HR Alerts For December 2016
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New I-9 Form Released
The new I-9 form was released November 14. It may now be used, although the old form will remain valid through January 21, 2017. After that date, you must use the new form. We recommend you train all employees who are responsible for completing the I-9 and start to use it for new hires as soon as possible.
A few important notes about this new form:
- While the new I-9 is intended to be completed as a fillable PDF to reduce errors, it should not be confused with an electronic I-9. An employer must still print the completed I-9, obtain the appropriate signatures (which are not fillable via PDF), monitor re-verifications, and retain the form for the proper retention period. Employers and employees may choose to complete any or all of the form by typing into the fillable PDF or using a pen to fill out sections after the document has been printed. Documents that are partly printed and partly handwritten are acceptable. If using an electronic version of the I-9, employers must still comply with the U.S. Citizenship and Immigration Services’ criteria to be certain of the integrity of the electronic system.
- Do not re-verify current employees with the new form. Use the new I-9 only for newly hired employees and when you are required to re-verify temporary work authorization. Additionally, all previous forms must still be retained for the proper retention period. The form must be retained for as long as the employee works for you, plus three years after their hire date or one year after their termination date, whichever is later.
- To download the form from the USCIS website (uscis.gov/i-9), right click on the link to the new form—“Form I-9 (PDF, 535 KB)” – and select the “Save link as” option. This will allow you to save the PDF and open it in a PDF reader. Clicking to open it in a web browser (as you would with most links) will result in an error page.
Notable changes to the form itself include the following:
- When completed electronically, there are prompts to ensure information is entered correctly. For example, the form will validate that the correct number of digits are entered for an employee’s Social Security number and various expiration dates. Calendars and drop-down lists also include electronic assistance.
- The form includes on-screen instructions for each field as well as easy access to the full instructions.
- In Section 1, employees must only provide other last names used, as opposed to all other names used.
- Below an employee’s signature line, they must indicate via checkbox whether a Preparer and/or Translator was used to complete Section 1. Multiple preparers/translators can now be entered into Section 1 if needed.
- There is a dedicated area for including additional information (when required) rather than having to add it in the margins.
- In Section 2, employers will find a new “Citizenship/Immigration Status” field in the first line with numbers one through four. These numbers correlate directly to the employee’s selected citizenship or immigration status entered in Section 1. If you use the fillable version of the form, the corresponding digit will pre-populate. If you use a paper version, enter the corresponding digit in this field. These fields (the top line of Section 2) help to ensure that the two pages of an employee’s Form I-9 remain together.
The USCIS has yet to release a new Handbook for Employers (M-274) and advises employers to follow the new form instructions for the most up-to-date information. The updated instructions are also available for download on uscis.gov/i-9.
Federal Overtime Rules On Hold
On November 22, a federal judge for the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction on the Department of Labor’s new overtime rules, which were slated to go into effect on December 1, 2016. The judge ruled that the Department of Labor (DOL) likely overstepped its rulemaking authority by raising the salary threshold as high as it did and by implementing the automatic increase every three years.
What this means now:
- The effective date of the rules has been delayed indefinitely.
- Employers may choose not to implement the changes they had planned for Dec. 1 compliance.
- The new rules have not been thrown out or invalidated – at least not yet.
The judge has not made a final ruling in the case, but the fact that he issued the injunction suggests that he is leaning in favor of the groups that want to stop the rule changes. It is also possible that his final decision will allow some parts of the rule to stand but not others. The DOL has indicated that in the meantime they are considering their legal options with respect to the preliminary injunction.
Employers are obviously wondering whether they should move forward with the changes they have been planning. Unfortunately, this is a difficult question to answer and ultimately a business decision, which is much harder than a compliance decision.
Although employers are not required to make changes, they may want to consider the following:
- Will it hurt the bottom line to make the changes? If so, how much?
- Will it be difficult to undo changes that have already been made?
- How will employees feel about the decision? Did they like the changes? Hate the changes?
- Is the new pay structure better than what is in place now?
- If the changes aren’t implemented now, will it be possible to make them on short notice in the future?
At this point, we do not know how long the injunction will be in place or if the rules will be thrown out entirely. We will be keeping an extremely close eye on this case and will issue further alerts when actionable information is made available.
IRS Extends Due Date to Distribute ACA Form 1095-C / Form 1095-B to Employees
The IRS has extended the deadline for applicable large employers (those with 50 or more full-time or full-time equivalent employees) to distribute Form 1095-C to employees from January 31, 2017 to March 2, 2017. The extension also applies to small employers with self-funded plans, who now have until March 2 to distribute Form 1095-B to employees.
The distribution of this form is one part of the reporting requirements under the Affordable Care Act for employers who are subject to the Employer Mandate. The additional 30 days gives employers more time to gather the relevant information and prepare the forms.
This extension applies only to the forms distributed to individuals. Employers must still file the 2016 Forms 1094-B and 1095-B (for small employers with self-funded plans) or Forms 1094-C and 1095-C (for applicable large employers) with the IRS by February 28, 2017, for paper filing, or March 31, 2017, if filing electronically. Employers with fewer than 50 full-time or full-time equivalent employees are not subject to these reporting requirements or to the ACA mandate itself.
The IRS has also extended “Good Faith Transition Relief” to the 2016 reporting year. Employers who can show they made good faith efforts to comply with the information-reporting requirements will not be penalized for incorrect or incomplete information reported for the 2016 tax year.