Going Through a Merger or Acquisition? Don’t Forget About Form I-9s

Before Finalizing the M&A Transaction: Review All I-9 Forms

All parties involved in an M&A must meticulously review their employee documents, especially Form I-9s, to ensure that their employee documents, including Form I–9s, are both comprehensive and fully accurate. By doing so, you can prevent costly fines and penalties from federal investigations. 

If your business is the acquiring party, you are not obligated to review the target company's Form I-9 documents until you complete the entire acquisition process.

If your business is being acquired, you are not obligated to provide any documents beyond the legally required ones until the acquisition is finalized and you become a subsidiary. However, preemptive sharing fosters transparency and aids in addressing any compliance issues promptly.

Essential Steps for a Successful I-9 Audit

A comprehensive I-9 audit is vital during M&A. The acquiring business should look for certain specific issues or warning signs when conducting an audit of the target company’s I-9s. As advised by SHRM and The National Law Review, Form I-9 fines have recently increased and even minor errors can lead to fineable offenses.

SHRM recommends that the acquiring business should:



• Verify that the total number of I-9s aligns with the master list of payroll employees.
• Review each Form I–9 for completeness and accuracy.
• Rectify any errors found during the audit.

Understanding the extent of compliance issues early allows informed decision-making.

Do I Have to Complete a New I-9 for Employees During an M&A?

According to the United States Citizenship and Immigration Services (USCIS), employers who have acquired another company or have merged with another company may choose to treat employees who are continuing their employment with the related, successor, or reorganized employer as:

• New hires, in which case employers must complete a new Form I-9, Employment Eligibility Verification; or
• Continuing in employment, in which case employers must obtain and maintain the previously completed Form I-9.

You must ensure your company continues meeting timelines for I-9 completion, including completing Section 1 no later than the first day of employment and finishing Section 2 within three business days of employment. Also, note that the “effective date” of the merger or acquisition needs to be included as the new employment date in Section 2 of each I-9. 

I-9 Compliance and Existing Policies During an M&A

Employers who choose to keep existing I-9s that were previously completed assume responsibility for any errors or omissions on those forms. Consider revamping your I-9 compliance processes if the acquisition has a more favorable policy. 

Finally, the newly unified company will be legally responsible for all employment verification paperwork, but leaders of both organizations will have to be involved in any audit process.

Remember These E-Verify Deadlines During an M&A

Employers who are using E-Verify as required by the Federal Acquisition Regulation (FAR) clause may decide to verify, or re-verify their entire workforce. Whether you’re using E-Verify, employers must adhere to specific timelines during M&As, these include:



• When choosing to verify the entire workforce, you have 180 days from the effective date of the merger or acquisition to create an E-Verify case for each of the non-exempt employees acquired from the target company.
• When choosing not to verify the entire workforce, you have 90 days from the effective date of the merger or acquisition to create an E‑Verify case for each of the non-exempt employees who joined the company due to a merger with or acquisition of the target company.
• Create cases for newly hired employees within 3 business days of their start date, regardless of the acquisition timeline.

A New I-9 Process for a New Merger or Acquisition

Careful due diligence during an M&A is essential for a successful transition and risk mitigation. With Clear I-9 by HRlogics, you can create error-free I-9s and track all related documents, updates, and expirations in real-time. Leverage a customizable dashboard and robust reporting capabilities, including I-9 audit trails. Partner with Clear I-9 to keep your I-9s safe and accessible during the complex M&A journey.