All posts by Andrew Fromm

It is an incredibly frustrating email to receive, but it happens more often than you think. You log into your HR portal to process a new hire’s employment eligibility, only to find your access completely blocked. Behind the scenes, U.S. Citizenship and Immigration Services (USCIS) has terminated your E-Verify account. The culprit isn’t a massive data breach or a deliberate violation of federal law. Instead, it is a classic administrative breakdown: an unanswered email and an outdated Point of Contact (POC). Here is a look at why E-Verify has been cracking down on unresponsive accounts, why working through a vendor doesn’t shield you from liability, and the exact steps you need to take to keep your compliance intact. The Silent Spiral of Account Termination USCIS Account Compliance actively monitors E-Verify activity to flag potential system misuse, technical errors, or procedural non-compliance. When they spot an anomaly, their first step isn't to hit the panic button, it’s to reach out. E-Verify compliance officers will attempt to call or email the designated Program Administrator or POC listed on the account to offer guidance and resolve the discrepancy. However, the modern workforce is highly dynamic. HR professionals change jobs, teams restructure, and corporate email addresses are deactivated. If those internal updates aren't mirrored in your E-Verify profile, a dangerous sequence unfolds: E-Verify flags a potential compliance anomaly Compliance Officers call/email the listed POC Inbound communications go unanswered or bounce USCIS terminates the account for program non-compliance Once the agency's communications go completely unanswered and ignored, E-Verify terminates the client account to protect the integrity of the system. The Clean-Up Process When an account is terminated due to radio silence, you can't just click an "undo" button. To fix it, you are forced to go through a compounding bureaucratic cycle: You must formally respond to and resolve the initial compliance warning that went ignored in the first place. You have to update the company profile with accurate, real-time POC data. You must go through the entire process of reinstating your Memorandum of Understanding (MOU) to regain system access. If working with vendor, the MOU Reinstatement Agreement must be signed by the employer, vendor and agent from DHS – Verification Division. The Vendor Trap: Ultimate Responsibility Stays with You Many employers utilize a third-party workforce management platform or an E-Verify Employer Agent to handle their verification workflows. This setup leads to a dangerous misconception: "Our vendor handles E-Verify, so their compliance is our compliance." This is a critical misunderstanding. Even if you partner with a third-party vendor, the employer bears ultimate legal and administrative responsibility for employment eligibility verification. If USCIS compliance teams try to reach your specific company regarding a data mismatch or an audit flag, and your primary internal POC is unreachable, the vendor cannot simply waive a magic wand to stop the termination. If you use an employer agent, you must explicitly instruct them to push updates through their master agent account to keep your specific client profile accurate. How to Protect Your Organization Reinstating a terminated MOU is a relatively straightforward process. E-Verify agents are generally highly cooperative, understand that operational shifts happen, and will support you through the steps to build a compliant foundation. However, frequent account terminations look terrible from a corporate compliance standpoint. They signal weak internal controls and can elevate your risk profile for future audits by Immigration and Customs Enforcement (ICE) or the Department of Justice (DOJ). To prevent this operational headache, build these administrative habits into your regular HR lifecycle: Audit your active account users - Quarterly CheckLog into E-Verify, navigate to Company Account > Company Profile, and review your designated Program Administrators and POCs. Remove individuals who have left the company or transitioned to different departments. Coordinate with your third-party agentIf you utilize an E-Verify Employer Agent, don't assume they know your internal roster. Explicitly provide them with updated contact information whenever your HR leadership changes so they can update the client card in their portal. Whitelist official government domainsEnsure your corporate email filters do not accidentally send official communications from @uscis.dhs.gov or @dhs.gov straight to the spam or junk folders. Establish an HR transition protocolAdd "E-Verify Update" to your internal HR offboarding checklist. Before a Program Administrator surrenders their credentials, ensure a successor is designated and fully trained in the platform. An active E-Verify account requires active maintenance. Treat your Point of Contact information not as a static field filled out during initial enrollment, but as a critical piece of live regulatory infrastructure.

Virginia Senate Bill 759 Change Notification Virginia SB 759 updates the state’s unemployment insurance framework by revising the weekly benefit amount (WBA) tables used to calculate claimant payments. While the underlying methodology, basing benefits on wages earned in the two highest quarters of the base period, remains unchanged, the bill introduces higher benefit tables to increase the amount payable to eligible individuals. The legislation establishes a two-phase implementation: an initial updated table effective January 1, 2026, followed by a second, revised table that becomes effective on the earlier of six weeks after enactment or July 1, 2026. These changes are designed to incrementally enhance benefit levels without altering the fundamental calculation structure. Effective Date The first updated benefit table takes effect January 1, 2026. A subsequent revised table becomes effective on the earlier of six weeks after the bill’s enactment or July 1, 2026. Virginia SB 759 Implication to Stakeholders Although the calculation methodology remains consistent, the increase in weekly benefit amounts is likely to raise overall unemployment insurance payouts. Over time, this may place upward pressure on the solvency of Virginia’s Unemployment Trust Fund, which can translate into higher employer contribution rates or adjustments to taxable wage bases in future rate cycles. Employers may also see a marginal increase in claims costs charged to their experience rating accounts, particularly in industries with higher turnover. Recommended Action for Employers Employers should review their unemployment insurance cost projections and monitor future communications from the Virginia Employment Commission regarding rate adjustments tied to these enhanced benefit levels. It is advisable to continue emphasizing strong claims management practices, including timely responses to separation notices and proper documentation of terminations, to mitigate potential increases in experience-rated charges. Additionally, budgeting for potential increases in UI tax liability over the next several years would be a prudent step.

Virginia Senate Bill 433 Change Notification Virginia SB 433 amends § 60.2-612 of the Code of Virginia to modify unemployment insurance eligibility rules, primarily by addressing how employer lockouts are treated. The measure clarifies that a lockout initiated by an employer is not considered a disqualifying labor dispute, meaning impacted employees may qualify for unemployment benefits. However, benefits may still be denied in limited circumstances, such as when the employee’s bargaining representative refuses to negotiate in good faith or violates an existing collective bargaining agreement. Effective Date July 1, 2026 Virginia SB 433 Implication to Stakeholders This change increases the likelihood that employees involved in employer-initiated lockouts will qualify for unemployment benefits, which may lead to higher benefit charges to employer accounts in those situations. Employers engaged in labor disputes no longer have the same ability to rely on a blanket disqualification of benefits during lockouts. Additionally, the enhanced verification requirements may improve program integrity overall, but they do not materially reduce employer exposure to claims arising from labor disputes. Recommended Action for Employers Employers should carefully evaluate labor relations strategies, particularly when considering or implementing a lockout, as such actions may now result in increased unemployment claims liability. Coordination with legal counsel and labor relations advisors is recommended to understand the financial and compliance implications.Employers should also continue to monitor claims closely and respond promptly to agency inquiries, ensuring accurate reporting of separation circumstances to mitigate improper charges.

Kentucky Senate Bill 129 Kentucky Senate Bill 129 updates KRS 341.243 by modifying the structure and funding mechanism of the existing Service Capacity Upgrade Fund, which supports modernization of the state’s unemployment insurance (UI) system. While the fund itself is not new, the bill revises how employer contributions are calculated and introduces a new rate adjustment methodology. Through December 31, 2026, employers will continue contributing based on the existing 0.075% rate reduction. Beginning January 1, 2027, the contribution structure changes, allowing the Secretary to set the rate annually, with a cap of 0.025%. The bill also establishes specific conditions under which contributions may be reduced or suspended, including when the fund reaches certain balance thresholds or if the UI trust fund balance declines below defined levels. Effective Date The bill maintains the current structure through December 31, 2026. The updated rate-setting methodology and ongoing provisions take effect January 1, 2027. Kentucky SB 129 Implication to Stakeholders Employers should expect continued contributions to the Service Capacity Upgrade Fund, but with a shift in how those contributions are determined beginning in 2027. While the updated structure introduces flexibility and may result in lower contribution rates due to the capped annual adjustment, it also creates variability, as the rate will be set annually at the Secretary’s discretion. Additionally, the presence of defined suspension thresholds may provide periods of relief depending on fund balances. Overall, employers may see changes in their UI tax calculations and should anticipate less predictability in year-over-year contribution amounts. Recommended Action for Employers Employers should closely monitor annual unemployment insurance tax rate notices, particularly beginning in 2027, to understand how the revised rate-setting process impacts their contributions. Coordination with payroll providers or tax advisors is recommended to ensure accurate budgeting and compliance. Employers should also stay informed on announcements from the Kentucky Office of Unemployment Insurance regarding rate adjustments or suspension of contributions, as these changes may affect cost planning and forecasting.

Nebraska Legislative Alert 847 Change Notification Nebraska LB 847 revises how the combined unemployment insurance (UI) tax rate is allocated between the employer contribution rate and the state unemployment insurance tax rate when the state UI tax rate is greater than zero. Under prior law, at least 80% of the combined rate was required to be assigned to the contribution rate and no more than 20% to the state UI tax rate. This measure changes that formula so that at least 50% of the combined rate must be attributed to the contribution rate and no more than 50% may be assigned to the state UI tax rate. The existing provision remains in place for employers with a combined tax rate of 5.4% or greater, where the state UI tax rate is zero and the full rate is assigned to the contribution rate. Effective Date April 7, 2026 Nebraska Legislative Alert 847 Implication to Stakeholders While the total combined UI tax rate may not necessarily increase, this change allows for a greater portion of the rate to be allocated to the state unemployment insurance tax component rather than the experience-rated contribution portion. As a result, employers may experience a shift in how their rates are structured, potentially reducing the direct impact of claims experience on a portion of their overall tax rate. However, it may also reduce predictability in how rates are distributed year-over-year, depending on how the state applies this flexibility. Recommended Action for Employers Employers should review their unemployment tax rate notices carefully to understand how their combined rate is being allocated under the revised formula. It is advisable to continue focusing on effective claims management practices, as the contribution rate component remains experience-based and subject to employer control. Employers may also want to consult with their unemployment insurance advisor to evaluate any shifts in tax rate composition and ensure they are prepared for potential changes in how their UI taxes are calculated going forward.

Maryland House Bill 242 Change Notification Maryland House Bill 242 updates the state’s unemployment insurance (UI) confidentiality provisions to align more closely with federal requirements. Specifically, the measure revises how the Maryland Department of Labor handles, safeguards, and discloses UI-related information so that it complies with governing federal statutes, including the Social Security Act, the Federal Unemployment Tax Act (FUTA), and implementing regulations such as 20 C.F.R. Part 603. These federal rules establish strict standards for the confidentiality, disclosure, and permissible use of UI data, and the bill ensures Maryland law is consistent with those standards. Effective Date Upon enactment Maryland HB 242 Implication to Stakeholders For employers, this change primarily affects how unemployment insurance information, such as wage data, contribution records, and claim details, may be shared or accessed. Employers may experience tighter controls around the release of UI information and potentially more formalized processes when requesting or responding to information from the state. While the change does not directly alter tax rates or benefit eligibility, it reinforces data privacy requirements and may limit informal or broad access to claim-related information, emphasizing compliance and proper authorization. Recommended Action Employers should review their internal processes for handling unemployment insurance information to ensure they align with stricter confidentiality standards. This includes confirming that only authorized personnel access UI data, maintaining secure recordkeeping practices, and responding appropriately to state requests for information. Employers may also want to coordinate with their third-party administrators or legal advisors to ensure continued compliance and to understand any procedural changes in how UI information is requested or disclosed under the updated law.

The IRS has now done more than preview updated 1099 form layouts. Its draft 2026 Instructions for Forms 1099-MISC and 1099-NEC confirm that the agency is moving toward more detailed reporting for cash tips, Treasury Tipped Occupation Codes, and overtime compensation. The draft also confirms that the reporting threshold for many covered payments is increasing from $600 to $2,000 for tax years beginning after 2025. That makes this a meaningful development for businesses that issue Forms 1099-MISC or 1099-NEC. The change is not limited to form appearance. The draft instructions show how the IRS expects these new fields to work within total income reporting, which means filers may need to revisit data collection, reporting logic, and year-end compliance processes before the 2026 filing cycle. What the draft instructions change for 2026 1099 forms The draft instructions identify several updates in the “What’s New” section. They state that new boxes 1b and 13a were added for cash tips, new boxes 1c and 13b were added for Treasury Tipped Occupation Codes, and new boxes 1d and 14 were added for overtime compensation. The same section also says the payer and recipient address fields were separated into individual entry boxes and that the minimum threshold for certain reporting and backup withholding requirements increased to $2,000, with inflation adjustments beginning in calendar year 2027. The instructions also clarify that these new amounts do not replace total income reporting. On Form 1099-NEC, cash tips and overtime compensation are still included in Box 1a. On Form 1099-MISC, those amounts are still included in Box 3. That means the IRS is adding detail without abandoning the broader roll-up structure already familiar to filers and recipients. Why this stands out Compared with the April 2025 instructions, this is a clear reporting shift. The prior instructions did not include these new tip, Tipped Occupation Code, or overtime boxes, and they reflected the older $600 threshold framework. In practical terms, the 2026 draft is asking for more granular reporting while also changing the dollar threshold that triggers reporting for many payments. The IRS had already hinted at this direction in the draft forms themselves and in Publication 1099, but the instructions matter because they tell filers how the agency expects the forms to be used. That is what makes the April 2026 draft instructions especially useful for tax, payroll, and compliance teams evaluating the impact. What this means for filers For companies that rely on established 1099 workflows, these draft instructions are an early warning. Systems that currently capture only total nonemployee or miscellaneous income may need to account for new subcategories tied to tips and overtime. Teams may also need to evaluate whether upstream payment classification, recipient communications, and year-end reporting controls are still aligned with the new structure the IRS is signaling. This is still draft guidance, but it is detailed enough to justify early planning. Suggested takeaway The IRS’s draft 2026 instructions for Forms 1099-MISC and 1099-NEC confirm that broader reporting changes are on the table for 2026. The biggest developments are the addition of specific boxes for cash tips, Treasury Tipped Occupation Codes, and overtime compensation, along with a higher reporting threshold for many covered payments. While these rules are not final yet, they are substantial enough to put filers on notice that 2026 reporting may look materially different from 2025. Simple comparison table Topic2025 instructions2026 draft instructionsCash tipsNo dedicated reporting boxesAdds Box 1b on 1099-NEC and Box 13a on 1099-MISCTreasury Tipped Occupation CodesNot separately reportedAdds Box 1c on 1099-NEC and Box 13b on 1099-MISCOvertime compensationNo dedicated reporting boxesAdds Box 1d on 1099-NEC and Box 14 on 1099-MISCTotal income treatmentNo special tip/overtime box guidanceTips and overtime still included in Box 1a on 1099-NEC and Box 3 on 1099-MISCReporting threshold$600 framework$2,000 for many covered payments beginning after 2025Address layoutTraditional combined address format  Address fields split into individual entry boxes

Washington Senate Bill 6134 Change Notification Washington Senate Bill 6134 updates the state’s unemployment insurance (UI) law by requiring the Employment Security Department (ESD) to provide clear notice to workers who apply for benefits due to a strike. Specifically, workers must be informed that if they later receive retroactive wages, such as back pay following a strike resolution, for weeks in which they also collected UI benefits, they may be subject to an overpayment determination. The law does not change the state’s authority to recover overpaid benefits but formalizes the requirement that workers be notified of this possibility in advance. It also outlines acceptable methods of delivering this notice, includes a federal conformity provision to ensure continued federal funding and tax credit eligibility, and establishes that this notice requirement will remain in effect through December 31, 2035. Effective Date Immediately Washington SB 6134 Implication to Stakeholders While the primary obligation under this law falls on the state, employers may see increased scrutiny and coordination around strike-related claims and any subsequent retroactive wage payments. If retroactive wages are issued following a strike, those payments could trigger overpayment determinations for impacted employees, potentially leading to administrative follow-up or inquiries involving the employer. This may also influence how claims are adjudicated and how employer accounts are impacted, particularly if benefit payments are later reversed or recovered. Recommended Employer Action Employers should ensure accurate and timely documentation of any strike activity and clearly track any retroactive wage payments made to employees following a labor dispute. It is advisable to coordinate closely with internal payroll and HR teams to ensure consistency in reporting and to respond promptly to any ESD inquiries. Employers may also benefit from reviewing their internal processes for handling strike-related claims to minimize administrative complications and ensure compliance with evolving UI requirements.

Main LD 2101 Change Notification Maine LD 2101 introduces a new financial penalty for employers whose unemployment insurance (UI) payments are returned unpaid under the state’s Employment Security Law. If a payment fails for any reason, such as insufficient funds, a closed or invalid account, or a stop-payment order, the Maine Department of Labor is required to assess a penalty. The penalty will be the greater of $25 or 1% of the unpaid contribution amount. This formalizes a consistent consequence for invalid or rejected UI payments. Effective Date Maine LD 2101 introduces a new financial penalty for employers whose unemployment insurance (UI) payments are returned unpaid under the state’s Employment Security Law. If a payment fails for any reason, such as insufficient funds, a closed or invalid account, or a stop-payment order, the Maine Department of Labor is required to assess a penalty. The penalty will be the greater of $25 or 1% of the unpaid contribution amount. This formalizes a consistent consequence for invalid or rejected UI payments. Main LD 2101 Implication to Stakeholders This change increases the financial and administrative risk associated with errors in UI payment processing. Even inadvertent issues, such as banking errors or timing mismatches, can now result in additional costs. Employers with high contribution volumes or frequent transactions may be particularly exposed, as even small percentage-based penalties can accumulate. Additionally, repeated payment failures could draw increased scrutiny from the state and potentially impact an employer’s compliance standing. Recommended Action Employers should review and strengthen their internal payroll and payment processes to ensure all UI contributions are accurate and successfully processed on the first attempt. This includes verifying bank account information, maintaining sufficient account balances, and coordinating closely with payroll providers or third-party administrators. Implementing internal controls or payment verification steps prior to submission can help prevent avoidable penalties. Regular reconciliation of UI payments and prompt resolution of any rejected transactions will also be critical under this new requirement.

Washington House Bill 2264 Change Notification Washington House Bill 2264 expands the definition of when an employee is considered unemployed “through no fault of their own” for unemployment insurance purposes. Individuals who voluntarily elect to be included in a layoff or workforce reduction, after the employer initiates the process, may still qualify for unemployment benefits. Specifically, if the employer announces a planned reduction in force and an employee volunteers to be part of that reduction, the separation will still be treated as employer-initiated. The law also clarifies that allowing an employee to rescind their offer to be included in the layoff does not impact eligibility, and it excludes situations involving voluntary early retirement incentives or benefit modifications. Effective Date 90 days after adjournment Washington HB 2264 Implication to Stakeholders This change broadens eligibility for unemployment benefits in workforce reduction scenarios, which may lead to an increase in chargeable claims against employer accounts. Even when employees proactively volunteer for separation, these separations will generally be treated as employer-driven if the layoff process was initiated by the employer. As a result, employers may see higher unemployment insurance costs and reduced ability to contest claims on the basis that the separation was voluntary. Recommended Action Employers should review and potentially revise their workforce reduction policies and communication strategies to ensure clarity around layoff processes. It is advisable to carefully document that the employer initiated the reduction and maintain detailed records of all employee communications and decisions. Additionally, employers should anticipate potential increases in unemployment claims tied to voluntary layoff participation and consider incorporating this into workforce planning and cost projections. Consulting with unemployment insurance advisors or legal counsel can also help ensure compliance and effective claim management under the new standard.

California Senate Bill 854 Change Notification This measure updates the California Unemployment Insurance Code to clarify how official notices can be delivered. Specifically, it expands the definition of “mail,” “mailed,” or “mailing” to include not only traditional paper documents sent through the U.S. Postal Service or other carriers, but also electronic communications such as emails or online notifications. Effective Date January 1, 2026 California SB 854 Implication to Stakeholders For employers, this means that important unemployment insurance notices—such as claim determinations, requests for information, or appeal deadlines—may be sent electronically rather than by paper mail. As a result, it is important to regularly monitor any designated email addresses or online accounts to ensure timely responses and avoid missing critical deadlines that could impact claims or your unemployment tax rate. Recommended Action Employers should review and update their internal processes for receiving unemployment insurance communications. This includes confirming that the correct email addresses are on file with the state, regularly monitoring designated inboxes and employer portals, and assigning responsibility to a specific individual or team for timely review and response to all notices. Employers may also want to implement backup monitoring procedures, such as shared inboxes or alerts, to reduce the risk of missed communications that could negatively impact claims outcomes or unemployment tax rates.

For years, many employers treated Form I-9 compliance as routine HR administration. A missing date, an unchecked box, or an incomplete field was often dismissed as a minor clerical issue, something that could be corrected later if an audit ever occurred. That era is over. U.S. Immigration and Customs Enforcement (ICE) has issued updated Form I-9 inspection guidance that significantly redefines what constitutes a substantive violation under Immigration and Nationality Act § 274A. What were once correctable technical errors can now trigger immediate fines, even when every employee is fully authorized to work in the United States. The regulatory shift is subtle on paper but financially serious in practice. What Has Changed: Historically, ICE distinguished between: Technical violations: Minor errors or omissions that employers had 10 business days to correct after notice Substantive violations: Failures that went to the heart of employment eligibility verification and resulted in fines Under ICE’s updated guidance, that line has moved. ICE has reclassified several common Form I-9 mistakes from “technical” to “substantive.” This means: No correction period No grace window Immediate exposure to civil penalties The focus is no longer on intent or outcome, but on strict procedural precision. Errors Newly Reclassified as Substantive Violations The following errors were previously considered technical but are now treated as high-risk, substantive violations that result in immediate fines if identified during an inspection: Section 1 (Employee Information and Attestation) Missing date of birth Failure to date Section 1 Use of the Spanish Form I-9 outside Puerto Rico Section 2 (Employer Review and Verification) Missing date of hire Failure to date Section 2, including the certification date Missing employer or authorized representative title Completion of Section 2 after the three-business-day deadline Supplements and Additional Requirements Preparer/Translator (Supplement A) omissions, including: Missing full name Missing address Missing signature Missing date Missing rehire date in Supplement B ICE now views these omissions as a failure to properly verify employment eligibility, not paperwork oversight. Legible Copy Retention: A Longstanding Exception Eliminated Previously, ICE allowed a “legible copy” exception. If required document details (such as document title, number, or expiration date) were missing from Section 2 but appeared elsewhere on the form or on a clear photocopy, the error was often treated as technical. That exception no longer exists. Under the updated guidance: Missing document titles, numbers, or expiration dates are substantive violations Retained photocopies do not cure incomplete fields Information appearing elsewhere on the form does not mitigate the error In short: if it’s missing from the required field, it’s a violation regardless of supporting documentation. Remote Verification Failures Are Now Substantive ICE has also raised the stakes for employers using DHS-authorized remote document examination (alternative procedures). The following procedural failures are now substantive violations: Failing to check the Alternative Procedure box on Form I-9 Conducting remote verification without being an active E-Verify participant in good standing Even if the documents were reviewed and the employee is authorized, failure to strictly follow DHS procedures invalidates the verification. Newly Classified Technical Violations (10-Day Correction Window Still Applies) ICE has clarified that certain errors remain technical violations, allowing employers a 10-business-day window to correct them after notice: E-Verify Social Security number mismatches Missing employee name on additional pages or supplements Missing “other last names used,” email address, or phone number Missing updated name during reverification in Supplement B While still compliance risks, these errors do not carry the same immediate financial consequences.                What This Means for Employers and Compliance Tools Penalties for Form I-9 paperwork violations are adjusted annually for inflation and currently range from approximately $281 to $2,789 per form. The math escalates quickly. ICE’s updated guidance makes one thing clear: precision is now the standard. For employers, HR teams, and compliance platforms, this means: Validation logic must be updated to reflect new substantive classifications Error categorization must clearly distinguish immediate-risk violations Reporting outputs must align with current ICE enforcement priorities “Good faith” assumptions can no longer substitute for complete and accurate data Automation and AI driven compliance systems must evolve alongside enforcement expectations, or they risk giving false confidence. How to Protect Your Business To reduce exposure under the new standards, employers should take proactive steps now: Conduct Internal I-9 Audits to identify technical errors that can still be corrected before they become substantive liabilities. Train HR and Hiring Managers Purge Old I-9s and retain forms only for 3 years after hire or 1 year after termination, whichever is later. Excess records increase audit risk. Ensure strict compliance with DHS alternative procedures and active E-Verify participation. Form I-9 compliance is no longer about “getting close enough.” A missing date, unchecked box, or incomplete title can now trigger immediate, costly penalties. ICE has made its position clear: small mistakes have big consequences. If your organization or your compliance technology has not yet adjusted to these changes, now is the time. Connect with our experts to learn how you can make the transition to better compliance.

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