Firm News & Events

Updates to Form I-9 Enforcement Policy

by Alyssa C. Matsuhara

May 8, 2026

Question: I heard that U.S. Immigration and Customs Enforcement (ICE) recently revised its enforcement policy for Form I-9, the employment eligibility verification form.  As an employer, what do I need to know about the new enforcement policy?

Answer: ICE recently revised its enforcement policy on Form I-9 to reclassify several common technical errors as “substantive” violations, which ultimately increases the risk of employer penalties.

Every employer, regardless of size, must complete Form I-9 each time they hire an individual to perform labor or services in the United States in return for wages or other remuneration (e.g., food or lodging).  Employers must provide applicants with the entire Form I-9, including instructions and List of Acceptable Documents.  The I-9 process should occur after a conditional job offer has been made and before the applicant starts work.

Form I-9s and supporting documentation may be inspected by federal immigration agencies.  Normally, the inspecting agency will give employers a minimum of three (3) business days’ notice before starting an inspection.  Under California law, employers must provide employees with notices before and after the inspection.

The inspecting agency will generally request that the employer provide the I-9 forms and supporting documentation, which may include, but is not limited to, a copy of the employer’s payroll, a list of active and terminated employees, articles of incorporation, and business licenses.

If the inspecting agency finds technical or procedural violations, the employer will receive at least 10 business days to make corrections.  However, substantive violations do not have a cure period.  An employer may receive a monetary fine for all substantive violations and uncorrected technical or procedural failures.

The new inspection policy reclassifies certain violations from technical to substantive.  This  change effectively eliminates the 10-day cure period for many common and procedural errors.

Examples of substantive violations now include:

• Missing birthdates, hire dates, or signatures in Section 1, which pertains to employee information and attestations.
• Failing to record document titles, numbers, or expiration dates (even if a copy of the eligibility document is attached to the form) in Section 2, which pertains to the employer’s review and verification.
• Missing employer name, title, or business address in Section 2.
• Failing to check the “alternative procedure” box when using remote verification or using remote review without being an E-Verify participant.
• Failing to provide a rehire date or missing employer signatures on Supplement B, which is used for reverifications and rehires.
• Using the Spanish-language Form I-9 for employees outside of Puerto Rico.

Examples of technical violations, which may result in fines if uncorrected after the inspection, include:

• Failing to use the version of the Form I-9 that is current at the time the form is initially completed.
• Failing to record the employee’s complete name in Section 2.
• Failing to record the employee’s complete name in Supplement A or Supplement B.

The new inspection policy with expanded substantive violations means that employers have a higher risk of financial penalties for noncompliance.  These financial penalties can range from $288 to $2,861 per violation.

The I-9 process can be cumbersome.  Employers should carefully review the new ICE inspection policy and consider conducting an internal audit of their I-9 practices to ensure compliance with the law to avoid financial penalties.

Employers with questions about the Form I-9 and employment verification process may wish to consult with their labor counsel.

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Update Workplace Violence Prevention Plan

by Fenton & Keller

April 24, 2026

Question: I have a workplace violence prevention plan, but I have not updated or reviewed it since I created it in 2024.  Do I need to review my workplace violence prevention plan each year?

Answer: Yes, employers in California are required to review their workplace violence prevention plan annually, when a deficiency is observed or becomes apparent, or after a workplace violence incident. 

Starting in July 2024, all employers are required to create and implement a workplace violence prevention plan.  A workplace violence prevention plan is a policy that identifies the potential violence all employees are susceptible to, and potential violence employees are susceptible to because of their specific job.  A workplace violence prevention plan outlines basic protocols on how the employer and its employees will prevent and protect employees from experiencing violence in the workplace.  It also includes protocols on how employees should report and respond to incidents of workplace violence.

Employers are required to provide annual training and review their workplace violence prevention plan annually, when a deficiency is observed or becomes apparent, and after a workplace violence incident.  This encourages employers to amend their workplace violence prevention plan to improve preventative measures or reaction protocols.  However, this also means that even if a workplace is free of workplace violence for a year, an employer is still obligated to review their workplace violence prevention plan.  This review will give an employer an opportunity to review the types of workplace violence with their employees, which are:

Type 1: Violence committed by a person who has no legitimate business at the worksite, and includes violent acts by anyone who enters the workplace or approaches workers with the intent to commit a crime.

Type 2: Violence directed at employees by customers, clients, patients, students, inmates, or visitors;

Type 3: Violence committed against an employee by a present or former employee, supervisor, or manager; and

Type 4: Violence committed in the workplace by a person who does not work there, but has or is known to have had a personal relationship with an employee.

A workplace violence prevention plan is intended to be a living document that is amended when employees experience workplace violence or identify potential workplace violence.  A review of a workplace violence prevention plan is a great opportunity to ensure that your workplace violence prevention plan has current and correct contact information and has all the information required by law.  Some of the required information includes:

• Names and job titles of the persons responsible in charge of implementing and enforcing the plan;
• Procedures that allow employees’ active involvement in creating, implementing, and amending the plan;
• Procedures on how an employee will report workplace violence and how the employer will respond to an incident of workplace violence;
• Details regarding workplace violence prevention plan training;
• The four types of workplace violence; and
• A policy that prohibits retaliation against employees that report any type of workplace violence.

An annual training and review will give the employer the opportunity to train new employees and retrain all employees on how to report and respond to workplace violence.  It also gives employees the opportunity to identify potential workplace violence and collaborate with employers on how to implement protocols to prevent potential or recuring workplace violence.

If an employer is interested in creating, updating, or improving their workplace violence prevention plan, they may contact their local labor and employment attorney.

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Potential Mileage Tax and Employer Reimbursements

by Emmanuel P. Jimenez

April 10, 2026

Question: I heard that California is considering passing a mileage tax. Is that true? If it did, would I have to reimburse my employees for the tax?

Answer: No, the Legislature isn’t currently considering a mileage tax—although there is a proposal to study whether one should be enacted.  If such a tax is enacted, however, employers would likely need to reimburse their employees for the tax.   

For starters, a proposed mileage tax is not currently pending in the state Legislature.  However, the Legislature is actively considering whether one should be enacted in the near future.  Assembly Bill 1424 (AB 1421) proposes to direct the California Transportation Commission (CTC) to evaluate whether a mileage tax system can serve as an alternative to California’s current gas tax.  The CTC would be required to evaluate whether a mileage tax could replace California’s gas tax and, by January 1, 2027, would make a recommendation regarding whether the state should pass a mileage tax.  So, while a mileage tax isn’t imminent, it could be on the horizon for California taxpayers, and employers, in the next several years.

If enacted, one chief impact for employers would be reimbursements.  Labor Code section 2802 requires employers to indemnify employees for “all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.”  Put another way, employers must reimburse any reasonable costs employees incur while performing their job.  The Legislature enacted section 2802 to ensure that employers do not shift the costs of doing business onto their employees.

California courts have adopted a very broad interpretation of section 2802.  The most common example is that employers must reimburse employees for the business-related use of their personal cars.  Employers do this by either paying the employee’s actual expenses—which requires detailed tracking—or paying a reasonable per-mile rate. Similarly, employers must reimburse employees for the business-related use of an employee’s personal cellphone, even if the employee has an unlimited data plan and incurs no out-of-pocket cost.

If a mileage tax were passed, employers would potentially be required to reimburse employees for the entirety of that cost, at least for business-related driving.  The mileage tax would be a direct, government-imposed cost that is incurred during the performance of a specific task: driving.  As long as the driving were work-related, the mileage tax paid by an employee would likely count as a “necessary expenditure” that was incurred “in direct consequence” of performing the employee’s job duties.  So, an employer would potentially be liable for the entirety of the mileage tax.

This could represent a significant, and complex, new cost for employers.  Given California’s size, long commutes are common.  And the rule between reimbursable and non-reimbursable travel can be complicated.  For example, an employee’s primary home-to-work commute is not reimbursable. But travel to an alternate location (e.g., temporary worksite or client meeting) is potentially reimbursable.  Similarly, for workers with no fixed office, travel from their home to their first worksite is typically reimbursable.

Employers should keep a close eye on AB 1421 as it moves through the Legislature. Even a modest mileage tax could mean substantial new costs for employers—and potential liability for misclassifying reimbursable travel.  Employers with questions about AB 1421 or general questions about employee reimbursements should contact their labor counsel.

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Requirements for Tip Pooling Arrangements

by Marco A. Lucido

March 27, 2026

Q: I run a small restaurant, and I want to make sure that everyone is rewarded equally for their hard work. Can I ask my tipped employees to share part of their tips with other employees?

A: Yes, but you need to follow some important guidelines and be aware of the limitations. The practice of requiring employees to share their tips in previously agreed percentages is commonly known as a mandatory “tip pool.”  In California, employers can require employees to participate in a tip pool if the pool meets certain conditions.  These conditions are:

• Tipped employees should generally not be asked to contribute more than 15% of their tips to the tip pool;
• Owners and supervisors should not be allowed to participate in any portion of the tip pool;
• Tip pool participants should be limited to those employees who contribute in the “chain of service”; and
• The money from the tip pool must be distributed to the eligible employees in the “chain of service” based on the number of hours they worked.

Sometimes, the most difficult requirement to navigate is the requirement to limit the tip pool participants to employees in the “chain of service.”  This is because employers often want to allow back of the house employees such as chefs, cooks, and dishwashers to participate in the tip pool.  Historically, the Labor Commissioner’s position is that only front of the house employees who provide direct table service can participate in a tip pool.  In a 2005 Opinion Letter, the Labor Commissioner indicated that in the restaurant industry employees in the “chain of service” include “waitpersons, buspersons, bartenders, hostesses, wine stewards and ‘front room’ chefs.”  Though the Labor Commissioner excluded back of the house employees from this list, it acknowledged that industry standards are likely to evolve over time.

At least one court has identified that standards have evolved.  In 2009, a California Court of Appeal disregarded the 2005 Opinion Letter and expanded the types of employees who may participate in a tip pool.  Specifically, the court held that back of the house kitchen staff may legally participate in a tip pool because they are part of the “chain of service.”  The court reasoned that a customer’s experience is not limited to employees the customer can see and that the amount a customer tips may depend on the customer’s satisfaction with the food.  This decision supports an employer’s ability to include kitchen staff in a valid tip pooling policy, especially when chefs or cooks are visible or interact with customers.

Employers should be aware that the Labor Commissioner has not yet revised its general guidance that only front of the house employees who provide direct table service can participate in a tip pool.  Given this apparent conflict in authority, restaurant employers who are risk averse should continue to limit tip pools to front of the house staff only.

The central theme in the guidelines for tip pools is that the pool be reasonable in terms of its funding and participation.  This is a case-by-case analysis based on the division of duties at each restaurant and should be analyzed carefully.  Though it is not a requirement, it is recommended that employers with tip pooling arrangements create a written tip pooling policy that is signed by each participant.

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