What Every Employer Needs to Know about I-9's

What Employers Need to Know about I-9’s

• ICE penalties from worksite enforcement inspections increased to $5,300,000 in FY 2010, up from $1,033,291 in FY 2009, with average fines exceeding $110,000
• ICE criminally charged a record-breaking 180 owners, employers, managers and/or supervisors in FY 2010, up from 135 in FY 2008 and 114 in FY 2009.
• ICE conducted more than 2,200 I-9 audits in FY 2010, up from more than 1,400 in FY 2009.
• ICE debarred 97 business and 49 individuals in FY 2010, up from 30 and 53, respectively, in FY 2009.

US Immigration and Customs Enforcement announced earlier this year that it has notified about 1,000 companies throughout the country that it will be auditing them to ensure they are not employing undocumented workers.  The audits include employers in every industry across all 50 states.

• Hiring an unauthorized worker can result in fines up to $5,500.
• Improperly filed I-9 forms that are missing information can lead to fines up to $1,100 (even if the employee in question is legally authorized to work in the United States).
• Knowingly committing or participating in document fraud can lead to fines up to $3,200 per document for the first offense and up to $6,500 per document for subsequent offenses.

On July 22, 2010, the Department of Homeland Security (DHS) published a final rule amending the June 2006 interim regulations relating to I-9 forms.  The final rule clarifies that the employer has 3 days from the first day of work for pay but not including the actual date of hire to complete Section 2 of the Form I-9; or, Thursday if the employee begins work on Monday.  Most employers need not count weekends or federal holidays when determining its Form I-9 completion deadlines. Retailers and other similarly situated employers may still be held responsible for weekends and holidays if those days are ordinarily "days on which the employer conducts business" pursuant to 1997 INS guidance. 

USCIS now requires additional information to be recorded such as the DS-2019 and I-20 numbers.  Employers with F, J & M employees clearly have additional work to do and more training to provide to HR staff.

For an H-1B employee’s Form I-94/I-94A issued for employment with a previous employer, the employer should retain the following documents with the employee’s existing Form I-9 to prove filing for an extension of stay on the employee’s behalf:

• A copy of the new Form I-129
• Proof of payment for filing a new Form I-129; and
• Evidence that you mailed the new Form I-129 to USCIS

Further, employers are not required to update Form I-9 when an employee changes his or her name, but they may nevertheless do so in Section 3. Employers may accept a document with a different name than what was entered in Section 1 (e.g., due to married name, compound name, or misspelling) as long as the employer is satisfied that the document(s) reasonably appear to be genuine and relate to the employee.

When the employment is time limited, as in the case of aliens authorized to work for a specific period of time, the date of expiration must be noted and the I-9 revisited prior to that time so that it can be updated and the individual’s status re-verified in Section 3. Failure to do so can be financially costly to the employer who is audited by ICE and found to have unauthorized individuals on payroll.

The final rule clarifies the audit trail requirements such that an electronic Form I-9 system need not show every time a Form I-9 is viewed or accessed, but it must track any:

1. creation,
2. completion,
3. alteration,
4. update, or
5. other modification

of a Form I-9 by recording:

1. the date of access,
2. the identity of the individual taking the action, and
3. the particular action taken.

If an electronic Form I-9 storage method is utilized, it must contain an indexing system that is comparable to a reasonable hardcopy filing system.  Lastly, DHS addressed the requirement that electronic Form I-9 systems be capable of printing a transaction record that must be given to the employee at the time of Form I-9 completion. DHS did modify the regulation in part, however, by only requiring that a receipt be provided when an employee requests it. The receipt only needs to be issued within a reasonable time, and it may be transmitted via e-mail rather than printed.

In Summary

It is obviously a wise choice to pay meticulous attention to any new rules put forth by the DHS. Noncompliance can clearly result in a heavy financial burden—and no employer wants to face possible criminal prosecution. It is always in an employer’s best interest to diligently follow the DHS rules for I-9 compliance and to be fully informed about new updates and amendments to existing regulations. 

Rehan Alimohammad is an Attorney and CPA.  In the past two years our firm has given over 100 seminars in the areas of immigration law and tax law.  Please visit our website at www.attorneyrehan.com, or call our offices at (281) 340-2074 or (800) 814-3920 for more information.

Disclaimer:  This article is not meant as specific advice regarding a person’s individual case.  An attorney should be consulted.  This article does not create an Attorney-Client relationship.   Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.  (The foregoing legend has been affixed pursuant to U.S. Treasury Regulations governing tax practice.)

What is the L-1 Visa and How it Affects You

L-1 Visa

What is the L-1 Visa

The L-1 visa is a non-immigrant or temporary visa.  It is an intra-company transfer visa available to persons coming to work in the US for an employer that is related to a company the applicant worked for prior to entering the US.  There are 2 main categories of L-1 visas that will be further discussed: L-1A and L-1B.    

Advantages of an L-1 Visa

While there are a number of important requirements to qualify in this category, the category offers a number of advantages that make it worth considering over other types of visas including:

• there is no annual limit on the number issued,
• the L-1 visa holder can apply for permanent residency while on an L-1 visa

L-1A’s can file in an employment based category (EB-1) which does not require a labor certification and is much quicker than other employment based categories.

What are the Requirements for an L-1

The first requirement for the L-1 is for the applicant to have been employed abroad for one year of the last three for a parent, affiliate, or subsidiary of a US employer.  Any time spent working in the US will not count toward the one year of required employment, though time spent in the US will not be considered to have disrupted the time of employment abroad. 

Second, the foreign firm and the US firm must have a “qualifying relationship.”  The US and the foreign firm must have common majority ownership, or, where there is less than majority ownership, common control by the same person or entity. 

Lastly, the applicant must be coming as a manager, executive or specialized knowledge employee.

L-1A

The L-1A category applies if the applicant is coming as a manager or executive.  An “executive” is one who directs the management of the company or a major part or function of the organization.  Typical executive positions are presidents, vice-presidents and controllers.  An executive is expected to have a supervisory role in the company and would not include people who are primarily performing the specific tasks of production or providing service to customers.  A “manager” directs the organization, a department, or a function of the organization.  Like executives, a qualifying manager will not be overseeing the primary performance of a task. 

L-1B

The L-1B category applies if the applicant is not an executive or manager but has "specialized knowledge".  Specialized knowledge refers to employees with

• a special knowledge of the company's products and their applications in world markets;
• an advanced or proprietary knowledge of the company's processes or procedures.

How long is an L valid for?

Executives and managers may stay in L-1 status for up to seven years.  Specialized knowledge employees may stay in L-1B status in the US for up to five years.  The visas will be granted with an expiration of up to three years. Whether the visas are multiple entry or not depends on the applicant’s country of origin.

Persons coming to open up a new office in the US will only be granted a one-year stay in the US.  There are specific requirements for this situation and an attorney should be consulted. 

Other Issues

There are special procedures that make it easier for companies sending over large numbers of applicants to get L-1 visas for their employees.  Companies that qualify can receive a “blanket approval” for all of their workers rather than having to apply to INS individually for each employee.  To qualify for a blanket L petition, the company must meet the following tests:

• The US and foreign offices must be engaged in commercial trade or services;
• The employer's US office must have been in business for at least a year;
• The employer must have at least three domestic or foreign branches, subsidiaries, or affiliates;

The Employer must show one of the following: a) at least ten L-1 visas were approved in the last year; b) the company had US sales of at least $1 million, or c) the US work force numbers over 1,000 workers.

Other Issues

In 2005, a USCIS memo was released regarding changes that were made law in December of 2004.  These changes prevent outsourcing of applicants on an L-1B visa to other U.S. companies.  Also, the requirement of at least one year of employment in the past 3 years now applies to all L-1 workers.  Previously, workers under a blanket L petition only needed to be employed for 6 months in the past 3 years.

Rehan Alimohammad is an Attorney and CPA.  Our office handles all tax law and immigration law issues.  Please visit our website at www.attorneyrehan.com, or call our offices at (281) 340-2074 or (800) 814-3920.

Disclaimer:  This article is not meant as specific advice regarding a person’s individual case.  An attorney should be consulted.  This article does not create an Attorney-Client relationship.  

H-1B Visa & its Requirements

H-1B Visa & its Requirements:

The H-1B is a nonimmigrant work visa for a person who will be employed temporarily in a specialty occupation or as a distinguished fashion model.  This means that an H-1B holder does not entitle the person to remain in the U.S. permanently nor does it provide the person with a green card.  A person has to go through other means to obtain permanent residence.

The worker must be employed in a specialty occupation, which is defined as a job that requires application of specialized knowledge and at least the equivalent of a 4-year degree.  Examples of specialty occupations are:  architects, engineers, scientists, attorneys, etc.

The applicant for this H-1B visa must show 1) they possess such qualifications, as stated above, 2) the job is a specialty occupation, and 3) the employer has a need for such a position.  The applicant does not need to show that there are no qualified U.S. workers.  The “no able and qualified worker” requirement applies to labor certifications not in an H-1B application. However, there are other representations made to the Department of Labor including paying the prevailing wage.

Advantages of H-1B Visas

The H-1B visa is one of the few visas that allow dual intent.  While the applicant is here in H-1B status, which allows them to stay temporarily, the person can also apply for something that will allow them to gain permanent residence.  This means while on H-1B or applying for H-1B, the applicant can apply for a green card through a labor certification or other basis.

This visa also allows the worker to work for the specific employer, and within the restrictions of the H-1B Visa.  In other words, getting an H-1B Visa with employer A does not allow one to work for employer B or to be self-employed.

The visa also allows dependents to remain in status, on H-4 visa.  The H-4 visa does not allow the dependent to work legally.  One can remain in H-1B status for 3 year periods up to a maximum of 6 years, but can get one-year extensions beyond the 6 years if they meet certain requirements.

How long to get an approval?

Of course the time it takes to get an application approved varies depending on the place of employment and the strength of the application.  Premium Processing is available for an extra USCIS/DHS fee of $1000, which guarantees that within 15 calendar days, the applicant will receive an approval, a denial, or a request for more evidence.  Regular processing could take approximately 4-6 months.  If the applicant is currently not in H-1B status, then they cannot work under valid H-1B status until the application is approved, and may have to wait until the new fiscal year of H-1B’s arrives.

Switching Employers

If the applicant is currently in H-1B status, then most likely (depending on type of employer) the applicant does not have to wait for approval to start working for a different employer.  They can start working for the 2^nd employer upon filing for the new H-1B.  Note that H-1B’s are employer-specific.  The only advantage of switching from one employer to another is that the person can start working immediately for the 2^nd employer upon filing (this rule is called AC21).  However, a new application does have to be filed by the 2^nd employer.  There is no such thing as transferring H-1B applications from one employer to another.  All of this also assumes that the applicant has not exceeded the 6-year period (and does not qualify for one year extensions).  As always, an attorney should be consulted.

The H-1B Cap

The H-1B cap is a limit of how many new H-1B visas can be issued each fiscal year. The H-1B cap opens on April 1 each year.  The general limit is currently 65,000.  There is a separate cap, which is currently 20,000, for those who have a master’s degree or higher from a U.S. institution of higher education.

People already in H-1B status are not affected by these caps.  So, it does not apply to any of the following situations:

1.  Extending the amount of time a current H-1B worker may remain in the United States

2.  Changing the terms of employment for current H-1B workers

3.  Current H-1B workers wishing to change employers

4.  Current H-1B workers wishing to work concurrently in a second H-1B position

Further, nationals of Singapore and Chile count towards a separate cap of 6,800 (5,400 for Singapore and 1,400 for Chile). 

Also, doctors working in underserved communities as a result of receiving a J-1 home residency requirement waiver sponsored by a state or federal agency are also exempt from the annual cap.

Lastly, if the alien will be employed at an institution of higher education, a related or affiliated nonprofit entity, a nonprofit research organization or a governmental research organization, these H-1B petitions are exempt from the caps.

Rehan Alimohammad is an Attorney and CPA.  Our office handles all immigration law issues and tax law. Please visit our website at www.attorneyrehan.com, or call our offices at (281) 340-2074 or (800) 814-3920.

Disclaimer:  This article is not meant as specific advice regarding a person’s individual case.  An attorney should be consulted.  This article does not create an Attorney-Client relationship.