DOJ Antitrust Enforcement Actions Signal Need to Audit Adequacy of Employment, Ethics & Internal Controls Policies & Practices To Minimize Rising DOJ & Other Antitrust Exposures

April 23, 2009

U.S. businesses should review the adequacy of their existing antitrust Federal Sentencing Guidance Compliance policies and internal controls in light of a series of recently announced antitrust enforcement actions recently announced by the Department of Justice (“DOJ”).  U.S. and other businesses and their employees and agents who engage in prohibited antitrust activities face substantial criminal and civil penalties in actions brought by the DOJ, civil judgments brought by private plaintiffs, or both.  To effectively manage these exposures, businesses and leadership must ensure that their organization has in place appropriate employment, corporate ethics and internal controls and procedures for preventing, investigating and redressing potential violations.  The management and discipline of employees and other service providers that violate these and other compliance policies is an increasingly important responsibility of human resources and other management leaders.

 

On Monday (April 20, 2009), DOJ announced that two subsidiaries of the Swedish company Trelleborg AB, one based in Virginia and the other in France, have agreed to plead guilty and pay a total of $11 million in criminal fines for participating in separate conspiracies affecting the sales of marine products sold in the United States and elsewhere.  The plea agreements are among at least 9 major antitrust enforcement actions announced by the DOJ since the first of the year, including the longest sentence yet imposed for an antitrust criminal conviction.

 

Trelleborg Engineered Products Inc. &

Trelleborg Industries S.A.S. Plea Agreements

The plea agreement resolves a two-count felony charge filed in U.S. District Court in Norfolk, Va., against Virginia Harbor Services Inc., formerly known as Trelleborg Engineered Products Inc. (VHS/TEPI), a manufacturer of foam-filled marine fenders, buoys and plastic marine pilings headquartered in Clearbrook, Va.  Foam-filled marine fenders are used as a cushion between ships and either fixed structures, such as docks or piers, or floating structures, such as other ships. Foam-filled buoys are used in a variety of applications, including as channel markers and navigational aids. Plastic marine pilings are substitutes for traditional wood timber pilings and are often used in port and pier construction projects in conjunction with foam-filled fenders. According to the charges, VHS/TEPI participated in a conspiracy between December 2002 and August 2005 to allocate customers and rig bids for contracts to sell foam-filled marine fenders and buoys, and also participated in a separate conspiracy between December 2002 and May 2003 to allocate customers and rig bids for contracts to sell plastic marine pilings. Under the terms of the plea agreement, which is subject to court approval, VHS/TEPI has agreed to pay a $7.5 million criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation. To date, six individuals and two corporations have pleaded guilty or agreed to plead guilty in the Antitrust Division’s ongoing investigation of fraud and collusion in the marine fenders and pilings industries.

 

In addition, a one-count felony charge was filed today in U.S. District Court in Fort Lauderdale, Fla., against Trelleborg Industries S.A.S. (TISAS), a manufacturer of marine hose headquartered in Clermont-Ferrand, France. TISAS is charged with participating in a conspiracy from at least as early as 1999 and continuing until as late as May 2, 2007, to allocate market shares, fix prices and rig bids for contracts to sell marine hose to purchasers in the United States and elsewhere. Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities. Under the terms of the plea agreement, which is subject to court approval, TISAS has agreed to pay a $3.5 million criminal fine and to cooperate fully in the Department’s ongoing antitrust investigation. To date, three corporations have pleaded guilty or agreed to plead guilty in the Antitrust Division’s ongoing investigation in the marine hose industry. Twelve individuals have also been charged to date, nine of whom have pleaded guilty.

 

The plea agreements announced this week are part of a continuing DOJ investigation, which already lead to five former executives of TISAS and VHS/TEPI entering guilty pleas to participating in the conspiracies charged. Former VHS/TEPI president Robert B. Taylor was sentenced in January 2008 to serve 24 months in prison and pay a $300,000 criminal fine. Former VHS/TEPI chief financial officer Donald L. Murray was sentenced in March 2008 to serve 18 months in prison and pay a $75,000 criminal fine. William Alan Potts, a former vice president of VHS/TEPI, was sentenced in June 2008 to serve six months in prison and six months in home detention, and to pay a $60,000 criminal fine. Former TISAS executives Christian Caleca and Jacques Cognard were each sentenced in December 2007 to serve 14 months in prison and to pay criminal fines of $75,000 and $100,000, respectively.

 

Other Recent Antitrust Enforcement Activities

The plea agreements announced this week are the latest in a series of antitrust enforcement actions recently taken by the DOJ.  Since the first of the year alone, DOJ also has announced a series of other major antitrust enforcement actions, including, for instance:

 

On April 9, 2009, DOJ announced that Cargolux Airlines International S.A., Nippon Cargo Airlines Co. Ltd. and Asiana Airlines Inc. plead guilty and agreed to pay a total of $214 million in criminal fines to settle price fixing charges.

  • On March 31, a San Francisco federal grand jury indicted Hitachi Displays Ltd. executive Sakae Someya with conspiring with unnamed co-conspirators to suppress and eliminate competition by fixing the price of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels sold to Dell Inc. for use in notebook computers.  With this indictment, four companies and eight individuals have been charged in the Department’s ongoing antitrust investigation into the TFT-LCD industry and more than $585 million in fines have been imposed as a result.
  • On March 10, Somey’s employer, Japanese electronics manufacturer Hitachi Displays Ltd., agreed to plead guilty and pay a $31 million fine for its role in a conspiracy to fix prices in the sale of TFT-LCD panels sold to Dell Inc.
  • On February 10, 2009, a federal grand jury in San Francisco indicted former Chairman and Chief Executive Officer of Chunghwa Picture Tubes Ltd. with conspiring with others to suppress and eliminate competition by fixing prices, reducing output and allocating market shares of color display tubes (CDTs) to be sold in the U.S. and elsewhere.  The indictment also charges C.Y. Lin with conspiring with others to suppress and eliminate competition by fixing prices for color picture tubes (CPTs) to be sold in the U.S. and elsewhere.
  • On February 3, 2009, a San Francisco federal grand jury indicted two former executives from Chunghwa Picture Tubes Ltd. (Chunghwa) and one former executive from LG Display Co. Ltd. (LG) for participation in a global conspiracy to fix prices of Thin Film Transistor-Liquid Crystal Display (TFT-LCD) panels.
  • On January 1, 2009, former high-level shipping executive Peter Baci was sentenced to serve the longest jail sentence ever imposed for a single antitrust charge, 48 months in jail, and to pay a $20,000 criminal fine for his role in an antitrust conspiracy involving the transportation of goods to and from the continental United States and Puerto Rico by ocean vessel by agreeing to allocate customers, agreeing to rig bids submitted to government and commercial buyers, and agreeing to fix the prices of rates, surcharges, and other fees charged to customers. Related antitrust charges remain pending in the U.S. District Court in Jacksonville against three other shipping executives: R. Kevin Gill and Gregory Glova, of Charlotte, N.C. and Gabriel Serra, of San Juan, Puerto Rico. A related obstruction of justice charge is also pending against a fifth shipping executive, Alexander Chisholm, of Jacksonville. 
  • On January 22, 2009, three air cargo carriers, LAN Cargo S.A. (LAN Cargo), Aerolinhas Brasileiras S.A. (ABSA), and EL AL Israel Airlines Ltd. (EL AL), plead guilty and agreed to pay criminal fines totaling $124.7 million for their roles in a conspiracy to fix prices in the air cargo industry, the Department of Justice announced today. Under the plea agreements, LAN Cargo, a Chilean company, and ABSA, a Brazilian company that is substantially owned by LAN Cargo, have agreed to pay a single criminal fine of $109 million. EL AL, an Israeli company, has agreed to pay a criminal fine of $15.7 million. According to the charges against the airlines, each airline engaged in a conspiracy in the United States and elsewhere to eliminate competition by fixing the cargo rates charged to customers for international air shipment.
  • Under a plea agreement announced January 15, 2009, Chang Suk “C.S.” Chung, a Korean LG executive, Chieng-Hon “Frank” Lin, a Taiwanese former executive from Chunghwa, and Chih-Chun “C.C.” Liu and Hsueh-Lung “Brian” Lee, Taiwanese current employees of Chungwha, agreed to serve a term of imprisonment, pay a criminal fine and assist the government in its ongoing TFT-LCD investigation.  

Businesses & Business Leaders Must Have

Effective Internal Controls & Compliance Practices

These DOJ actions and a host of others in recent years document provide examples of DOJ’s willingness to investigate and prosecute price-fixing, bid-rigging and other antitrust violations.  The felony penalties associated with federal antitrust violations bring antitrust sanctions within the purview of the Federal Sentencing Guidelines.  As a result, businesses that fail to take adequate steps to prevent or redress antitrust violations risk vicarious liability for violations committed but their employees or agents.  Furthermore, business leaders investigating suspected violations must exercise caution to appropriately investigate and redress alleged or suspected violations to both protect themselves and their organization against liability based on allegations of endorsement by tolerance, potential cover up or other misconduct in connection with the investigation and redress process. At the same time, timely investigation, oversight and redress can substantially mitigate these liability exposures under the Federal Sentencing Guidelines.  Accordingly, to prevent and position themselves and their organizations to defend against potential antitrust complaints, businesses and businesses leaders should both adopt appropriate policies prohibiting their organizations and its employees and agents from engaging in price-fixing, bid rigging and other anticompetitive practices prohibited by federal or state antitrust laws, as well as establish and administer well-documented training and oversight practices to prevent, detect and redress potential or attempted violations of these policies.

 

To effectively manage these exposures, businesses and leadership must ensure that their organization has in place appropriate procedures for preventing, investigating and redressing potential violations.  Among other things, businesses and their leaders should be certain their organization: 

  • Has up to date policies in place and a process to monitor regulatory and enforcement developments for necessary updates;
  • Can demonstrate that it is appropriately administering well-documented audit, training and enforcement practices to prevent and redress potential violations as part of its corporate ethics and human resources practices;
  • Uses appropriate vendor selection, contracting, audit and oversight processes to promote compliance by business partners, agents and others with which it does business;
  • Has identified experienced counsel and developed a process for engaging counsel to assist in the audit of ongoing compliance efforts as well as the timely conduct of internal investigations of possible infractions within the scope of attorney-client privilege;
  • Designated an ethics or compliance officer, or other appropriate party to receive and investigate suspected compliance concerns and reports;
  • Has effective privacy, investigations, employment and other policies and procedures to enable the business to investigate, discipline and defend employment actions against employees or other workers for improper conduct;
  • Has appropriate processes and procedures for responding to government investigations and private compliance complaints; and
  • Promptly investigates and responds to reports of infractions or other compliance concerns in an appropriate and well documented manner.

 

Curren Tomko and Tarski LLP and its attorneys have significant experience assisting businesses and business leaders to establish, administer, enforce and defend antitrust and other compliance and internal control policies and practices to reduce risk under federal and state antitrust and other laws covered by the Federal Sentencing Guidelines.  If you need assistance with these or other compliance concerns, wish to inquire about arranging for compliance audit or training, or need legal representation on other matters please contact Cynthia Marcotte Stamer, CTT Labor & Employment Section Chair, at cstamer@cttlegal.com, 214.270.2402; Edwin J. Tomko, CTT White Collar Crime Section Chair, at etomko@cttlegal.com, 214 270-1405 or any of the other following members of the Curren Tomko Tarski LLP team experienced in these and other internal controls matters.

 

 

 

For additional information about the experience and services of Ms. Stamer and other members of the Curren Tomko Tarksi, LLP team, see the Curren Tomko Tarski Website or Cynthia Marcotte Stamer, P.C. Website.

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources at CynthiaStamer.com.  For additional information about Ms. Stamer and her experience, see CynthiaStamer.com or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com or registering to receive these Solutions Law Press HR & Benefits Update at the above link.

 

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Posted by Cynthia Marcotte Stamer

Military Leave Differential Payments Subject To Income Tax, Not FICA or FUTA

April 17, 2009

Employers that pay differential pay to employees absent on active duty military leave job must withhold income tax, but need not withhold or pay Federal Insurance Contributions Act (“FICA”) or Federal Unemployment Tax Act (“FUTA”) taxes on those payments, according to an Internal Revenue Service (IRS) ruling to be published May 4, 2009.

According to Revenue Ruling 2009-11, employers must withhold income tax and include military duty differential pay in wages reported on the recipient employee’s Form W-2. It also states employers may use the aggregate procedure or optional flat rate withholding to calculate the amount of income taxes required to be withheld on these payments.

Proper tax withholding and reporting is one of the expanding responsibilities that employers must juggle when a member of their workforce is a current or former members of the military and their family members including, for example, federal and state military leave mandates and new military caregiver and other family leave requirements for family members of members of the military that took effect during the past year. Employers should review their employment and employee benefit practices to confirm they are up to date with these expanded requirements.

Cynthia Marcotte Stamer and other members of Curren Tomko and Tarski LLP are experienced with advising and assisting employers with these and other labor and employment, employee benefit, compensation, and internal controls matters. If your organization needs assistance with assessing, managing or defending its wage and hour or other labor and employment, compensation or benefit practices, please contact Ms. Stamer at e-mail, (214) 270-2402; or your favorite Curren Tomko Tarski, LLP attorney.  For additional information about the experience and services of Ms. Stamer and other members of the Curren Tomko Tarksi, LLP team, see the Curren Tomko Tarski Website or Cynthia Marcotte Stamer, P.C. Website.

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources at CynthiaStamer.com For additional information about Ms. Stamer and her experience, see here or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com.  If you would prefer not to receive these updates, please send a reply e-mail with “Remove” in the subject line to support@SolutionsLawyer.net. You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog here.

 

 

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Posted by Cynthia Marcotte Stamer

250 New Investigators, Renewed DOL Enforcement Emphasis Signal Rising Wage & Hour Risks For Employers

April 15, 2009

U.S. employers should audit existing wage and hour practices and documentation and take other steps to defend against the heightened emphasis on enforcement of federal wage overtime, minimum wage, child labor and other wage and hour laws announced by the U.S. Department of Labor Wage & Hour Division (WHD). In a March 5, 2009 WHD Press Release, recently appointed Obama Administration Secretary of Labor Hilda Solis announced that WHD is adding 250 new field investigators and taking other steps to strengthen its enforcement of federal minimum wage, overtime and child labor laws.  In her March 5, 2009 Press Release, Secretary Solis stated, “The addition of these 250 new field investigators, a staff increase of more than a third, will reinvigorate the work of this important agency, which has suffered a loss of experienced personnel over the last several years.”

The announced expansion of staffing comes in part in response to two reports made to Congress by the Government Accounting Office (GAO) over the past year, which were highly critical of the enforcement activities of the WHD under the Bush Administration.  In a 2009 GAO Report To Congress released March 25, 2009, the GAO reported that a recent GAO audit of WHD enforcement found that sluggish response times, a poor complaint intake process, and failed conciliation attempts, among other problems left workers vulnerable to wage theft.  The 2009 Report followed up on a 2008 GAO Report To Congress that case studies showed that WHD inadequately investigated minimum wage and overtime complaints by inappropriately rejecting complaints based on incorrect information provided by employers, failing to make adequate attempts to locate employers, not thoroughly investigating and resolving complaints,  and delaying initiating investigations for over a year and then dropping the complaint because the statute of limitations for assessing back wages was close to expiring.

The continuing emphasis of the DOL upon FLSA enforcement, coupled with the growth in FLSA enforcement actions by private plaintiffs, provides an important warning to employers of low wage workers specifically, as well as employers generally, of the importance of being prepared to defend their worker classification and overtime practices against DOL and/or private litigant investigations.  When it updated its regulations governing the classification of workers as exempt versus non-exempt under the FLSA in 2004, the DOL urged employers to review and update their worker classification and overtime practices to comply with the updated regulations.  At the same time, the DOL announced its intention to vigorously enforce its FLSA regulations against employers failing to adhere to these updated rules.  Despite these widely publicized compliance efforts, DOL studies of employer compliance with overtime rules continue to reflect that 50 percent of employers are not in compliance with these mandates. Therefore, in addition to adjusting existing rates of pay to comply with the increased minimum wage, employers also should:

Audit overtime pay practices to verify they comply with applicable federal and state requirements,

Review workers classified as exempt employees and/or non-employee contractors in light of the FLSA and applicable state wage and hour laws to assess the sustainability of these characterizations against a legal challenge; and

Audit the adequacy of current practices for tracking and documenting time worked by non-exempt workers in light of the FLSA and applicable state wage and hour laws.

 

Employers are cautioned to keep in mind that employers generally bear the burden of proving that their existing worker classification, wage and overtime practices meet or exceed the minimum standards imposed by the FLSA and any applicable state wage and hour law.


 

Cynthia Marcotte Stamer, and other members of Curren Tomko and Tarski LLP are experienced with assisting businesses to audit, administer and defend minimum wage, overtime and other wage and hour practices under federal and state wage and hour laws, as well as with other labor and employment, employee benefits and internal controls matters. If your organization needs assistance with assessing, managing or defending its wage and hour or other labor and employment, compensation or benefit practices, , please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402; or your favorite Curren Tomko Tarski, LLP attorney.  For additional information about the experience and services of Ms. Stamer and other members of the Curren Tomko Tarksi, LLP team, see www.cttlegal.com or CynthiaStamer.com.

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Posted by Cynthia Marcotte Stamer

New IRS’ 2009 “Dirty Dozen” Tax Scams List Invites Whistleblower Claims Against Employers, Others Engaged In Listed Transactions

April 14, 2009

The release yesterday (April 13, 2009) by the Internal Revenue Service of its 2009 “Dirty Dozen” Tax Scams List reminds businesses of the need to act to minimize exposures to tax related whistleblower or other retaliation claims by employees and other service providers that allege the potential involvement of the business in tax scams or other improper tax transactions.

 

Businesses face whistleblower, tax fraud prosecution, additional tax and penalty liability and other sanctions for involvement in tax shelters or other tax schemes.  Employees and other service provider reports to the Internal Revenue Service (IRS) are the leading means through which the IRS identifies and proves fraudulent tax activities.

 

Yesterday’s IRS announcement of its 2009 “dirty dozen” list of tax scams heightens whistleblower risks for businesses by encouraging employees and others who may have knowledge of a business or other taxpayer’s involvement in these or other prohibited tax practices to report their suspicions to the IRS and sharing instructions on how to report suspected tax fraud to the IRS as a whistleblower.  As part of these instructions, the announcement notes that “[w]histleblowers also may provide allegations of fraud to the IRS and may be eligible for a reward.”

 

The 2009 “dirty dozen” list of tax scams warns businesses about getting involved in 12 tax transactions that the IRS views as likely to create tax fraud and whistleblower risks. The tax schemes that made the 2009 Dirty Dozen List include:

  • Hiding Income Offshore
  • Filing False or Misleading Forms
  • Abuse of Charitable Organizations and Deductions
  • Return Preparer Fraud
  • Making Frivolous Arguments 
  • Making False Claims for Refund and Requests for Abatement
  • Abusive Retirement Plans
  • Disguised Corporate Ownership
  • Zero Wages
  • Misuse of Trusts
  • Fuel Tax Credit Scams

Taxpayers participating in the 2009 Dirty Dozen Tax Scams and other tax transactions listed as tax scams by the IRS risk exposure to additional taxes and penalties, prosecution for tax fraud, and potential whistleblower claims.  The Dirty Dozen list singles out for special attention some of the many tax transactions that the IRS views as tax shelters or tax fraud.  Depending on the nature of a business and its tax and compensation activities, businesses also may need to be concerned about scrutiny by the IRS for involvement in various other types of transactions that the IRS has identified as suspect. The IRS is urging U.S. businesses and other taxpayers to avoid participation in these common schemes.

 

Businesses engaged or accused of engaging in these or other transactions listed as tax scams or tax shelters by the IRS should exercise caution to confirm the appropriateness of the proposed transaction, to document their investigation of allegations of improper tax activities.  For profit and non-profit businesses should include appropriate tax compliance oversight in their internal controls and federal sentencing guideline compliance programs.  Businesses should review their activities in light of lists of IRS abusive transactions, should evaluate whether any of their transactions may be subject to scrutiny by the IRS, and take other appropriate steps to mitigate their exposure to prosecution for tax fraud, to tax related whistleblower liability and other risks.   Businesses also should exercise care when dealing with employees or service providers who make allegations that the business may be involved in improper tax activities.   Businesses also need to be prepared to demonstrate that they have not retaliated against individuals who report suspected tax fraud.  The best defense to retaliation claims is a consistent, well documented legitimate performance and discipline record.  Businesses should strengthen and consistently apply their employee performance and discipline processes to improve performance and deter whistleblower or other retaliation judgments.  As part of this process, businesses also should adopt and enforce policies requiring employees and other service providers to report suspected tax or other compliance concerns, administer documented processes for receiving and investigating allegations of potential fraud or other noncompliance, and should document their conclusions and any corrective actions in response to these investigations.

 

Cynthia Marcotte Stamer, and other members of Curren Tomko and Tarski LLP are experienced with assisting establish and administer employment, corporate compliance, internal and external fraud and other controls; to investigate potential fraud or other misconduct; to defend employment, whistleblower, Federal or state criminal or civil investigations, audits and prosecutions and to address other employment, employee benefits and corporate compliance matters.  If your organization needs assistance with assessing or managing its risk management and compliance responsibilities or liabilities under health care, employment, environmental, antitrust, securities or other federal or state laws, wishes to inquire about compliance audit or training or other services; or would like to review or engage and experience of Ms. Stamer, or other Curren Tomko Tarski LLP attorneys, please contact Ms. Stamer at cstamer@cttlegal.com, (214) 270-2402;  or see CTTLegal.com or CynthiaStamer.com.

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and access other helpful resources at CynthiaStamer.com For additional information about Ms. Stamer and her experience, see http://cynthiastamer.com/human_resources.asp or contact Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com.  If you would prefer not to receive these updates, please send a reply e-mail with “Remove” in the subject line to support@SolutionsLawyer.net. You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog at https://slphrbenefitsupdate.wordpress.com.

 

 

 

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Posted by Cynthia Marcotte Stamer

Employers Must Begin using New I-9 Form April 3, 2009; Government Contractor E-Verify Rules Take Effect May 21, 2009

April 2, 2009

 

U.S. employers must begin using the revised U.S. Citizenship and Immigration Services (USCIS) Employment Eligibility Verification Form known as the I-9 (Form I-9) on April 3, 2009.  Meanwhile, certain federal contractors and subcontractors also must prepare to comply with impending requirements to use USCIS E-Verify when hiring employees scheduled to take effect May 21, 2009.

New Form I-9

The use of the new Form I-9 is required under an interim rule published by USCIS in December 2008.  The interim rule also changes the types of acceptable identity and employment authorization documents employers can accept from new hires and prohibits employees from using expired identification documents to verify their work eligibility beginning April 3, 2009.  Employers will be required to use the new Form I-9 and to secure documentation of proof of eligibility to work in accordance with the revised rules contained in the interim rule for all new hires and to reverify any employee with expiring employment authorization in accordance with the interim regulations beginning on April 3, 2009.

Employers can download a copy of the new Form I-9 at http://www.uscis.gov/files/form/I-9_IFR_02-02-09.pdf. The interim regulations are available for review at http://edocket.access.gpo.gov/2008/E8-29874.htm.  USCIS presently is updating the Handbook for Employers, Instructions for Completing the Form I-9 (M-274). 

The new Form I-9 replaces the June 5, 2007 edition of the Form I-9 (the Old Form I-9), which will not be valid for use after April 2, 2009.  A big change in the new Form I-9 requirements is that expired documents cannot be accepted as proof of eligibility to work. All documents presented during the Form I-9 completion process now must be unexpired.  The new Form I-9 and interim regulations also add and remove certain documents to the list of documents that employers can accept of proof of identity and/or eligibility to work in the U.S.

The interim rule originally was scheduled to take effect on Feb. 2, 2009.  The Obama Administration extended the effective date to April 3, 2009 under a directive issued in January.

Federal Contractor  E-Verify Rule Scheduled To Take Effect May 21, 2009

Certain federal contractors and subcontractors also need to prepare to comply with a new federal rule that will require them to use E-Verify to verify the employment eligibility of new hires scheduled to take effect May 21, 2009.  The rule will only affect federal contractors who are awarded a new contract after May 21st that includes the Federal Acquisition Regulation (FAR) E-Verify clause.  Federal contractors may NOT use E-Verify to verify current employees until the rule becomes effective and they are awarded a contract that includes the FAR E-Verify Clause. 

The new rule implements Executive Order 12989, as amended by President George W. Bush on June 6, 2008, directing federal agencies to require that federal contractors agree to electronically verify the employment eligibility of their employees.   The amended Executive Order reinforces the policy, first announced in 1996, that the federal government does business with companies that have a legal workforce. This new rule requires federal contractors to agree, through language inserted into their federal contracts, to use E-Verify to confirm the employment eligibility of all persons hired during a contract term, and to confirm the employment eligibility of federal contractors’ current employees who perform contract services for the federal government within the United States.

Interested persons can review the final regulation and read frequently asked questions about this new rule on the internet at the following cites:

ü      Final Regulation at http://edocket.access.gpo.gov/2008/E8-26904.htm

ü      Frequently Asked Questions at http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=cb2a535e0869d110VgnVCM1000004718190aRCRD&vgnextchannel=75bce2e261405110VgnVCM1000004718190aRCRD

If you have questions or concerns about the matters discussed in this publication or other human resources, employee benefits or compensation matters, wish to obtain information about arranging for training or presentations by Ms. Stamer, wish to suggest a topic for a future program or publication, or wish to request other information or materials, please contact Ms. Stamer via telephone at (214) 270-2402 or via e-mail to Cstamer@Solutionslawyer.net. .

 

More Information

We hope that this information is useful to you. You can register to receive future updates and information about upcoming programs, access other publications by Ms. Stamer and other helpful resources or additional information about Ms. Stamer at CynthiaStamer.com or by contacting Ms. Stamer directly. If you or someone else you know would like to receive updates about developments on these and other human resources and employee benefits concerns, please be sure that we have your current contact information – including your preferred e-mail- by creating or updating your profile at CynthiaStamer.com.   You also can register to participate in the distribution of these updates by registering to participate in the Solutions Law Press HR & Benefits Update Blog at https://slphrbenefitsupdate.wordpress.com.

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Posted by Cynthia Marcotte Stamer

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