Maliha S. Mian, Attorney
As the end of the year approaches, small businesses must evaluate their policies and procedures governing various legalities. More often than not, small business owners do not realize the importance of running legal audits on their policies and procedures. The list below identifies critical internal audits to conduct for legal compliance.
Business
I-9 Compliance: Please note that Employers need to retain Form I-9, Employment Eligibility Verification (“I-9”) for all applicable Employees. The I-9 has been updated this past year and now entails two (2) pages. A proper I-9 policy should be drafted and retained in company files. Most small businesses neglect I-9 compliance. It is important to be consistent in maintaining I-9 compliance and policies. Be sure to provide the Employee with the List of Acceptable Documents when requesting the Employee to complete the I-9. It is the Employer’s or their legal representative’s responsibility to carefully examine documents provided by the Employee to ensure the documents are unexpired and are acceptable documents before signing the Employer’s part of the I-9. Try to make a goal to schedule annually a date to evaluate all I-9 files to update or implement a system that reminds you to update the I-9 files for employees at time of re-hire and/or time of exit. The fines for not being I-9 compliant can take a toll on some small businesses. These fines can easily be avoided with proper planning.
E-Verify: In addition to maintaining proper I-9 files, if your company has used E-Verify in the past, use the end of the year to audit your company’s policies relating to E-Verify. One thing to check includes whether or not all new hires for your company have been processed through the E-Verify system. In addition, when completing an E-Verify case, be sure to only use documentation provided by the Employee when he/she completed the I-9.
Corporate Documents: Whether your business is an LLC, Corporation, or a type of Partnership, take the time now to review your Operating Agreement, Articles of Incorporation/By-Laws, or Partnership Agreement and check for significant changes within the business (i.e. change in ownership: members, shareholders, and/or partners).
Federal & State Labor Laws: Hopefully, your small business has policies and procedures in place to assist with federal and state labor laws. If not, take the time to draft and implement a set of policies and procedures. In the event, that your business has policies and procedure in place, check to see whether or not your business has been abiding by those policies in practice. In the event of litigation, customary practices not aligned with set policies can be detrimental to your case.
Contracts: Ensure all existing contracts are being satisfied and not either in breach or near breach.
Immigration
Public Inspection File: If your business staffs employees from abroad via the H-1B nonimmigrant process, take the time to ensure your Department of Labor required Public Inspection Files are properly maintained at the correct location and updated with any changes.
Audit File: If your business petitions for an immigrant visa (i.e. the Green Card) on behalf of the foreign employee, it is critical to ensure the audit file is properly retained for five (5) years and includes all the necessary recruitment records.
Procurement
Requirements Check: If your business has been awarded a government project, check to ensure that you are still in compliance with the requirements for the project. Are you maintaining the proper insurance, staffing the project with the correct type of employee, meeting the required deadlines, and providing the correct information according to the government’s required format? Have you missed a deadline or erred in some way? If so, do you know how many errors are permissible for the awarded project before the contract is considered breached?
Regulations Check: Government projects, especially at the federal level, involve several regulations. Keep in mind that each project has its own applicable regulations. It is important to stay compliant to the regulations.
Conclusion
The end of the year is a great time to conduct legal audits for your business and prepare you for a successful new year. Remember to safeguard your business to realize your goals.
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Maliha S. Mian, Attorney is with the Mian Law Firm P.L.L.C. located at 10998 S Wilcrest Drive, Suite 198, Houston, Texas 77099. You can reach her by email at [email protected] or visit the website at www.MianLawFirm.com.
