Here are the top 10 stories of the year, as chosen by our readers.

1. IRS changes W-2 reporting requirement for health benefits

2. EPA says it’s ‘creating jobs’

3. Immigration laws: States get tougher on employers

4. What’s going to happen to employer health coverage in 2014?

5. Labor board gets an earful over pro-union rules

6. 3 lessons every company can learn from the Netflix debacle

7. Congress puts 12 EPA ‘job-killing’ rules on chopping block

8. What do you think of these 3 ideas to create jobs?

9. Why the payroll tax cut may be a bad idea

10. Does being a jerk make you a better boss?

On what issue? Mandatory E-Verify — a hot topic of discussion during the Republican presidential debates.

Tea Party members and liberals have joined forces in fighting a Republican-sponsored bill in Congress that would require all employers to use E-Verify, the electronic government database that verifies whether new hires are eligible to work in the United States.

Passage of the bill in the GOP-controlled House looked like a lock. But then a coalition of varied groups mounted a campaign in Congress to defeat the measure.

Their gripes: The use of E-Verify, which is currently voluntary, would:

• create a national identification system
• infringe on rights such as the freedom to seek work
• cripple small businesses
• turn employers into immigration agents, and
• encourage identity theft.

As you may know, E-Verify works by comparing information entered from an employee’s I-9 employment form with Social Security Administration and Department of Homeland Security records. About 1 in 20 U.S. employers use it. Federal contractors must participate, and a few states also mandate its use.

Related story: Immigration audits rise sharply: What happens if you’re picked?

The advice comes from an employer who tells his story about what happened when federal agents walked in and said, “Let’s see your I-9 forms.” The federal I-9 form is the basic document that verifies employees have legal standing to work in the United States.

First, realize your chances of getting auditing for I-9s have greatly increased over the past few years, since the Obama administration announced that it would shift immigration-enforcement tactics from raiding employers to checking I-9s. The number of audits this year is projected to increase about 20% over last year and probably more than double the number in 2009. And the figure could go higher in 2012.

Among those audited this year was Russ Tappan’s dairying operation in Arizona. Tappan was at a business meeting when he learned of the audit via a message from his office manager: “Two Immigration and Customer Enforcement agents are here.” Here’s what happened next, as Tappan explained to agweb.com.

• The ICE agents’ initial stay lasted only five minutes, during which they explained they’d return in 72 hours expecting to see the company’s I-9s and supporting documentation from the most recent three years. So staffers has three days to pull together the info, including workers no longer with the company. But Tappan’s operation had an ace in the hole. For three years, the company had been enrolled in E-Verify, the federal program employers can use to verify employment eligibility of new hires. The company had also done a self-audit at the same time it enrolled in E-Verify, to uncover and fix flaws in hiring documentation.
• After the initial visit by the ICE agents, the company’s HR and admin staff pulled all I-9s and supporting docs from the prior three years, and made copies that would be handed over when the agents returned.
• And return they did. They scooped up the documents and told the company they’d do a thorough review. About a month later, ICE sent correspondence noting that several employees appeared to be working illegally, and would have to be let go unless the company could come up with documentation showing they had legal standing to work in the United States. (And in fact, further digging showed that at least one employee was “legal” and had been red-flagged because of a paperwork mistake.) The workers who didn’t have proper I-9 backup documentation had to be let go within 10 days.

Advice if you get audited

Based on his experience, Tappan has advice for any employer who gets audited:

• Be cooperative and approachable. Tappan sees this as a two-way street. Employers who are cooperative and cordial receive cooperative and cordial treatment from the ICE agents. There was no atmosphere that the agents were out to “bag” the employer.
• Use E-Verify and do an internal audit, using an immigration attorney if you feel the need. Tappan’s observation: “Immigration is not going to get easier,” so you may as well start now to ensure you’re following the rules to the best of your ability.
• Make sure appropriate staffers know how to complete an I-9. Do your people know what the latest I-9 looks like? Do they also know enough to compare and match signatures, height, weight and age on the forms of identification that employees must submit?

The trend got a boost from the U.S. Supreme Court decision in Chamber of Commerce v. Whiting, which OK’d an Arizona employment-verification law and authorized states to mandate that employers use E-Verify under certain circumstances. Several other states have already followed Arizona’s lead, and more are hopping on board:

• Louisiana’s House of Representatives voted 86-0 to approve House Bill 646. If the bill is approved by the Louisiana Senate and signed by Gov. Bobby Jindal, the law will require all Louisiana employers to use E-Verify to determine an employee’s immigration status. Employers that violate the law would risk the suspension or revocation of their business licenses, in addition to civil penalties. For a first violation, the penalty would be no more that $250 for each alien employed, hired, recruited, or referred in violation of the law. For a second violation, the State would immediately suspend the employer’s business license for not less than 10 days. The State would also assess a fine of not more than $500 for each alien employed, hired, recruited or referred in violation of the law. For a third violation, the State would permanently revoke the employer’s business license and assess a fine of not more than $1,000 for each alien employed, hired, recruited, or referred in violation of the law.
• Tennessee passed the Tennessee Lawful Employment Act, signed by Governor Bill Haslam, which requires employers to use the E-Verify program, with a few exceptions, by January 1, 2012. The new law requires employers to enroll in E-Verify, verify the work authorization status of a new employee using the E-Verify program, and maintain a record of any results generated by the E-Verify program for that particular employee. As an exception, the law does allow employers to bypass E-Verify and instead require various types of documentation from the employee, such as a birth certificate or certification of citizenship or naturalization.
• Alabama passed the Beason-Hammon Alabama Taxpayer and Citizen Protection Act. It (1) requires Alabama businesses to participate in E-Verify no later than April 1, 2012, to confirm the work authorization of new hires; (2) prohibits employers from terminating or refusing to hire a U.S. citizen or work-authorized individual while retaining or hiring an individual that the employer knows or reasonably should have known was unauthorized; (3) disallows as a business deduction any wage or compensation paid to an unauthorized alien; and (4) makes it a crime to knowingly transport or harbor an individual who is not lawfully present in the U.S. The law adds even tougher requirements for firms that sign contracts to provide goods or services to the state.

They’re back. Stung by the failure to pass the Employee Free Choice Act, unions are taking a new approach to sign up more workers: “We’ll protect you from unfair immigration laws.”

The latest union campaign feeds off the recent passage of Arizona’s law that allows law enforcement officers to detain anyone they have “reasonable suspicion” of being an illegal alien. Union recruiters are using the law to underscore two points to non-union workers:

1. When your state passes a similar law, the union will be there to protect you and your job from overzealous police.
2. Employers will prey on your fears by paying you less and giving you fewer benefits.

What’s really behind the push are raw numbers depicting current union membership nationwide (according the U.S. Bureau of Labor Statistics): Hispanics, at 10%, make up the lowest segment of union membership but also make up the fastest growing group of worker in the U.S. Thus, a potential large labor pool  — Hispanics — aren’t union members, and union organizers have taken notice.

Arizona, where the immigration law just passed, is a good example. Employment law attorneys there, speaking to the Phoenix Business Journal, report that they’re seeing stepped-up union recruiting that plays on worker fears about the law.

How can employers respond?

• Make sure your company’s I-9 forms and other employment-verification data are up to date and accurate,
• Educate employees about the company’s commitment to its workers.
• Educate workers about laws that cover immigration and employment. The more workers know, the less they’ll have to fear.

Interesting note: Most unions don’t require members to prove their legal immigration status.

The problem facing factories, power plants and eventually small businesses is that if Congress fails to adopt some sort of climate change bill, EPA will regulate GHG emissions, starting with carbon dioxide.

Key point: The Obama administration is willing to limit EPA’s authority to regulate GHGs in exchange for creating a national cap-and-trade emission system that reduces climate changing pollutant releases.

But this limit on EPA is contingent on getting a cap-and-trade program adopted — this year — and before the 2010 election season kicks in.

Senator Lindsey Graham (R-SC) has been working with Sens. John Kerry (D-MA) and Joe Lieberman (I-CT) to write a Senate bill that would replace EPA regulations with a limited cap-and-trade program. The tri-partisan bill would also promote offshore oil and natural gas exploration and new nuclear power plant constructions. Details were supposed to have been revealed April 26.

The widely expected new Senate proposal was so expected that EPA chief Lisa Jackson was booked on The Daily Show with Jon Stewart to discuss the new approach.

However, the sudden spike in interest to revive the immigration debate might have killed momentum for the Graham/Kerry/Lieberman plan.

Graham was so annoyed that the Obama administration is giving immigration a higher priority than climate change legislation, that he pulled out of the cap-and-trade negotiation. That left Jackson and Stewart with nothing to discuss.

However, Jackson did reiterate that the administration’s key goal is to establish a price on carbon.

The notices kick off the first round of inspections for 2010, after U.S. Immigration and Customs Enforcement officers conducted 1,652 inspections in the last six months of 2009. The most recent notices went to employers in Alabama, Arkansas, Louisiana, Mississippi and Tennessee. Employers who receive a notices have three days to get their I-9 documentation in order for federal inspectors.

The fines for faulty documentation run from $100 to $1,100 per violation.

Note to HR and Payroll directors: Inspectors will be looking at paperwork for “recently separated” workers, as well as current employees. So make sure you have appropriate documents for employees who’ve left in the last few months.

In a fact sheet released April 30, the new administration’s DHS announced: “Effective immediately, ICE [Immigrations and Customs Enforcement] will focus its resources … on the criminal prosecution of employers who knowingly hire illegal workers.”

Of the 6,000 arrests made in 2008, 135 were top management officials for employers hiring illegals — a ratio the DHS now feels is much too low.

Does this mean companies need to do anything differently? No — they should just continue rigorously following all hiring laws.

Nothing in the law is changing — just the way the law is enforced. According to the fact sheet, ICE use “all available civil and administrative tools, including fines and debarment, to penalize and deter illegal employment.”