Updates to E-Verify and the “RIDE” Program Coming Your Way

On June 12, 2011, the U.S. Citizenship and Immigration Services (“USCIS”) released the latest version of the E-Verify web user interface addressing many common interface complaints its users brought up.  It should be available to all employers within six months.

The biggest addition to E-Verify is its RIDE program.  Initially, RIDE will be released as a pilot program, with only the state of Mississippi participating.  During this pilot program, Mississippi’s Department of Motor Vehicle (“DMV”) database of drivers’ licenses and permits will work side-by-side with E-verify to verify state issued documents. RIDE stands for Records and Information from DMVs for E-Verify.  The RIDE program has been implemented to detect identity fraud when an identity thief presents the documents of his victim.  In the past, USCIS had a photo-match tool for “green cards,” employment authorization documents, and passports.  However, 19 out of every 20 cases submitted to E-Verify dealt with drivers’ licenses, drivers’ permits, and state-issued identification cards.

RIDE will give employers the ability to validate drivers’ licenses, drivers’ permits, and state-issued identification cards against MVA data of Mississippi.  E-Verify sends information to MVA, which then determines if the employee matches her documentation.  The employer will not see the MVA record, only the final response given by E-Verify.  In case of a RIDE mismatch, the employee must call a USCIS status verifier and fax a copy of the document to establish identity.

Additionally, E-verify now permits an employer to list a future date as the date of hire.  In the past, E-Verify would not permit an employer to record a future date of hire in its system for fear of condoning illegal pre-screening of job candidates.  However, this tied the hands of employers when they hired employees for future start dates but wished to complete their I-9 and E-Verify cases immediately.  E-Verify has been changed to allow for the recording of hire dates up to one year in advance.

Data validation has been improved under the new E-Verify interface.  For example, in the past, employers presented with US Passport Cards or foreign passports with proper I-94 documentation would have difficulty entering the requisite nine-digit passport number into the E-Verify system because of the disparate numbering systems.  Now US Passport numbers can be between 6 and nine alpha-numeric characters, and visa numbers can be eight alpha-numeric characters.

Stay tuned for I-9 and E-Verify updates to ensure your company is properly complying with the law.

Daniel N. Ramirez is a named partner at Monty & Ramirez, LLP. He is board certified in labor and employment law by the Texas Board of Specialization and has been recognized as a Rising Star by Super Lawyers magazine.

Daniel's Contact Information:

Email: dramirez@montyramirezlaw.com

Telephone: 281.493.5529

Website: http://www.montyramirezlaw.com

How the FRICKA does an employer comply with the FCRA (“Fair Credit Reporting Act”)?

You are a prudent employer.  You want to do things the right way and ensure compliance with federal law.

The question is—are you complying with the commonly overlooked federal regulation, the Fair Credit Reporting Act, commonly referred as to the “FCRA?”  Beware: those who fail to comply face serious penalties!  If you perform background checks on your  employees or after you make a job offer to an applicant (during the post-offer, pre-employment stage) using credit reports, criminal background checks, driving records, educational records, or other types of consumer reports, you must comply with the FCRA. 

First, if you intend to conduct a background check that must comply with the FCRA, you must ask the individual to consent in writing before you perform the background check(s) you seek.

The second thing to do to ensure your compliance with the FCRA is to provide the individual with a Summary of Rights. Give this to her in person if possible, otherwise the Summary of Rights can be mailed or electronically and make sure that the font size of the Summary of Rights is 11 or more.

The third thing to do to ensure your compliance is to follow the FCRA’s requirement regarding adverse action if necessary.  When is this necessary?  The adverse action requirement is necessary if the background check you ran on the individual returns information which will require you to take adverse action against her based on the findings of the background check. 

What the "FRCA" do I do after that?  Well, this is a two-part answer.  First, give a pre-adverse action letter along with the background results you uncovered and a copy of the Summary of Rights to the individual and make sure you can prove you delivered this to the individual (e.g., signed acknowledgement confirming receipt or certified mail).  Be sure that in the letter you give the name, address, and phone number of the agency that provided the background information you relied upon to take the adverse action.  You are required to give her 5 to 7 business days to present an explanation for the results you uncovered.  Second, if the information she presents does not change your mind about her background check or if she does not respond within 7 business days, you must send post-adverse action letter confirming the adverse action taken in relation to the background check.

Don’t worry. Please call us if you have any questions associated with the background checks you are conducting with your employees to make sure you are complying with the FCRA!

Daniel N. Ramirez is a named partner at Monty & Ramirez, LLP. He is board certified in labor and employment law by the Texas Board of Specialization and has been recognized as a Rising Star by Super Lawyers magazine.

Daniel's Contact Information:

Email: dramirez@montyramirezlaw.com

Telephone: 281.493.5529

Website: http://www.montyramirezlaw.com

Dear Service Industry: Are you in compliance with the new Tip Credit requirements?

What are tip-credits?  The Fair Labor Standards Act (“FLSA”) requires employers of tipped employees to pay these employees a cash wage below the minimum wage of $7.25 per hour.  The minimum cash wage for a tipped employee is $2.13 per hour, which the employer may then offset by taking a $5.12 tip-credit toward paying the rest of the $7.25 per hour.  However, an employer may only utilize the tip-credit should two conditions be met: (1) the employer gives notice to his employee of the provisions of the FLSA's tip-credit subsection, and (2) the employee retains all tips she receives (excluding tips paid into a valid tip pool to be shared among multiple tipped employees).  Should the tipped employee not bring in enough in tips to reach minimum wage, the employer is required to pay the balance so the employee reaches the minimum wage threshold.

Tipped employees are employees who regularly make at least $30 per month in tips.  Tipped employees do not have to be tipped directly by the customers so long as they have sufficient interaction with the customers on a regular basis.  Restaurant hosts and hostesses qualify as tipped employees because they regularly receive at least $30 per month in tips from valid tip pools.  Note that tipped employees who work other jobs in the restaurant may qualify as non-tipped employees in their other capacities.  If an employee is a tipped waiter for 50% of the day and a janitor the other 50%, the employer may only take the tip-credit for the portion of the day that the employee works as a tipped waiter.

The Department of Labor (“DoL”) announced substantive changes to the federal tip-credit notice regulations on April 5, 2011.  The DoL did not provide much time for the members of the restaurant industry to give feedback and comments upon the substantive changes before requiring enforcement of the new provisions.  On May 3, 2011, the National Restaurant Association (“NRA”) met with the DoL to express its concerns over the new regulations and to ask for a 120-day delay in implementation until the DoL fully understood the industry’s concerns.  Such a delay was not granted.  The substantive changes officially took effect on May 5, 2011.

What are the new notice regulations?  If the employer wishes to take a tip-credit from his employees, he must inform them of the following four things.  The employer may provide either written or oral notice, though the NRA suggests providing written notice.

• The amount of the cash wage to be paid to his employees;
• The additional amount by which wages are increased by the tip value (increase in wages cannot exceed actual value of tips received);
• The fact that all tips must be retained by the individual employee, with the exception of tips paid into a tip pool (tip pool is limited to employees who regularly receive tips); and
• The fact that the tip-credit will not be applied to any employee who had not been informed of the previous three items.

The DoL also adjusted the maximum contribution percentage that an employer of tipped employees can require that the tipped employee contribute to a tip pool.  Formerly, the DoL capped the required contribution percentage at 15%, but the DoL has removed any cap on the percentage.  The DoL has already removed ambiguity regarding whether tips are the property of the employees; unequivocally, tips are the property of the employees.  The DoL has said that compulsory service charges do not count as tips, but may be used to fulfill an employer’s minimum wage obligation.  With regards to tips left on bills paid by credit card, employers are to pay the employee the tip less the percentage taken by the credit card company for use of its services.  For example, if a $10 tip is left via credit card and the credit card charges a 3% rate, the employer must pay his tipped employee $9.70. 

The repercussions for employers who fail to give proper notice to their tipped employees about the tip-credit provisions are harsh.  If employers fail to give proper notice, the use of tip-credits is invalidated, meaning that the employers cannot take the tip-credit into account when paying employees minimum wage.  The possibility of civil and criminal penalties being assessed to infringing restaurant employers also looms large.

On June 16, 2011, the NRA, along with the Council of State Restaurant Associations and the National Federation of Independent Businesses, sued the DoL over the new tip-credit regulations.  

We shall wait and see what happens, but for now all employers who employ any tipped employees must comply with the new tip provisions. 

Daniel N. Ramirez is a named partner at Monty & Ramirez, LLP. He is board certified in labor and employment law by the Texas Board of Specialization and has been recognized as a Rising Star by Super Lawyers magazine. 

Daniel's Contact Information:

Email: dramirez@montyramirezlaw.com

Telephone: 281.493.5529

Website: http://www.montyramirezlaw.com

Is Immigration Reform Possible - I Support It

Recently, Democratic U.S. Senators introduced their version of Comprehensive Immigration Reform.  The Bill was offered by Senators Robert Menendez, Harry Reid, Patrick Leahy, Richard Durbin, Charles Schumer, Kristen Gillibrand, and John Kerry.  The "Comprehensive Immigration Reform Act of 2011" would address an immigration system in need of a serious overhaul in order to manage those millions of "undocumented" people working and living in the shadows of our society.

The Bill proposes a balance of the common differences between Republicans and Democrats: it includes continued enforcement through ICE and E-verify with an option to integrate certain qualified and vetted immigrants into the U.S.  I look forward to seeing the progress of this bill as it makes its way through Congress.