Common Issues In Form I-9 Compliance

As immigration reform stalls out in Congress, the Department of Homeland Security (“DHS”) through its enforcement division, Immigration and Customs Enforcement (“ICE”), will continue to direct its enforcement efforts at employers. Moreover, ICE progressively teams up with other agencies, such as the Department of Labor (“DOL”), Social Security Administration (“SSA”) and the Department of Justice (“DOJ”), to conduct even more extensive investigations. As a result of such enforcement efforts, any failure to comply with current regulations subjects employers to the possibility of fines, debarment from government contracts, criminal liability, sudden workforce reduction, and negative publicity. In addition, public companies may find themselves defending against subsequent shareholder lawsuits. Based on this trend, immigration compliance for employers is no longer a slight inconvenience but a business necessity.

The Immigration Reform and Control Act of 1986 (“Act”) imposes an obligation on every employer to verify that each employee is authorized to work in the United States. Every employee must be able to provide documents to the employer proving his or her eligibility for employment. Under the Act, it is unlawful for an individual or business to hire, recruit, refer for a fee, or continue to employ a foreign national knowing that he or she is unauthorized to work. The Act requires every employer to physically inspect the documents designated by U.S. Citizenship and Immigration Services (“USCIS”) and both the employer and the employee must complete a Form I-9, Employment Eligibility Verification. At the same time, to protect foreign nationals with valid work permits, the Act also prohibits employers from unfair immigration-related practices in hiring, recruiting, and firing people on the basis of their national origin or citizenship. Any failure to perform said obligations can result in harsh consequences.

Form I-9, Employment Eligibility Verification

1. Every employer must confirm:

• there is a Form I-9 for every worker currently employed with the exception of those who were hired before November 7, 1986, and who continue in uninterrupted employment since the date of hire;
• there is a Form I-9 for every terminated worker who:
  • has been hired within the last three (3) years, regardless of the date of termination, and
  • has been hired at any time, if terminated within the last 12 months;
• the parties complete the correct version of the Form I-9.

2. Every employer has to ensure that each Form I-9 is filled out completely. Under the Act, employers are responsible not only for documenting their employees’ identity and work authorization but also for verifying correct completion of the entire Form I-9.

Common Form I-9 failures:

Section 1:

• employee fails to include his or her full name and/or other names used
• employee fails to complete non-applicable boxes with “N/A” (beginning with the current (3/8/13) version of Form I-9)
• employee fails to check the box attesting to his or her status in the U.S.
• employee fails to include a number (Alien Registration, USCIS or I-94) and/or date of expiration, where applicable
• employee fails to sign and date Form I-9 or signs in the wrong place
• employee fails to complete Form I-9 on the first day of work¹
• employee includes his or her own information in Preparer/Translator Section

Section 2:

• employer fails to write out employee’s name at the top of the second page of the current version
• employer reviews too many documents and/or includes them in the wrong columns
• employer fails to properly fill in document information boxes:
  • incomplete, incorrect, or missing titles of documents
  • incomplete, incorrect, or missing issuing authorities
  • missing document numbers and/or expiration dates
  • the above information is included in the wrong places
• employer accepts documents with mismatching names or expired dates
• employer fails to fill in the date of hire/first day of employment
• employer fails to complete in full business name and/or full business address
• employer fails to complete in full name and/or full title of its authorized representative
• employer’s authorized representative fails to sign and date the attestation box
• employer’s authorized representative fails to make an attestation within three business days of the first day of employment²

Section 3:

• employer fails to write out employee’s name
• employer fails to fill in the date of rehire or re-verification
• employer fails to fill in full name and/or full title of its authorized representative
• employer’s authorized representative fails to sign and date the attestation box
• employer completes re-verification of work authorization after the previous document has expired³

Maintaining the Forms

Under current rules, employers are not required to make photocopies of the supporting documents and attach them to the employee’s Form I-9. However, it is a recommended business practice to be applied uniformly to all employees. In case of an update or re-verification, the employer should photocopy new documents and attach them to the original Form I-9.

Corrections

Clearly marked corrections of certain errors on the Form I-9 are usually allowed. However, erasing any incorrect information, back-dating, or recreation of any document is prohibited. Corrections should be made only by crossing out inaccurate information and/or inserting the correct or missing information using a different color of ink. Every correction must be initialed and dated by the person allowed to make the permitted correction in the respective section of the Form I-9. Corrections and subsequent additions (Sections 3 with photocopies of the supporting documents or a new Form I-9 executed for any reason) to the employee’s Form I-9 file should be attached to the original Form I-9.

It is also a prudent practice to keep Form I-9 files separately from general employment files to better protect employees’ confidential information, avoid allegations of document abuse, and be able to easily produce Form I-9s upon request from a government agency.⁴

It would be prudent for employers to introduce the practice of attaching a dated memo to the employee’s Form I-9 indicating what action has been taken and for what reason (for example, in case of review, correction, audit, or execution of a new form).

Form I-9 violations

Federal law provides for two types of failures with respect to the Form I-9 – technical or substantive. If the failure is technical, the employer may be granted a 10-day grace period to correct the failure. If the failure is substantive, there is no grace period to make a correction if discovered in an audit.

Technical violations involve Form I-9s that have not been correctly completed and/or maintained. Fines for technical violations range from $110 to $1,100 per violation.

Examples of technical failures:

• the employee fails to enter in his or her birth date or address;
• the employer fails to enter in the date of hire; or
• the employer fails to enter in the title, identification number or expiration date of a supporting document.

Fines for substantive violations, including unlawful discrimination, range from $375 to $16,000 per violation.

Examples of substantive failures:

• the employee fails to sign in Section 1;
• the employer fails to review a list A document or a combination of List B and List C documents; or
• the employer fails to re-verify on or before the date on which the employee’s current work authorization expired.

Criminal penalties include up to $3,000 fine and up to six months in prison per violation.

In calculating the civil money penalty, ICE considers the following five factors:

• size of the employer;
• good faith effort to comply with the regulations;
• seriousness of violation;
• involvement of unauthorized workers; and
• history of the employer’s previous violations.

 

It is also worth mentioning that ICE assesses penalties per violation and not per Form I-9. Even so, depending on the number of Forms I-9 and the number of violations in each Form I-9, the amount of assessed penalties can be quite significant.

Remote hires

From time to time, employers may need to hire employees remotely due to business needs. For that purpose, employers often engage distant agents who do not routinely complete Form I-9s. We recommend that employers have instructions prepared in advance to provide such agents. Presently, employers may not use video conference technologies to verify employees’ documents. This practice is not compliant with the federal law because the current Form I-9 regulations require that no one other than the employer’s representative who inspects an employee’s original identity and work authorization documents is permitted to complete the employer attestation in Section 2 of the Form I-9. This interpretation was again supported by the decision of a federal administrative law judge in January 2015. The judge found the employer in violation on 242 counts of false attestations in Section 2 of the Form I-9 because the employer’s payroll manager had executed each form without having seen the employees or having inspected the original documents in the presence of employee. The judge reasoned that the regulations do not authorize an employer to delegate the obligation to conduct an in-person inspection of employee’s documents unless the employer intends to rely upon the third party to complete and execute the attestation in Section 2 as its agent.

Corporate restructuring

Corporate restructuring, including mergers of companies to form a new entity, acquisition of other companies, consolidations and spin-offs, presents yet other challenges for corporate employers in Form I-9 compliance and can create challenges in retaining foreign workers who hold various nonimmigrant visas. Depending on the circumstances, an employer may be required to prepare new Forms I-9 and other immigration documentation and/or assume liability for any non-compliance issues of the other employer. In many cases, the law requires immediate immigration and employment eligibility compliance without any grace period. Therefore, these issues should always be addressed in the due diligence part of any form of corporate restructuring.

Conclusion

In light of on-going government enforcement efforts, employers face real and costly risks if they pay insufficient attention to the performance of their immigration and employment eligibility verification obligations. For these reasons, it is imperative for every employer to adopt adequate compliance policies and practices.

This summary note is only the starting point on the way to compliance with the Employment Eligibility Verification Rule. Employers are obligated by law to comply with all of the applicable requirements and should consider the advice of corporate immigration counsel in any particular circumstance.

Dmitri Sharko

 

¹Under the current rules, employee may complete Form I-9 before the first day of work, provided that the employer has made an offer to the employee and the employee has accepted the offer. In such a case, however, it would be prudent for employers to document acceptance of the offer to avoid any allegations of pre-screening.
²Although three business days are allowed to fill out Section 2 of Form I-9, it would be prudent for employers to verify all information, make any necessary corrections, and complete the attestation while the employee is still in the HR office on the first day of work.
³Under current rules, employer must re-verify employment authorization on or before the date of expiration of the employee’s work authorization document on file. Continuing employment without such re-verification is considered unauthorized.
⁴Under current rules, employers have only three business days to produce all employees’ Form I-9 files upon receipt of the Notice of Inspection.