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There's way too much information/context missing here for anyone to give you a straight answer on the legality of this case. It sounds like a very specific situation but you either left out the specifics, or weren't provided them - if it's the latter, it's probably because you aren't supposed/privy to know. It could be anything from a protected identity, refugee status, or something shady as you seem to believe. If you're that worried, why not ask the HR manager who gave the directive? If you see something, say something.
Rising Star
I'll add that OP has yet to chime in and share the context you think is necessary, other than to state that the employee was previously hired under a false identity. That pretty much confirmed what I inferred from the question.
Pro
What sort of backwards HRIS platform requires you to terminate and rehire someone when they have a name change?
Rising Star
... and HRIS platforms absolutely do NOT have processes for terminating an undocumented worker and then rehiring them when they're properly documented.
Rising Star
If the new name is their real name and they are now authorized to work in the US, it is legal.
Rising Star
Yes, it is legal. They fired the person for working under a false identity, and they are hiring a person with a true, authorized identity.
I would be very cautious with that.
If an employee has updated legal documents, the proper approach is usually to update their employee record with the correct legal name and supporting documentation, not “terminate” them and “rehire” them as though they are a different person.
Terminating and rehiring under a new name could create serious issues with employment records, payroll, benefits, tax reporting, seniority, vacation accruals, ROEs, and work authorization documentation. It could also look like the company is trying to erase continuity of employment, which is a major red flag.
There may be administrative steps required depending on the jurisdiction and the type of documentation involved, but this should be handled through proper HRIS/payroll updates and legal/compliance guidance, not a fake termination and rehire.
I would document the concern and escalate it to legal, or senior HR before proceeding.
Rising Star
Hard disagree. Because the employee was not properly authorized to work in the US, they MUST be terminated, not simply "updated."
As an HR Assistant, it might be best to hold back on giving advice. Since you may not have all the background information, it's helpful to remember that these decisions are often made after many rounds of careful discussion.
Rising Star
Hypothetically, I would be asking a lot more questions before being comfortable with that situation. Anything involving identity, employment records, and legal documentation needs careful handling
That sounds shady at the very least.