Immigration and Employment Law Considerations for Cooperatives
It is important for immigrant owned cooperatives, who have mixed status members, to understand how certain immigration and employment laws could impact folks without work authorization.
The I-9 Requirement prohibits businesses from employing people they know do not have work authorization
To enforce this law, employers must fill out an I-9 for every employee, and keep the paperwork on file for possible inspection. The I-9 requires the employee to give information that proves they are authorized to be employed in the United States.
Who enforces the I-9 requirement?
- ICE: Immigration and Customs Enforcement
- Part of Department of Homeland Security.
- ICE audits employers’ I-9 Forms, and if violations found, gives the employer notice of intent to fine.
- OCAHO: Office of the Chief Administrative Hearing Officer
- If ICE finds a violation then the employer can file a request for a hearing before the OCAHO (part of Department of Justice, Executive Office for Immigration Review).
I-9s are not required for:
- Independent Contractors
- Under immigration law an “independent contractor” is someone who:
- Carry on an independent business.
- Contracted to do a piece of work according to their own means and methods, and
- Subject to control only as to results
- This still poses a risk because it is unlawful to “knowingly” hire an independent contractor who does not have work authorization in the United States.
- A way to lessen this risk is to create a separate business entity, like an LLC. Then the independent contractor, or a group of independent contractors, becomes owners of the entity. That way, there’s an additional layer of anonymity, since the clients will sign service contracts with the entity, and not with the independent contractors themselves.
- Under immigration law an “independent contractor” is someone who:
- Business Owners
- Under immigration law a “business owner” is someone who:
- Owns a share/equity interest
- Shares in the profit and loss
- Has control over the direction of the company
- Cannot easily be hired/fired/disciplined
- Participates in the decision to set their own pay
- Under immigration law a “business owner” is someone who:
Cooperative members in an LLC cooperative have the ability to (legally) resist I-9 requirements imposed on employees.
If your cooperative is an LLC, and all of the LLC owners also manage the LLC, then none of the LLC owners are employees and none of them need to fill out an I-9. To avoid the I-9 requirement all of the owners of the LLC need to also take part in the management. Any owner who just works for the LLC but doesn’t participate in management, is an employee of the LLC and needs to fill out I-9. If you register your cooperative business as a corporation or cooperative corporation, everyone who works for the business is also an employee and needs to fill out an I-9.
Complying with Compensation and Time-off Laws as a Cooperative
Complying with Compensation and Time-off Laws Being an employer comes with a lot of responsibility – both to employees and to the government. Now that you’ve figured out who the employees are, it is important to understand how to comply with compensation and time-off laws. Complying with Compensation and Overtime Laws Paying Minimum Wage Wage
