Latest E-Verify Legal Research

The latest legal update on E-Verify compliance for government contractors is now available. Jointly produced by Michael Best & Friedrich LLP and MBO, E-Verify Requirements for Contractors offers a groundbreaking preview of the shape of new regulations to come. In June, Bush signed an Executive Order mandating E-Verify I-9 checks for persons working on government contracts -- both new and existing workers. E-Verify raises sticky issues when it comes to sub-contractors, small vendors, and independent consultants performing work for federal contractors. Even more attention-getting is the risk of getting it wrong -- failure to comply can lead to penalties ranging from fines to debarment from federal contracting. As was revealed at our briefing on Friday, your E-Verify program is only as good as your contractor classification. If you're exposed to contractor reclassification risk, then for every misclassified contractor, you have a de facto employee working on a government contract who you have not E-Verified. But don't take my word for it -- check out the paper, run your own research, and send our your comments and feedback.

Stay tuned for the most up to date info regarding E-Verify. The comment period is closed, and detailed instruction is expected to be released as soon as November.

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MBO Hosts E-Verify Compliance Briefing

MBO to host executive briefing with leading contractor risk attorney Eric Rumbaugh from Michael Best LLP on E-Verify for Contractors this Friday August 15th. The meeting is now fully booked. To get on the waiting list or receive a copy of the White Paper, please contact us.

E-Verify is an online system that allows employers to check the work status of new hires by comparing information from an employee's Form I-9 against Social Security Administration and Department of Homeland Security databases.  Although initially a voluntary program, as a result of a Presidential Executive Order signed in June, all federal contractors will be required to use the system.

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MBO Sponsors HCI Government Forum

MBO Partners has been announced as one of four sponsors -- along with Booz Allen Hamilton, IBM, and Vangent -- for the first annual HCI Government Talent Forum. The conference will take place on September 17th, 2008 and will provide strategic thought leadership in human capital management for government agencies. Keynote speakers at the event include Paul Light, NYU Professor of Public Policy, and Congressman James Moran, 8th Congressional District of Virginia.

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States Adopt E-Verify

On July 7th, Missouri joined several other states like Colorado, Georgia, Rhode Island, Utah, and Oklahoma in requiring all state contractors to enroll in E-Verify. E-Verify is an online system administered by the Department of Homeland Security and the Social Security Administration whereby employers can verify employment eligibility of workers and vett their documents electronically.

Marketed by DHS as an essential tool for employers to ensure they employ only legal workers, the program is voluntary for most employers but required for Federal contractors -- including independent contractors and small services vendors hired to perform work for government agencies. With the states getting in on the act, compulsory enrollment will continue to grow.

Some critics of the program have asserted that there must be funds budgeted to improve the accuracy of the Social Security Administration's record systems, and that the program should be rolled out in phases. Others have pointed out privacy issues as a concern.

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Technologies Reconcile State & Federal Tax Returns

Today's news feed reveals that the state of Rhode Island is getting serious about recouping its tax gap -- that difference between the taxes collected and the taxes owed. New technology and the innovation available through a public-private partnership are enabling Rhode Island to feed IRS federal tax data into a data warehouse along with state tax return records, and then mine that data to look for discrepancies.

RI expects to recover around $10 million in uncollected taxes, targeted at independent consultants, contractors, and small businesses.  

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House Bill Would Penalize Misclassification

The flurry of introduced legislation intended to address employee misclassification continues: A new bill introduced in the House by Democratic Representatives Woolsey and Andrews would penalize employers who improperly classify their employees as contractors to save on payroll taxes, benefits, and other costs.

The Employee Misclassification Prevention Act would amend the Fair Labor Standards Act to clarify language around employee -- contractor classification [i.e., whether individuals should be paid as a W2 or a 1099], increase reporting and communications between the . . .

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New Hampshire Added To List of States Cracking Down on Contractor Misclassification

New Hampshire can now be added to the list of states (including CA, NY, and MA), putting together special task force initiatives to crack down on improper contractor classification.

As reported in today's Nashua Telegraph:

"Labor Commissioner George Copadis said Wednesday his department has received enough complaints about the practice that it is has teamed up with four other state agencies, including the attorney general’s office and the Department of Revenue, to look in to how big the problem really is.

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MA Governor Cracks Down on Misclassification

One by one, the states are turning up the heat on independent contractor classification. On March 12, 2008, Mass. Governor Deval Patrick signed Executive Order 499 creating a joint task force to identify and crack down on illegal misclassification of workers as independent contractors.

"Through joint efforts, the Task Force is charged with combating the underground economy and employee misclassification, including efforts to: (a) foster compliance with the law by educating business owners and employees about applicable requirements; (b) conduct joint, targeted investigations and enforcement actions against violators; (c) protect the health, safety and benefit rights of workers; and (d) restore competitive equality for law-abiding businesses."

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Fedex Owes $319 million

IRS says Fedex owes $319 mln
in back taxes: filing
Reuters

Friday, December 21, 2007; 9:30 PM
LOS ANGELES (Reuters) - Fedex Corp (FDX.N)
said on Friday that the U.S. Internal Revenue
Service found that its FedEx Ground independent
contractors should be reclassified as employees
for tax purposes and that the company faced
related taxes and penalties of more than $319
million for 2002.

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