Monday, April 15, 2013

TIP: I-9 & COBRA Can Bite You for Incomplete Paperwork

Irked about the new Form I-9? Want to avoid the sting of COBRA non-compliance?

It's better to fill out than pay up - and here's why:

Form I-9 Regs

The Immigration Reform and Control Act (IRCA) of 1986 requires all employers to verify a new hire's authorization to work in the United States by completing Form I-9. Section 1 of the I-9 must be completed on the employee's first day of work for pay, and Section 2 must be completed within 3 business days of the employee's first day of work.

The I-9 form is comprised of 8 pages of instruction, making it a heavy enough load to intimidate new hires from filling it out, so employers might not get it back from them at all. Yet, because it is the responsibility of employers to complete and retain the form, you can potentially suffer a penalty of $110 per day, dating back to the period the forms should have been completed.

Let's put this in context. If you didn't get and retain the I-9 from a hire, say, 2 years ago, and you were audited by the Immigration and Customs Enforcement (ICE), you might be liable for anywhere up to $80,300 in fines. Believe it or not, there are real cases of companies being fined more than $1 million dollars.

Don't Let COBRA Bite You!

Employers can also potentially meet similar circumstances with the Consolidated Omnibus Budget Reconciliation Act (COBRA), the law giving certain workers and their families who lose their health benefits the right to choose to continue their group health plan for limited period of time. Employers that fail to offer the benefits of COBRA in a timely manner can be hit with an excise tax of up to $200 per day - even more than the I-9 penalty.

Fear not, however. All that is needed is an Offer of Insurance letter and proof that the former employee either accepted or declined it. It's amazing how many headaches the price of one stamp can prevent!

Do What You Do Best, and Let Benay Do the Rest!

Our job at Benay is to handle all of these back-office issues for employers.

We make sure that our clients have their new employees fill out the new I-9 forms, which were published as of March 8, 2013, and ensure they are being used by May 7, 2013. Additionally, we retain these records on behalf of our clients for the period required by ICE. 

We also take care of all COBRA letters and documentation for our client's former employees, making sure nothing slips through the cracks.

Benay does all of the behind-the-scenes documentation, filing, and more. If you'd like to spend more time growing your business and less time managing your back office, give us a call.

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