What to do when an employee was not onboarded properly? - HR Insights

What to do when an employee was not onboarded? What is an employer’s obligation when they find an employee did not complete required onboarding paperwork?

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Question:

I’m a new HR director, and recently while conducting an audit of our files, I realized that the previous HR director did not have an employee fill out any required onboarding paperwork. They’ve been working for several weeks, accessing client data and submitting expenses, even though they haven’t signed off on any of our policies. What is an employer’s obligation when they find an employee did not complete required onboarding paperwork?

Answer:

Immediately have the employee complete the Form I-9 and W-4.

For the Form I-9, do not backdate the form, clearly state the actual start date and attach a signed and dated explanation of the corrective action taken to ensure compliance. For the form W-4, the IRS states that, until you receive a valid W-4, you should withhold as if they are single with no other entries. For all employer specific but not legally required paperwork, you should have the employee complete it as soon as possible.

Long Answer

This is the situation employers never want to find themselves in. Compliance may not be fun or even easy, but the consequences of non-compliance can be severe. Thankfully, there are some remedies available for employers to take corrective action to bring themselves into compliance.

First, let’s define the scope of the problem. Onboarding paperwork generally contains two types of documents: legally required paperwork, and employer required paperwork. Non-compliance mostly concerns the legally required paperwork, so we’ll focus on that first.

Legally Required Paperwork

The two most important forms an employee needs to fill out are a Form I-9 and a W-4. These forms relate to employment eligibility and tax withholding, respectively. 

The federal government has provided guidance on what to do if an internal audit reveals an I-9 was not completed. The employee must complete an I-9 as soon as possible, and when completing section 2, the employer must clearly state the actual start date; no backdating the form. The employer should attach a signed and dated explanation of the corrective action taken to ensure compliance.

For the W-4, your employee should also complete the form as soon as possible. If they do not complete a W-4 or otherwise give you an invalid W-4, the IRS has published several guidelines relating to such cases. The employee should always be treated as if they are single with no other entries, until the employer receives a valid W-4.

Employer Required Paperwork

While there aren’t any non-compliance penalties for paperwork that is required by the employer, there are still concerns that may come up if an employee doesn’t complete them. If they were to ever be terminated, and the employee filed for wrongful termination, you likely wouldn’t be able to point to any policy or handbook violation as a defense, as the employee did not sign off on them. Because of this, if you find an employee has not completed this paperwork, they should do so as soon as possible.

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What to do when an employee was not onboarded?

Please note: This information is not legal advice and may not reflect specific state or local requirements.