these reasonable actions may include:

•  Within 30 days – Checking records to determine whether the discrepancy results from a recordkeeping error on its part, or in its communication to the government agencies. If an error exists, making corrections to records and communicating with the government agencies to ensure that corrected records match; and recordkeeping of the manner, date, and time of the verification.
• If an employer finds that there isn’t an error in its records, requesting that the employee confirm that the records are correct. If they are not correct, the employer would take the actions needed to correct them, inform the relevant agencies , and verify the corrected records with the relevant agency. If the records are correct according to the employee, the company would ask the employee to pursue the matter personally with the relevant agency.

The rules also define the framework for a verification procedure an employer may follow if there has been no resolution after 90 days of receiving the No-Match letter.

After completing all “Reasonable Employer” actions, a company may be considered “in safe harbor” even if the employee in question is in fact unauthorized to work in the United States.  A company will be liable, however, if it is discovered that it had knowledge of the unauthorized work status of the employee in question.

Employer Procedures regarding No-Match letters – Department of Homeland Security

OFCCP Audits coming your way?

If your business is a government contractor or subcontractor, you should already be familiar with the OFCCP’s ( The Department of Labor’s Office of Federal Contract Compliance Programs) Internet Applicant Recordkeeping Rule.  The rule,  which went into effect Feb 2006, sets record-keeping standards for covered companies that use electronic data technology to fill positions. 

If you are a covered company, get ready – the Department of Labor has started the process of auditing companies for compliance.  Prepare now for the audit by making sure you understand the basic concepts and main focuses of the Rule.

First, it’s important to understand exactly who is considered an applicant.  The OFCCP defines an applicant as an individual who meets the following criteria:

• The individual submits an expression of interest in employment through the Internet or related electronic data technologies;
• The contractor considers the individual for employment in a particular position;
• The individual’s expression of interest indicates the individual possesses the basic qualifications for the position; and,
• The individual at no point in the contractor’s selection process prior to receiving an offer of employment from the contractor, removes himself or herself from further consideration or otherwise indicates that he or she is no longer interested in the position.

The Rule’s main focuses are Recordkeeping Requirements, Defining Qualified Candidates, and Data Management .

The Department of Labor Website has a great FAQ page which goes into detail on each topic.

If your company receives an audit notification, or you would like more clarification on the Internet Applicant Recordkeeping Rule, Contact our office to schedule a consultation with an attorney, or to learn more about our Business Solutions programs.

Holding on to New Hires

A significant number of organizations lose as many as a quarter of their new hires within the first year, according to a survey by Novations Group, a global consulting firm based in Boston, and Equation Research. One-third of employers suffer such a loss, and for an additional 11% of companies first-year departures can even approach 50%.

The survey found that the top reasons new employees left their jobs were:

• Unrealistic expectations of the job and organizations
• Failure to grasp “how to get things done” around the organization
• Poor communication with immediate supervisor
• Failure to develop a sense of belonging and purpose

The study underscores the importance of communication between employers and employees (especially new employees.) The communication should begin in the interview process with business owners and managers giving prospective employees a true and realistic description of the job and company expectations. A comprehensive orientation or “on-boarding” program should include information about company policies and procedures. Let new employees know where they can go when (not if) they have questions.

It’s important to note that one of the biggest reasons that newly-hired employees did not stay is a failure to establish a sense of belonging and purpose. While there are certainly times when an employee/employer match just isn’t right, take some time and gauge the climate of your workplace. Is it a hospitable environment or a harsh one? Are there other issues that need to be addressed, such as general poor morale or disciplinary problems? Identifying and correcting these issues now can save you turnover dollars down the road.

 

How can Hippo & Fleming Law Offices help?   We can work with you to develop effective interview questions so that you can get the best candidate (and best fit) for the job. Our staff can review your existing job descriptions, or help your create new descriptions so that you can accurately and effectively communicate your expectations to your new employee, and he isn’t surprised by his job duties.  We can work with you to create an orientation program that gives your new hires the information and tools they need to start producing for you.

Contact us for more information on our Business Solutions Services for your business.

More information:

• Novations Group
• Equation Research

From Entrepreneur to Employer

The move from Entrepreneur to Employer is a significant milestone in growing a business. In most successful business ventures, there comes a point when the owner realizes he can’t do everything on his own.

Many companies have found that the idea of working with an independent contractor, rather than hiring an employee sounds promising.  After all, businesses don’t withhold Federal, State, or Social Security taxes, or pay unemployment or workers’ compensation insurance for independent contractors.  They also don’t need to offer benefits like vacation or health insurance.

Caution is recommended, though.  Even if both parties agree that the arrangement is an employer/independent contractor one, several state and federal agencies may disagree, and a business owner may end up paying all required employment taxes, wages owed, unemployment tax and benefits, or workman’s compensation, PLUS the possibility of penalties, interest, attorney fees and even potential criminal sanctions.  Each agency has it’s own reason for ensuring that workers are classified correctly – the IRS want to make sure that taxes are being paid correctly, the Department of Labor wants to make sure that workers are being compensated correctly, state Unemployment and Worker’s Compensation agencies want to ensure that workers can receive the benefits that they are entitled to, and each agency has its own test to determine whether a worker is an employee or independent contractor. The one thing all the agencies have in common, though, is the willingness to impose penalties on companies who misclassify employees as independent contractors.

So how can you know for sure if your independent contractor is classified correctly? Although each case is determined individually based on the facts surrounding the situation, a decision can generally be made by looking at the employer / worker relationship and where the control lies. If a business dictates “how, where, and when”, the worker is most likely an employee. If the business perceives itself to be a “client” of the worker, it’s more likely to be an employer / independent contractor relationship. Again, since each case is determined on an individual basis, it’s important that an employer analyze the situation for which he is hiring the worker carefully.

How can Hippo & Fleming Law Offices help?

• Our attorneys can help you analyze the relationship between your business and independent contractors to make sure you are in compliance.
• Our attorneys can consult with you before you make your first hire to analyze your workforce needs.

Questions? Contact our office for more information.