How do I handle I-9 forms during a merger or acquisition?

Acquiring  or merging employers have two choices on how to handle the Form I-9 for the employees selected to continue their employment with the new organization. The acquiring employer may choose to complete new Forms I-9 for all new employees or keep the previous employer's completed forms.   

Employers choosing to complete new Forms I-9 should treat all acquired individuals as new hires. With this option, when completing Section 2 of the form, the official effective date of the acquisition or the merger must be used as the hire date, regardless of the acquired employees' original hire dates with the previous company. 

Employers that choose to retain the previous owner's completed forms should treat the individuals as employees who are continuing with no interruption in their employment status and have a reasonable expectation of employment at all times. This option will result in the acquiring company inheriting all potential liabilities for errors and omissions made by the previous employer on the forms. The acquiring employer, therefore, should conduct an audit of the previous employer's forms to ensure compliance with federal requirements. Another option for the acquiring employer is to review each Form I-9 with every newly acquired employee and update or reverify each employee's information, as necessary. This process can be time-consuming for large employers.  

Employees who were hired prior to Nov. 6, 1986, and are selected to continue their employment with the acquiring employer, with a reasonable expectation of employment at all times, are exempt from completing a new Form I-9. If the employer has determined that an individual meets the above hiring requirements but will not be continuing his or her employment with the acquiring employer, or does not have a reasonable expectation to continue his or her employment with the acquiring employer, then the individual should complete a new Form I-9 using the above guidelines for completing a new form.  

Employers that are challenged with determining whether employees acquired during a merger or acquisition are continuing in their employment with a reasonable expectation of employment at all times or whether the acquired employees are considered new hires for Form I-9 purposes should consult with their legal counsel for guidance.