I-9 Compliance During Mergers and Acquisitions


Pic.jpgU.S. Immigration and Customs Enforcement (ICE) continues to increase its Form I-9 (employment e ligibility verification) enforcement activities with more than 100 arrests in the first two weeks of 2013.  In 2012, ICE initiated more I-9 audits, increased its investigations, imposed more fines, and made more arrests than it has in four years. 

In the midst of a corporate merger or acquisition, companies can take certain steps to protect themselves from such penalties, and from inheriting the employment eligibility verification mistakes of former employers.

A new “employer” is created on the effective date of a merger or acquisition according to the Department of Homeland Security (DHS).  The new employer may choose to treat all employees as:  1). Continuing in their employment by retaining the previously completed Forms I-9; or 2). New hires by completing new Forms I-9 for all of these employees.

When the new employer chooses to keep old forms, the company is exposed to liability created by the I-9 errors of the previous employer.  If ICE initiates an I-9 audit, the employer may be exposed to monetary fines that range from $110 to $16,000 per violation.  Moreover, prison time may be imposed for managers and executives determined to have knowingly employed, or conspired to employ, unauthorized workers.

Compliance is required immediately; no grace period exists for new employers formed as a result of mergers and acquisitions.  ICE’s targeted industries include, among others:  health care, energy, critical food, agriculture employers, water treatment, high-profile restaurants, and nuclear reactors.

A complete audit of all employers’ Forms I-9 is the most effective way to avoid liability.  In the event of a merger or acquisition, the new employer should complete new Forms I-9 with legal counsel.

The publications contained in this site do not constitute legal advice. Legal advice can only be given with knowledge of the client's specific facts. By putting these publications on our website we do not intend to create a lawyer-client relationship with the user. Materials may not reflect the most current legal developments, verdicts or settlements. This information should in no way be taken as an indication of future results.

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