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The Importance of Verifying Employment Status

Nov 1, 2019

Meredith Brown and Kristen Whelan from ADP join Tim Schuster and discuss the importance of hiring employees who can legally work in the United States.

Meredith Brown can be reached at 

Kristen Whelan can be reached at


Tim Schuster: Hello, and welcome to a special edition of “The Bottom Line.” This podcast examines the everyday business and finance issues faced by closely held and private businesses. We hope to provide you with news you can use in what we like to think of as a jargon-free zone. I'm your host Tim Schuster and with us today is a special guest, Meredith Brown, a PEO advisor, and Kristen Whelan, a human capital management consultant from ADP. Today we'll discuss with Meredith and Kristen the importance of verifying employment status. Welcome Kristen and Meredith.

Meredith Brown: Hey Tim.
Kristen Whelan: Hi Tim.

Tim Schuster: So I wanted to start by informing our listeners how this podcast came to light. Recently I've heard that The Department of Homeland Security has arrived at a certain company's locations and informed the owners that Homeland Security was aware of employees who currently work at said company who are not legally allowed to work in the United States. The penalties for noncompliance can be completely egregious. I would love to inform our listeners of the proper documentation to collect and proper way to onboard employees. Kristen?
Kristen Whelan: Thanks, Tim. Unfortunately, we see these scenarios become more widespread across all industries, so it's crucial that companies start being more proactive and reviewing their current HR processes. While we do not provide legal advice, we do support our clients and offer best practices and a new-hire checklist to ensure companies are meeting the minimum requirements as regulations change. I am seeing many organizations move to a paperless onboarding experience for their new hires, which not only helps ensure all proper new hire documentation is being completed, but it also gives the payroll or HR administrators a way to keep track of what's missing, and it also leaves an audit trail and record of the documentation in the event they are audited. Here are some examples I'd like to share, documents to be collected, and some items to consider, including a new-hire checklist during an onboarding process of a new employee.
Tim Schuster: Awesome. I would love to hear it.
Kristen Whelan:Great. So the first one that I'm going to start with is the I-9 checklist. For those who might not be familiar with a checklist such as this, it provides a step-by-step overview for completing and maintaining the I-9 nine. Section one of the form must be completed on or before the first day of work, but after the employee accepts employment with the employer. Section two of the form must be completed within three business days of the date employment begins. Employers may be assessed civil penalties for hiring or continuing to employ unauthorized aliens. So failing to comply with Form I-9 requirements or not requiring identification at the time of hire could be a big issue.
Tim Schuster: That's a scary proposition. So what are the next things on the list?
Kristen Whelan: It is scary, and honestly, failure to properly complete and maintain the I-9 may result in civil and criminal penalties. So next, it's important to keep in mind that some jurisdictions use E-Verify, which is an online system for determining new hires eligibility to work in the U S. There's a lot of ways nowadays that some providers do give the ability during the onboarding process for them to manage that process electronically.
Tim Schuster: That's fantastic.
Kristen Whelan: Another area that I'm seeing some of my clients roll out is an orientation checklist. This checklist can be used to help ensure that important issues have been addressed with each new hire, including your review of company policies and procedures, maybe the employee handbook, wages, and benefits being offered in any required new-hire paperwork. And to take that checklist a step further, you would think of the orientation package. So this package contains some of the new- hire paperwork. So, for example, the orientation checklist that I just mentioned, the emergency contact form, a receipt of company property. So if you're giving out a computer or a mobile phone, etc., and a direct deposit authorization, also included are the required form for W-4, which is the federal form I-9 that we just talked about for the employment eligibility and verification form and, of course, can't forget the notice of coverage options.
Tim Schuster: Very important, actually.
Kristen Whelan: Yes. And last, but not least, is a seller salary and benefits checklist for new employees. You can use this checklist to make sure you have covered all the main points regarding salary and benefits enrollment for new employees.
Tim Schuster: Kristen, that's a fantastic list. So if a client or a customer thinks that they might have a compliance issue with this, what are the steps that they should take?
Kristen Whelan: I'd suggest they contact their attorney or trusted advisors, such as EisnerAmper, who can make recommendations of providers who are industry experts in these areas and can consult with them to address any gaps and areas for improvement. I think it's important to note, though, that when federal state and local laws conflict, the one most generous to the employee generally applies. The laws, as we all know, are constantly changing. Think of paid sick leave overtime rules, salary bands, in addition to the DOL, and the example you provided earlier of the Homeland Security cracking down. So it's more important than ever for business owners to see HR compliance as a requirement, because it has a serious impact on their bottom line if they are fined or receive an employee lawsuit.
Tim Schuster: Meredith, what can my clients do if they need help with this process?
Meredith Brown: There are many ways to help clients who might have these compliance issues today. First, there are a lot of options now through payroll and HR technology where onboarding can be streamlined electronically. And a lot of those ways are ways that Kristen mentioned earlier. So I'd recommend employers explore those types of options. Another way would be through the PEO model, which stands for Professional Employer Organization. For those who do not know, PEOs shoulder the burden of many non-core administrative activities from payroll to benefits administration, and they're going to enable clients to focus more time on their organization's core competencies. Further, PEOs that are more sophisticated provide expertise to their clients with strategic HR decisions and are inclusive of many benefits.
Tim Schuster: That's fantastic. Well, Meredith, this is a really interesting subject because I had a topic on one of my podcasts that was about these services and especially in the PEO realm. What are the steps that you can take with this?
Meredith Brown: There is access to a variety of employee benefits solutions to attract and retain talent. There's mitigation of certain employment-related risks through shared responsibility arrangements like this, and there's a ton of scalable technology and infrastructure as well as employee-related cost stability. PEOs can also help clients stabilize the cost of their labor burden and focus on improving the bottom line by assisting with routine administrative tasks and relate to compliance requirements. A PEO is going to allow its clients to focus more time and resources on those core competencies. Of course, ADP has a PEO offering called ADP Total Source, and if someone would like to know more about it, they can contact me. Meredith Brown.
Tim Schuster: Fantastic. Meredith, Kristen, thank you so much for this useful information. Before we close out our podcast, I like to typically provide one of my famous historical fun facts. But for this podcast, Kristen has her own historical fun fact.
Meredith Brown: Typically, you gave a fact about New Jersey, but this one I think is too good to pass up. The largest landowner of Nevada isn't actually the state itself. It's the federal government. 80% of the land in Nevada is owned by the U.S. government.
Tim Schuster: That’s interesting. Thank you for listening to “The Bottom Line” as part of the EisnerAmper podcast series. If you have any questions or there's a topic you'd like us to cover, email us at Visit for more information on this and a host of other topics. And join us for our next EisnerAmper podcast, when we get down to business.

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Timothy Schuster

Mr. Schuster is a Senior Manager providing tax compliance services to individual filers, as well as assistance on tax returns for companies in the manufacturing and real estate industries.

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