In January, we wrote about how an organization can stay I-9 compliant before and after the merger and acquisition process. Our network of immigration attorney partners provided us with insight to a step-by-step guide on how to ensure a smooth transition process for a Buyer during an M&A process. Many of our readers were really excited but also wanted to read about a Seller’s perspective as well. Today’s article offers just that! In today’s economy, we’ve seen many companies restructure and announce layoffs. Some companies are probably considering an outright acquisition as a means of survival (and exit strategy). You’ve probably already read about them in the news. (I know I have.) For companies who are preparing for a buyout, getting your Forms I-9 compliant with the law helps to reduce overall liabilities (and hopefully leverage a higher acquisition price). At the very least, an I-9 Compliance Policy will help to lower your risk of fines and penalties from the government. Would-Be Sellers should understand the following when grooming their organizations for a future sale:
Reconnoiter the I-9 Landscape
If you don’t know what you’re up against, you’ll easily be blindsided. You’ll need to conduct some due diligence to understand what the existing I-9 process is to assess areas that need compliance (if any).
1. Counting Papers – The exact number of Forms I-9 vis-à-vis the organization’s current number of employees are important numbers to keep handy.
2. Identify the Players - How many authorized representatives are completing Forms I-9 on your organization’s behalf? What about Section 3 for re-verification purposes? Is it just at headquarters or do you have many individuals at multiple worksite locations? What type of training do these individuals receive?
3. Storage Options – If your company has migrated to an electronic I-9 solution that contained the necessary security and record keeping controls that are compliant with government regulations, than this process will be easy. (Not sure? Then read this and this too.) If your organization is still completing Forms I-9 by pen and paper, how are the documents being physically stored? In one central location or at multiple worksites? In a secure location?
4. Purging Rituals – How often are Forms I-9 purged (if at all)? By whom? Who manages this process to ensure it is completed?
5. Existing Policy – Understanding the existing policy for maintaining Forms I-9 is important to determine if any changes need to be made.
Prepare for Battle
Pre I-9 audit planning is very important. The internal audit procedures that will follow should evaluate actual Forms I-9 to determine what types of errors have been made. You’ll have to consider the following:
6. Who will spearhead this project? Who will assist? Will there be a dedicated team?
7. How many hours will be devoted to this project? Where will the audit take place? How will data be documented?
8. How should outside counsel assist in your situation? Will they simply provide sample policies or craft a strategy that is tailored to your organization?
Ready. Set. Charge!
The actual internal audit (aka soft audit) will vary depending on your organization’s specific situation. The purpose of the audit is to determine error types, error rates and patterns of compliant and non-compliant practices. Because of the complexity of I-9 rules and regulations, this is where most employers bring in attorney experts. They are in the best position to provide updated compliance information as well as offer attorney-client privileged advice.
Assessing the Casualties
Attorney experts can provide an assessment for potential risks and/or penalties. Any non-compliant patterns of practices that emerge should be actively remedied according to your organization’s resources and circumstances. Your counselor can also provide you with the nitty gritty details (who, what, when, where and how) to successfully implement your remediation plan and adopt a compliance culture moving forward.
Regrouping for a Peaceful Exit
Armed with a report card on your organization’s Form I-9 compliance and concrete plans to implement an I-9 compliance strategy, you are now ready to add this piece to your organization’s resume. Should a Buyer come knocking on your door, you already know where you stand on I-9 compliance and can happily check that important (and often overlooked) detail off your due diligence list.
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