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The number of states requiring private employers to use E-Verify — the federal web-based system used to verify employment eligibility — is expanding, as Florida’s governor signed Senate Bill 1718 on May 10, 2023. The legislation includes provisions impacting private employers with 25 or more employees. Some provisions of the expanded law go into effect July 1, 2023, while other provisions have different effective dates.

Currently under Florida Labor Statute XXXI, the state requires private employers to verify an individual’s eligibility for employment after an offer has been accepted, using either the E-Verify system or by requiring the employer to retain copies of the same documents presented to complete Form I-9. That statute, which took effect Jan. 1, 2021, also requires the use of the E-Verify system for all public employers, contractors, and subcontractors.

What Is E-Verify?

E-Verify is a federal government program available since the mid-1990s to employers to verify employment eligibility of newly hired employees. The system is designed to help mitigate the risk of hiring and employing individuals who are not authorized to work in the United States. Certain federal contractors are required to use the system, and since the 1990s and mostly in the past decade, 23 states and localities have adopted legislation that mandates the use of E-Verify for certain employers.

E-Verify is available, however, for any employer to utilize voluntarily.

The E-Verify system compares information from an employee’s completed Form I-9 with records available to the U.S. Department of Homeland Security and the Social Security Administration. Form I-9 — the federal form used to verify the identity and employment authorization of individuals hired to work in the U.S. — includes multiple sections. Employees must complete every field in Section I (bullets below), with the exception of their telephone number, email-address, and social security number.

• Name
• Address
• Date of birth

However, if the employer participates in E-Verify, employees must provide their social security number.

E-Verify is designed to provide real-time results that enable employers to know if an individual is eligible for employment in the United States. If there is information that does not match, the employer and employee are provided with details on how to resolve the situation.

States Requiring All or Most Employers To Use E-Verify

The states that require all or most employers in their state to use E-Verify are Alabama, Arizona, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Utah. Florida joins this list on July 1, 2023, when it will mandate the use of E-Verify for private employers with 25 or more employees.

While certain public and private employers and government contractor might be required to use the E-Verify system under applicable law, any business in any state may use the system to verify new hires voluntarily.

However, employers should discuss with legal counsel whether they would want to do so voluntarily.

Are Public Employers Required to Use E-Verify?

In addition to Florida, there are also some states, counties, and cities that require public employers and employers with government contracts to utilize E-Verify. Under a presidential Executive Order, certain federal contractors in every state, as well as their subcontractors, are required to use E-Verify under the Federal Acquisition Regulation (FAR). Exemptions and exceptions to this requirement can be found on the E-Verify website.

What Florida Employers Should Know About Senate Bill 1718

Employers covered under the new Florida law (SB 1718) must comply with the federal requirements of the E-Verify system for newly hired employees (not independent contractors) beginning July 1, 2023. Compliance with the E-Verify system prohibits employers from creating cases for employees hired before the employer enrolled in E-Verify.

The following, although not inclusive of every requirement, are just a few of the obligations employers have once an employee is hired. The E-Verify website has more details about your requirements.

• Employers have three days after the first day a new hire begins work to create a case in E-Verify to confirm the employee’s employment eligibility.
• If an employer is unable to gain access to the E-Verify system in those first three business days after a new hire, the employer must retain proof of inaccessibility (e.g., a screenshot of each day the system could not be accessed, an announcement that the system was unavailable).

Employers are also subject to recordkeeping obligations under Senate Bill 1718 that include retaining copies of the documentation presented by the newly hired employee when completing Form I-9 along with any official verification generated from the E-Verify process.

Additional employer compliance requirements under the Florida legislation include certification on its initial return each calendar year of the Re-employment Tax Return.

An employer who voluntarily uses E-Verify and wishes to document usage of the system may also make a certification on its first return each calendar year.

What Are the Penalties for Non-Compliance with Florida’s Senate Bill 1718?

Starting July 1, 2024, enforcement will begin for covered employers. If an employer fails to use the E-Verify system to verify the identity and work authorization of each new hire, the employer will be notified of a determination of noncompliance by the Department of Economic Opportunity and will have 30 days after notification to cure this noncompliance.

Penalties might be assessed for employers who fail to use the E-Verify system three times in any 24-month period. This:

• Might result in fines of up to $1,000 per day until sufficient proof of compliance is provided.
• Could result in suspension or revocation of licenses such as a franchise, permit, certification, registration, charter, or similar form of authorization required by law.
  • The number of days such licenses will be suspended varies with the number of unauthorized individuals employed.

Additional provisions and penalties can be found in the legislation.

A series of co-mingled laws dating back to the earliest days of the COVID-19 pandemic in March 2020 provided billions of dollars in aid that included funding to help finance the requirement for certain employers to offer emergency paid sick and emergency family and medical leave — and later credit for qualified employers who voluntarily offered this coverage.

The end of the National Public Health Emergency resulted in the end of these requirements for certain employers to offer the emergency leaves. What remains now for businesses still trying to recover from the negative financial impact of the pandemic is the potential to claim payroll tax credits if they were eligible but did not claim these credits previously or if they need to adjust the amounts they claimed.

Note: These tax credits need to be reconciled with other tax credits and government funding to ensure that no double-dipping takes place, which includes any tax credits/amounts already claimed and received for Paycheck Protection promise (PPP) loan forgiveness and the employee retention tax credit.

It’s important to understand the framework of leave and associated credit for any employer who needs to amend any prior quarter’s Form 941 in 2020 and 2021 to claim or adjust the credit, so it is done accurately. This requires the use of Form 941-x.

Tax Credits Under Family First Coronavirus Response Act

The Families First Coronavirus Response Act (FFCRA) originally offered payroll tax credits to American private employers with fewer than 500 employees to offset the costs of the requirement to provide employees with qualifying paid leave for specified reasons related to COVID-19. When that mandate sunset at the end of 2020, the American Rescue Plan Act (ARPA) extended and expanded the payroll tax credits, allowing covered employers to take the credits until Sept. 30, 2021, if they voluntarily provided employee paid leave under the FFCRA framework.

However, the credit could be impacted by state and local COVID-19 leave requirements and the interaction with the requirements under FFCRA. Plus, an employer could only qualify for the federal tax credit if the leave met the requirement of the original FFCRA mandate.

It should be noted that the credit cannot be claimed by private employers with 500-plus employers even if they offered comparable leave.

The following highlights the changes under ARPA and delineates by date because if you plan to claim the credit on payroll taxes paid through March 31, 2021, or after April 1, 2021, there are different requirements.

What is the Purpose of the Tax Credits?

Employers who provided employees with qualified paid leave related to COVID-19 that fell under the Emergency Paid Sick Leave Act (EPSLA) and/or the Emergency Family and Medical Leave Expansion Act (EFMLEA) can receive tax credits to reimburse 100 percent of leave wages paid.

April 1, 2020 through March 31, 2021

Generally, American private employers with fewer than 500 employees were eligible to claim the credits. Self-employed individuals could have claimed the family leave credit for up to 50 days.

April 1, 2021 through Sept. 30, 2021

In addition to private employers, healthcare providers and certain governmental and state/local employers became eligible to claim the credit under the same requirements. The limit on the family leave credit for self-employed individuals increased to 60 days.

Under ARPA, new non-discrimination rules also were established that apply to the credit for either leave, disallowing a credit for any employer who discriminates in favor of highly compensated employees, full-time employees or employees based on employment tenure.

Calculation of Maximum Hours

April 1, 2020 through March 31, 2021

• Full-time employees were entitled to 80 hours of leave under the EPSLA if they were normally scheduled to work at least 40 hours each workweek.
• Part-time employees who worked less than 40 hours per week were entitled to EPSL in the amount up to the number of hours that an employee works, on average, over a two-week period.

The U.S. DOL included additional guidance in its Temporary Final Rule for the calculation of maximum EPSL if a traditional weekly schedule does not exist or if a schedule varies.

Under the EFMLEA, calculate hours of leave based on the number of hours the employee is normally scheduled to work. If the normal hours scheduled are unknown, or if the part-time employee’s schedule varies, you may use a six-month average to calculate the average daily hours.

April 1, 2021 through Sept. 30, 2021

The maximum number of days for which qualified sick leave wages could be paid and the number allowed for an employer to get a credit would be reset to 10 days. Hours were calculated as noted above. However, employees couldn’t carry over unused hours. If an employer chose to provide leave under the EPSLA or EFMLEA, they would be eligible to claim the credit again.

What Are the Qualifying Reasons for Taking Leave?

April 1, 2020 through March 31, 2021

An employee qualified for EPSL if they were unable to work (including unable to telework) related to COVID-19 because the employee:

1. Was subject to a federal, state, or local quarantine or isolation order
2. Had been advised by a healthcare provider to self-quarantine
3. Was experiencing COVID-19 symptoms and is seeking a medical diagnosis
4. Was caring for an individual subject to an order (described in 1) or self-quarantine (described in 2)
5. Was caring for his or her child whose school or place of care is closed (or childcare provider is unavailable)
6. Was experiencing any other substantially similar condition specified by the U.S. Department of Health and Human Services

Part-time employees would generally have been eligible for Emergency Paid Sick Leave in an amount equivalent to their regularly schedule hours for a two-week period.

Under the EFMLEA, an employee would have only qualified for leave under No. 5 above.

April 1, 2021 through Sept. 30, 2021

The American Rescue Plan Act changed leave under the EFMLEA. Employees qualified for all six reasons to take leave that was available under the EPSLA, plus both leaves gained additional reasons under No. 3 (above), as follows:

• Employers could have claimed the credit for sick leave wages paid for employees taking leave while they awaited the results of a diagnostic test for COVID-19 after being exposed to the virus or because their employer requested the test.
• Leave taken for the employee to obtain a COVID-19 vaccine or to recover from any health issues resulting from the vaccine.

What Are the Wage Calculations for Paid Sick Leave?

Employees were to be paid based on:

• For reasons Nos. 1 to 3 above, the higher of the employee's regular rate of pay, or the applicable state or federal minimum wage, up to $511 per day
• For reasons Nos. 4 to 6 above, the higher of 2/3rds of the employee's regular rate of pay, or the applicable state or federal minimum wage, up to $200 per day

What Should Businesses Know About the EPSLA?

The American Rescue Plan Act of 2021 changed some of the provisions of the FFCRA, including the reallocation of which portion of the credit is non-refundable. The amount of the credit stayed the same.

April 1, 2020 through March 31, 2021

• If the credit exceeded the employer’s total liability of the portion of Social Security in any calendar quarter, the excess was refundable to the employer.

April 1, 2021 through Sept. 30, 2021

• If the credit exceeded the employer’s total liability of the portion of Medicare in any calendar quarter, the excess is refundable to the employer.

Additional changes included:

• The credit increased by the cost of the employer’s qualified health plan expenses and by the certain employer’s collectively bargained contributions to a defined benefit pension plan and certain amounts of collectively bargained apprenticeship program contributions.

Paid sick time provided under this Act was not preempted by other federal, state, or local laws. The IRS created FAQs that provide an overview of the tax credits.

What Should Businesses Know About the EFMLEA?

Under the EFMLEA:

Through March 31, 2021

An eligible employee qualifies for leave for caring for his or her child whose school or place of care is closed (or childcare provider is unavailable) would be paid by their employer after the first 10 days of leave at a rate of not less than two-thirds of their current rate of pay for the number of hours the employee would otherwise be scheduled to work, up to a maximum of $200 per day or an aggregate of $10,000, for up to 12 weeks in a 12-month period.

April 1, 2021 through Sept. 30, 2021

Other changes under ARPA are an increase in the maximum aggregate amount to $12,000 for up to 12 weeks in a 12-month period and the expansion of eligibility to include employers of healthcare workers and emergency responders

Recordkeeping

Employers must retain documents and information regarding leave for a period of four years, regardless of whether the decision was made to grant or deny the request for leave.

For tax credit purposes, the U.S. DOL requires employers to maintain the following for four years:

• Documentation to show how the employer determined how much paid leave the employee was eligible for (e.g., records of work performed, telework, and paid leave credits)
• Documentation to show how the employer determined the amount of qualified health plan expenses that were allocated to wages.
• Copies of any completed IRS Forms 7200 and 941 that the employer submitted to the IRS (or provided to a third-party payer to meet an employer’s employment tax obligations).

How Paychex Can Help

The passage of multiple laws created complexities for businesses owners who want to take advantage of the paid leave tax credits. However, employers must review their obligations under existing state and local COVID-19 leave laws, as well as any other federal, state or local laws related to an employee’s right to leave.

This is a good time to re-evaluate your HR needs. Consider how our HR Services, tax services and payroll solutions could save you time by helping alleviate extra work and the potential risk of non-compliance.

Implementing a formal onboarding process is a key part of enhancing employee retention and productivity. Onboarding can help new hires adjust to their jobs more quickly, acquire many of the skills and the knowledge needed to contribute to the organization, and get up to speed on the social and performance elements of their new positions. Read on to learn more about the importance of onboarding and what it takes to implement a solid employee onboarding process at your business.

The First Six Months: Establishing a Formal Employee Onboarding Process

The first six months can be critical for a new employee as they form impressions that can impact retention and performance. Establishing a clear, formal onboarding process can set each new employee up for success by helping them navigate the company environment and understand what it takes to succeed in their new position. A formal onboarding and orientation process may include written materials, orientation courses and presentations from HR and managers, meetings with internal stakeholders, shadowing and training, and ongoing mentorship.

Why Is Onboarding Important?

In a competitive hiring landscape, it's important to take steps to make a great first impression and focus on how the business welcomes new hires. From the time an offer is extended until the day the new hire becomes fully productive, the employee onboarding experience can lay the foundation for long-term success.

Here's a closer look at some reasons why having a formal employee onboarding process is important.

Helps Communicate Cultural Norms

Each business has its own organizational culture. The earlier an employee understands what is expected of them and what it takes to succeed within the organization, the more likely they are to become a productive and satisfied employee. Communicating cultural norms can include sharing written, formal policies, and explaining why they are important and how they're enforced. It may also involve explaining the organizational structure, outlining internal processes and communications protocols, and ensuring that the employee understands what steps they can take to approach specific challenges. Finally, successful onboarding also requires communicating the intangible factors of the work environment.

Shortens the Time to Productivity

Conventional wisdom suggests that it takes weeks or months for an employee to get up to speed in a new position. But thorough onboarding programs can drastically reduce the time to productivity. One of the most important aspects of this is communicating the responsibilities of the position, the expectations and metrics for success, the reporting lines, and processes associated with the position. One-on-one time with the employee's manager to answer questions can help the employee understand their role as part of the big picture, and providing necessary training can also help increase productivity earlier in employment. Spending time explaining team dynamics, team processes, and norms of communication is another way to underscore employee success.

Fulfills Brand Promise and Differentiation

Your onboarding process should help give employees the tools and knowledge needed to represent the business. Best practices would include communicating these values and unique selling points. Provide clear examples of how each position would represent these values as part of their role, from a vice president of sales interacting with key clients to an assistant representing the brand on the phone. Finally, site visits or themed presentations that show successful examples of company branding can reinforce these points.

Supports Training, Development, and Performance

As your company develops an onboarding program, it should include both standardized components and specialized adaptations for individual employees and positions. Your onboarding process should have the flexibility to provide specialized training to help each employee succeed in their specific position. In addition, consider building in support that provides a development plan incorporating mentorship, future training opportunities, and growth assignments. Managers, mentors, and HR staff can then support employees as they grow.

Reduces New Employee Turnover

With quit rates reaching record levels, many businesses continue to struggle to provide a positive employee experience. The Bureau of Labor Statistics (BLS) revealed that the nationwide quit rate was 2.6 percent or about 4 million individuals in February 2023, one of the highest rates since 2000 when BLS first collected this data. And according to the Society for Human Resource Management (SHRM), employee turnover can be as much as 50 percent in the first four months of employment.

These statistics support the idea that the risk of employee turnover can be present even during a new hire's first days and months. Many HR leaders understand this and have identified the importance of having a new-hire onboarding process. According to the 2022 Paychex Pulse of HR Survey, 35 percent of HR leaders said focusing on the onboarding process to help new hires feel engaged and be productive as soon as possible works best when it comes to fostering overall employee engagement.

Acclimates New Hires

Part of a successful onboarding process includes providing new hires with information about your industry, business history, and big-picture strategy. They should also become acclimated to your culture, values, and the people they'll be working with. As part of this introduction process, allow employees to reflect on their own background, values and strengths, and career aspirations. Then empower them to contribute to their role and place in the company, identify potential growth opportunities, and provide them with the resources and information they need to be successful.

Encourages Employee Engagement

Taking a concerted approach to acclimating new hires also aids in employee engagement. Consider establishing onboarding programs that account for factors such as the unique ways each new hire may like to learn. Successful onboarding programs embrace a variety of learning methods and resources (video, interactive elements, webinars, apps, animation, etc.) that promote greater interest and engagement. Shadowing team members or establishing mentoring programs can also offer real-life information that you can't capture in new-hire materials. When new employees can take what they've learned and apply it to the actual workspace, it increases their sense of comfort and builds confidence in their ability to contribute to a new work environment.

Assists With Recruiting

A positive onboarding experience can increase word of mouth to future candidates and boost an employer’s reputation as a great place to work. During onboarding, allocate time for new hires to begin forming a solid relationship with their manager, create opportunities for new hires to meet colleagues from around the business, and build on the interactions they had during the recruiting process.

Begin or Improve Your Employee Onboarding Process Today

When you take the time to recruit and hire high-quality talent, it's important that you also acclimate them to their jobs and the business in engaging and effective ways. Learn more about how you can streamline the onboarding process to help new hires get up and running more efficiently with Paychex.