Congress Amends The Fair Credit Reporting Act
To Benefit EmployersIn the July-September 2000 issue of Business Lines we reported that workplace investigations were made more complicated by a Federal Trade Commission (FTC) opinion letter (the "Vail Letter") which held that the Fair Credit Reporting Act (FCRA) applied to "third-party investigators" (lawyers, consultants, etc.) hired to perform workplace investigations. That letter concluded that such investigators, hired to perform workplace investigations (such as for sexual harassment, theft, etc.), were "consumer reporting agencies," and therefore that employers who retained them had to implement various disclosure, consent, and communication procedures with respect to the investigated employee. Because this greatly complicated employee investigations, Congress immediately took steps to amend FCRA to avoid the impact of the Vail Letter. Section 603 of FCRA (15 U.S.C. 1681(a)) now has been amended to exclude most employee investigations from FCRA disclosure requirements. As a result of the amendment, a "consumer report" now does not include a communication made to an employer in connection with an investigation of (1) suspected misconduct by an employee; (2) compliance with federal, state, or local laws and regulations; (3) the rules of a self‑regulatory organization; or (4) any pre-existing written policies of the employer, so long as the communication is not made for the purpose of investigating a consumer's (employee's) credit worthiness, credit standing, or credit capacity. The communication or report of the third-party investigator need only be provided: - To the employer or an agent of the employer
- To any federal or state officer, agency, or department, or any officer, agent, or department of a unit of local government
- To any self-regulatory organization with regulatory authority of the activities of the employer or employer, or
- As otherwise required by law, including FCRA.
After an employer takes "adverse action" based in whole or in part upon the communication, the employer must disclose to the employee a summary containing the nature and substance of the communication upon which the adverse action was based, except that the sources of information (e.g., a witness' name) need not be disclosed. Our earlier article may be found on our website, http://www.elliottlawson.com. Please contact us if you have question about this important issue. Mark M. Lawson Back To The Top
Immigration & Employment
Form I-9: An Employer's Best FriendCongress Amends The Fair Credit Reporting Act To Benefit Employers The Form I‑9 is a document that all employers are required to obtain on all employees, when they begin to work. Obtaining completed Form I‑9's on all employees is not only a legal requirement, it is also the best way for an employer to protect itself against a charge of knowingly employing illegal aliens. Completion of I‑9 documents the employee's identity and his or her eligibility to work in the U.S. I‑9s need to be completed as soon as an employee begins to work (i.e., on the first day of work), but not during the hiring process. Improper collection of I‑9 documentation before an employee is hired may lead to a charge of discrimination on the basis of citizenship status, so be careful not to ask for I‑9 documentation until the applicant has been hired. You should ask the employee to complete the I‑9 on his first day of work, but you must allow him three days to produce the proper documentation. If the employee alleges that his documentation has been lost or destroyed, he may apply for re-issuance of those documents from the proper authority and present a receipt for the replacement order within three days. The employee then has 90 days to produce the replacement documents. If the employee fails to produce the documents or a receipt within three days, or fails to produce the replaced documents within 90 days, the employee should be discharged for failure to provide proper documentation. The back of the I‑9 provides a complete list of acceptable documents. The employee must produce one document from List A (a passport is the most commonly used document from List A) or one document each from Lists B and C (usually a driver's license and a social security card). List B offers proof of the employee's identity while List C demonstrates eligibility to work; List A documents both identity and work eligibility. Original documents must be produced; photocopies are not acceptable, except in the case of a certified copy of a birth certificate. We strongly recommend that the employer photocopy the documents and attach the copies to the completed I‑9 in case a question arises later. Copying the documents is no substitute for completing the I‑9 form. The employer's obligation is to examine the documents, and make sure they appear to be genuine. An employer will not be held liable for accepting false documents if they appear to be genuine; however, the employer should carefully examine the documents and watch out for obvious evidence of forgery such as cut-and-pasted photos, altered dates or numbers, photocopies, or questionable paper stock. If the documents appear to be genuine, the employer must accept them. Failure to accept genuine documents could result in a claim of citizenship discrimination against the employer. However, accepting documents that are obvious forgeries could lead to civil or criminal penalties for knowingly employing or harboring illegal aliens. Once complete, the I‑9 should be retained for a period of three years, or one year after the employee is terminated, whichever comes first. Additionally, any document that provides proof of eligibility to work (List A or List C documents) that have an expiration date within that three‑year period must be re-verified by viewing (and copying) the renewed document and noting them on the I‑9 form. Employers should implement a tickler system to remind themselves to update or purge their files. Both the Federal Bureau of Investigation and the United States Immigration and Customs Enforcement are authorized to investigate employers' I‑9 compliance, and can conduct audits or investigations on a random basis or on the basis of a complaint. Having completed I‑9s and copies of supporting documentation on file not only can ensure an employers' compliance with the legal requirement, but it can also help protect an employer from a charge of knowingly employing or harboring illegal aliens, which can carry significant monetary penalties and even jail time. Many businesses hire experienced professionals to conduct advisory audits (i.e., review personnel files for I-9 compliance and make recommendations for improvements). If your business is interested in having an advisory audit, please contact Dawn Figueiras of Elliott Lawson & Minor at 276‑466‑8400 or dfigueiras@elliottlawson.com Dawn Figueiras Back To The Top
Immigration Law And Employment - Which Foreign Nationals Are Eligible To Work In The United States?Employers in many industries today face the sometimes-formidable task of recruiting and maintaining a stable-and legal-workforce. To understand which foreign nationals are permitted to work in the United States, it is necessary to have a basic understanding of the immigration process. Foreign nationals who enter the United States are classified into two categories, based upon their intent. Those who come into the U.S. with the intent of remaining here permanently are "immigrants," while those who intend to remain here only temporarily (although this may be up to six or seven years, depending on the purpose of their visit) are "non-immigrant foreign nationals." Many foreign nationals in both of these categories are permitted to work in the United States, and below is a brief overview of many of these classifications. Immigrants, LPRs, and Green Card HoldersImmigrants become "lawful permanent residents" ("LPRs") with the issuance of a "green card" and are then legally authorized to work in the United States. Foreign nationals may apply for LPR status while in their home country or while already in the United States. Nearly all foreign nationals become LPRs on the basis of close family ties to a U.S. citizen or other LPR, although a few become LPRs on the basis of employment. Those relying on employment are limited to those foreign nationals who are considered "priority workers" (i.e., foreign nationals with extraordinary ability, outstanding professors and researchers, or certain high-level executives in multinational companies) or "national interest petitions" (i.e., those whose work in the United States would be a significant asset to the country). Many foreign nationals who have applied for LPR status while here in the United States are authorized to work during the pendency of their application by the granting of an "Employment Authorization Document" ("EAD"), which is sometimes referred to as a "work permit." An immigrant seeking to come to the U.S. on the basis of an immediate family member's citizenship or LPR status in the U.S. must first qualify for a family-based visa, and then undergo the long and arduous process of applying for LPR status. Only about 480,000 family-based visas are issued annually, and there are extremely long waiting periods for many relatives. Those who qualify as "immediate relatives" of a U.S. citizen (i.e., spouse, children under the age of 21, or parent of a citizen over the age of 21) take priority over those more-distant family relationships known as "preference immigrants" (spouses or children under the age of 21 of LPRs, adult children or adult siblings of U.S. citizens). Although the process can take years, the issuance of an EAD during the application process permits most applicants to work while waiting on their LPR status. Without an EAD, however, an applicant for LPR status is not permitted to work in the United States until the LPR status has been granted. Non-immigrants and Visa ClassificationsNon-immigrant foreign nationals typically require a visa before entering the United States. Most of western Europe and Japan (27 countries in all) participate in a mutually- reciprocal "visa waiver program" with the U.S. Under this program, U.S. citizens aren't required to obtain visas when entering those countries, and their citizens aren't required to obtain visas when entering the U.S.; all that is required for travel is a valid passport. Additionally, the U.S. permits most Canadians to enter the U.S. without obtaining a visa. However, Mexican citizens are required to have a visa or a "border crossing" visa (also known as a "laser visa"). Most visas do not permit foreign nationals to work in the United States. Exceptions to this rule include the E visas (also known as "treaty trader" visas (E-l visas) or "treaty investor" visas (E-2 visas), these visas are limited to citizens of NAFTA countries who will be engaging in significant international trade or making a substantial investment in a U.S. business), the H-IB visa (limited to certain specialty occupation workers after the U.S. Department of Labor has certified that their employment will not harm working conditions or wages for American workers; this is limited to 65,000 visas annually), and the L-l visas (permits U.S. companies with international operations to transfer employees from their foreign offices to the U.S. for a limited period of time). One common element of these three visa categories is that the visa is "employer-specific." While in the U.S. on an E, H-IB, or L-l visa, the foreign national must remain employed by the company that sponsored his or her visa application, and may not change employers without undergoing a new visa application process. Therefore, it is unlikely as an employer that you will hire a foreign national with an E, H-IB, or L-l visa, unless you have sponsored that foreign national's visa application. How Can an Employer Be Sure that a Foreign National is Authorized to Work in the U. S.?Completion of the Form I-9 is the best way to verify that a foreign national is authorized to work in the U.S. A foreign national must be able to produce one of the documents on List A or List C of the Form I-9 in order to be able to work legally in the United States. Foreign nationals who are legally authorized to work in the U.S. most commonly possess a social security card (that does not bear a notation that the holder is unauthorized to work in the U.S.), a "green card" (Form I-151 or I-551) or an employment authorization document (Form I-688A), but may possess any of the documents listed on the Form I -9. Viewing a foreign national's employment documentation is the only way for an employer to know that it is employing someone who is legally eligible for work in the United States and to protect itself against a charge of employing or harboring illegal aliens. (See our article entitled "Form I-9: An Employer's Best Friend."). A foreign national who can not produce appropriate documentation is likely to be prohibited from working in the U.S., and the employer should not continue to employ him or her. For more specific advice regarding immigration law in an employment context, contact your attorney. Dawn Figueiras Other exceptions include limited on-campus employment for students on a 1-1 visa, and spouses or children of certain E visa-holders. Back To The Top
New FLSA Overtime Rules AnnouncedIn the October-December 2003 issue of Business Lines we reported that the Department of Labor had proposed changes to the overtime pay exemption rules under the Fair Labor Standards Act ("FLSA"). The proposed changes were discussed and negotiated over a period of a year, and the final rule was published in the Federal Register on April 23, 2004. These changes are slated to go into effect on August 23, 2004, although there is currently a wave of political opposition to the final rule and we will be closely watching to see if this has any tangible effect. The final rule contains several important differences from the proposed changes that we described last year. The Salary Basis Test. The requirement that exempt employees be paid their full salary regardless of quantity or quality of hours worked is basically unchanged. However, the final rule does permit deductions (or "pay-docking") for full-day disciplinary absences (un-paid suspensions). Also, the final rule broadens the safe harbor exemption for employers who make isolated or inadvertent pay deductions, however, the employer will lose exemption status for all employees in the same job classification working for the same manager who is responsible for a pattern or practice of improper pay deductions. The Salary Level Test. The minimum salary level for exempt employees has been raised to $23,660 annually ($455 weekly), up from $22,100 annually as proposed last year. Any employee paid less than $23,660 annually is automatically considered "nonexempt" and is eligible for overtime pay. Employees paid more than $23,660 annually may be considered exempt from overtime pay if they pass the Job Duties Test. The Job Duties Test. The test for job duties for exempt employees is essentially the same as we reported last year, with just a few changes. "Executive employees" who have the "primary duty" of managing a department or subdivision of a business, customarily and regularly direct the work or two or more other full-time employees, and have authority to hire and fire (or whose recommendations regarding hiring and firing are given particular weight), and who meet the Salary Level Test, are considered exempt employees. "Administrative employees" who have the "primary duty" of performing office or non-manual work directly related to the management or general business operations of the employer or the employer's customers and regularly and customarily exercise discretion and independent judgment, and who meet the Salary Level Test, are considered exempt employees. Gone from the final rule is the proposed rule's requirement that the administrative employee hold a "position of responsibility." "Professional employees" who have a "primary duty" of performing office or non-manual work requiring advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, but can also be acquired by a combination of intellectual instruction and work experience, and who meet the Salary Level Test, are considered exempt employees. Missing from this section of the final rule is the proposed rule's discussion of attaining advanced knowledge through military training; the final rule now specifically prohibits an employer from relying on a veteran's military training to exempt him or her from overtime pay. "Outside sales employees" are considered exempt if they meet the Salary Level Test and perform the "primary duty" of making sale or obtaining orders away from the employer's place of business. The Highly Compensated Employees Test. The salary threshold for exemption under the highly compensated employees test has been increased to $100,000 under the final rule (up from $65,000 under last year's proposed rule). Employees who meet this threshold are exempt as long as they perform office or non-manual work and customarily and regularly perform one or more exempt job duties as required for executive, administrative, professional, or outside sales employees (but are not required to meet all elements of the Job Duties Test). For more information about the final rule, you can find the text of the final rule at 69 Fed. Reg. 22,171 (Apr. 23, 2004), available on-line at www.gpoaccess.gov/fr/, or you can download an informative slideshow prepared by the Department of Labor at http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm. For further information and guidance, contact your attorney. Dawn Figueiras,
dfigueiras@elliottlawson.com Back To The Top 
Elliott Lawson & Minor, P.C.
110 Piedmont Avenue, Suite 300
Bristol, VA 24201
Phone: 276-466-8400
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