Many employers often ask what to do, with respect to I-9 compliance, when their company acquires another company (and its employees). Does the employer have to complete new I-9 Forms for these employees? Employers who have acquired another company or have merged with another company have two options:
Option A: Treat all acquired employees as new hires and complete a new Form I-9 for each and every individual irrespective of when that employee was originally hired. Enter the effective date of acquisition or merger as the date the employee began employment in Section 2 of the new Form I-9; or
Option B: Treat acquired individuals as employees who are continuing in their uninterrupted employment status and retain the previous owner’s Forms I-9 for each acquired employee. Note that you (as the new employer) will be liable for any errors or omissions on the previously completed Forms I-9.
Please remember that employees hired on or before November 6, 1986, who are continuing in their employment and have a reasonable expectation of employment at all times, are exempt from completing Form I-9 and cannot be verified in E-Verify. For making this determination, see 8 CFR 274a.2(b)(1)(B)(viii) and 8 CFR 274a.7. If you determine that an employee hired on or before November 6, 1986 is not continuing in his or her employment or does not have a reasonable expectation of employment at all times, the employee may be required to complete a Form I-9.
If you choose to complete new Forms I-9 (Option A), in order to ensure that you do not engage in discrimination, you must do so for all of your acquired employees, without regard to actual or perceived citizenship status or national origin.
Please note that federal contractors with the FAR E-Verify clause have special rules relating to the verification of existing employees. For more information, see the E-Verify Supplemental Guide for Federal Contractors at www.uscis.gov/E-Verify.
Mergers and acquisitions is a complicated area of the law and determining whether or not employees are continuing in their employment with the new entity for Form I-9 purposes is often not clear. Therefore, the USCIS strongly recommends that any business confronted with this issue should consider retaining private legal counsel. For more information, please review the IRS notice at: http://www.irs.gov/pub/irs-drop/n-11-28.pdf
For additional information on Employment or Labor Law issues, please contact TAMMY MEADE ENSSLIN at 859-963-9049.
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