31 JUNE 2025 WorldWide Drilling Resource® Drilling Into Money Not Boring by Mark E. Battersby Workers: Legitimate or Headache Lost in the current publicity of undocumented workers is the fate of those employers who failed to verify the employment and identity of all employees hired. But remember, poor hiring practices aren’t limited to the undocumented. Both the drilling operation and the employee must complete the U.S. Citizenship and Immigration Services (USCIS) “Employment Eligibility Verification” Form I-9. Employers are required to maintain completed Forms I-9 for three years after the hiring date or one year after the employment ends, whichever is later. Keep in mind, for I-9 paperwork violations, the penalties range from $281 to $2789 for the first offense of substantive violations or uncorrected technical errors. Helping avoid or reducing the fines that increasingly result from poor hiring practices, is E-Verify, a web-based system through which employers electronically confirm the employment eligibility of their employees. Administered by the USCIS and Social Security Administration, E-Verify aids employers in confirming the eligibility of employees to work in the U.S. Employers verify the identity and employment eligibility of newly hired employees by electronically matching information given by employees on Form I-9. If E-Verify does not confirm an employee’s eligibility to work in the U.S., an employer can terminate employment with no civil or criminal penalty. Employers face penalties for hiring undocumented workers where civil penalties for a first offense can range from $375 to $1600 per unauthorized worker, depending on the frequency and severity of past violations. A pattern or practice of knowingly hiring undocumented workers can lead to fines of up to $3000 per worker and/or imprisonment for up to six months. Many drilling companies prefer to label workers as independent contractors because they are not subject to minimum wage, overtime pay, or the payroll tax withholding requirements. More often, it is misclassifying workers which leads to trouble and penalties. According to the Internal Revenue Service (IRS), an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done. What matters is the employer has the legal right to control the details of how the services are performed. Avoiding the high cost of misclassification, there is the IRS’s Voluntary Classification Settlement Program (VCSP). VCSP provides partial relief from federal employment taxes for eligible taxpayers who agree to treat workers as employees. Today is a good time to think about the operation’s hiring practices - as they apply to all workers. Mark Mark E. Battersby may be contacted via e-mail to michele@ worldwidedrillingresource.com
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