I-9 Compliance: Employer Rules, Penalties, and Best Practices

I-9 compliance helps employers verify work authorization, meet federal rules, and avoid costly fines, penalties, and legal issues. Use proper documentation, audits, E-Verify, and training to maintain compliance and reduce employment verification risks.

By Brad Nakase, Attorney

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Table of Contents

1. Introduction

2. Why is Form I-9 Important and What Is It?

3. Details of Form I-9

4. Form I-9 and E-Verify

5. Responsibilities: Employees vs. Employers

6. I-9 Compliance: Important Dates and Deadlines

7. Form I-9: How to fill out

8. Hybrid & Remote Workers in Remote Verification

9. I-9 Compliance: Rules for Form I-9 Retention

10. Self-checks and I-9 compliance audits

11. I-9 Compliance: Common Issues

12. Penalties associated with I-9 Non-Compliance

13. I-9 Compliance: Best practices

Introduction

One of the most important duties of employers is to ensure that the rules governing work authorization criteria are followed. Employers are required by law in the USA to get Form I-9 completed. It is to confirm the identification and job eligibility of people they hire to work in the country.

Higher punishments may result from non-compliance. The rules have become stricter after the new administration’s focus on workplace inspections. To avoid penalties and legal repercussions, employers need to be more careful about correctly filling out & keeping I-9 papers. During his first administration, Trump prioritized enforcement. Over 6400 audits were started by Immigration and Customs Enforcement (in 2019), compared to an average of about 3000 inspections during the presidency of Barack Obama.

Let us try to understand the essential information regarding Form I-9. It includes job eligibility verification, typical compliance mistakes, and I-9 retention guidelines. You will also learn the relationship between the data entered on an I-9 and the e-Verify program. Gaining knowledge of these facts will also help shield you from the dangers of non-compliance.

Why is Form I-9 Important and What Is It?

Every time a business adds a new employee to its payroll, they are required by the US government to complete Form I-9. Verifying the identification and work authorization of people recruited for employment in the US is the goal of Form I-9, sometimes referred to as the Work Eligibility Verification document. Both the employer and the employee must fill out and attest to certain portions of the form under penalty of perjury. Additionally, there are deadlines for completing specific form parts, which are covered in more detail below.

I-9 compliance is mandatory. Employers who neglect to appropriately confirm work authorization run the danger of facing severe sanctions. It may include fines and legal action. ICE and the United States Department of Homeland Security routinely do I-9 audits at businesses nationwide. Compliance with Form I-9 usually comes under the HR department in most firms.

When people who are not officially allowed to work in the United States of America are employed, it is considered unauthorized employment. This may occur if their work permit has expired. It can also happen if they do not have the required documents/paperwork. Maintaining I-9 compliance is extremely important to stop this kind of illegal employment.

Details of Form I-9

Form I-9 was developed by the United States Citizenship & Immigration Services. The objective is to stop the hiring of undocumented workers. The federal statute that mandates identity & work permit compliance through Form I-9 is the Immigration Reform and Control Act (IRCA). Form I-9 has the following sections:

Section 1: The employee fills it out
Section 2: Usually filled out in person by the employer
Identifying the Preparer Translator in Supplement A
Reverification & Rehire is Supplement B (formerly Section 3)

Three primary duties for employers were established by IRCA. First, companies are prohibited from intentionally hiring undocumented workers or from keeping them on staff after discovering they are undocumented. The second is that companies must use Form I-9 to confirm employment, and the third is that they cannot discriminate against people throughout the recruitment procedure on the basis of their citizenship, national origin, or immigration status.

Except for individuals hired before 7^th November 1986, the requirement is applicable to all full-time and part-time employees, irrespective of citizenship and immigration status. Those employed before that date are exempt from IRCA and are exempt from filling out Form I-9.

Form I-9 and E-Verify

Employers can electronically verify an employee’s identity and authorization for employment in the United States by using the government’s E-Verify web system. With a few exceptions, most employers can choose not to participate in E-Verify, even though Form I-9 is required for all employers. E-Verify is necessary for some state-level companies and federal contractors whose contracts contain the FAR (Federal Acquisition Regulation) clause. Any employer who wants to review I-9 documents virtually through a video chat instead of in person must also have E-Verify.

The data/information on Form I-9 is compared by E-Verify with data from the DHS and the SSA (Social Security Administration). The E-Verify program will display an “Employment Authorized” notification if the data matches. It shows a “Tentative Non-Confirmation” discrepancy notice if there are inconsistencies. It means that more action is required.

Responsibilities: Employees vs. Employers

The employer and the employee are both required to provide specific I-9 compliance documentation. It is the duty of the worker to supply the information and documentation needed to verify their identification and eligibility for employment. Verifying the paperwork and making sure the right supporting documentation is supplied are among the employer’s duties. The Lists of Eligible Documents outline which documents validate an employee’s identity and employment authorization; the employer is not allowed to choose which papers a worker may provide.

I-9 Compliance: Important Dates and Deadlines

After accepting a job offer, the employee has until the first day on the job to fill out the first section of Form I-9. After the worker’s start date, the employer has three business days to finish Section 2. By the conclusion of the worker’s initial day of work for pay, the employer must fill out the second section of Form I-9 if the employee will be working for less than three days. This guarantees that, even for temporary work, the verification procedure is finished on time. These deadlines are strict and are a critical part of IRCA’s I-9 compliance obligation.

Form I-9: How to fill out

Let us take a step-by-step look at the two primary parts of Form I-9 (Sections 1 & 2). A thorough I-9 manual for employers is also available from USCIS.

Section 1: Attestation and Employee Information

The employee gives personal information in this section, such as:

Complete name, address, and birthdate
Phone number, email address, and Social Security number
Citizenship status (American citizen, a legal resident, etc.)
Status of work authorization

Under penalty of perjury, the worker must also date & sign the document attesting to the truthfulness of the data. Employers must make sure that workers fill out all necessary forms. A violation could arise from any data that is absent.

Section 2: Verification and Employer Review

The employer is in charge of Section 2 and has two options for doing so. After the worker has finished Section 1, Section 2 can be completed by an I-9 approved agent or someone on the staff of your organization (hiring supervisor, human resources manager, etc.). As previously stated, the employer has three business days from the employee’s start date to finish the following:

Verify each document that the worker has provided to make sure it seems authentic and pertains to the person who is presenting it.
Enter the details of the company where you work.
Note the paper or documents that the employee has provided as identification and work authorization.
Put the employment start date here.

The employer should supply the List of Approved Documents as per I-9 compliance, which includes any documents that the employee may submit. In order to verify the employee’s eligibility, the employer must additionally date and sign the form. Perjury is a punishment for this as well. Similar to Section 1, Section 2 may be violated if any information is omitted.

Acceptable Documentation for I-9 Verification for Employees

The government of the United States offers a list of permissible documents. They are divided into three categories:

List A: Identification & work authorization papers (such as United States passport & permanent residency card).
List B: Identification-only documents (such as an ID card or driver’s license).
List C: Only employment authorization documents (such as a birth certificate or Social Security card).

One document from List A or an assortment of a single record from List B and one from List C must be provided by the employee. As previously stated, employers are not allowed to recommend or counsel workers on what paperwork they should submit.

Hybrid & Remote Workers in Remote Verification

HR should think about how to remotely check I-9 documentation since many businesses now provide remote or hybrid employment choices. Employers can accomplish their verification virtually, usually using video conversations in which the employee presents their paperwork on camera, even if in-person validation is the norm. Only employers who have signed up for E-Verify can use this option.

To maintain the confidentiality and integrity of the job verification process, remote verification necessitates E-Verify participation.

I-9 Compliance: Rules for Form I-9 Retention

HR is responsible for making sure every single Form I-9 is kept up to date and retained. The objective is to remain in compliance with I-9 retention guidelines and federal standards. Form I-9 needs to be kept on file by employers for a minimum of 3 years after the worker is employed or one year post their termination (whichever is first).

Always keep Form I-9 separate from a staff member’s personnel file. This procedure helps to safeguard confidential employee data. It also guarantees that the forms are easily available for authorized government personnel to review. Maintaining adherence to privacy and confidentiality regulations is further aided by storing Form I-9s in a different file.

Self-checks and I-9 compliance audits

One efficient method to find mistakes and evaluate your adherence to the rules for employment eligibility validation is to carry out internal I-9 audits on a regular basis. You can find out if you are experiencing any practices or problems that might lead to an I-9 audit by conducting internal audits. Both paper and electronic forms can be audited. You have the option of reviewing a sample of Forms I-9 using non-discriminatory, impartial criteria, or all of them.

Errors, including missing data, inaccurate dates, or missing sections, could be discovered during the examination. If an error is discovered in Section 1 of Form I-9, the worker must fix it. Employers need to fix problems in Supplement B of Section 2.

Maintain thorough documentation of the audit/inspection procedure. It includes the list of forms examined, any mistakes discovered, and the fixes implemented. If an external audit is being conducted at your company, this documentation may be helpful. Identifying the important individuals who would be impacted in the event that a Notice of Inspection is received is important.

I-9 Compliance: Common Issues

Among the most common errors that can happen when it comes to I-9 compliance are:

Missing/incomplete forms: An employee can face a fine when their I-9 form is missing/incomplete.
Forwarding obsolete documents: Employers should take caution to ensure that they are not dealing with documents that are outdated. There may be automatic extensions for some documents, such as specific Employment Authorization Documents. In some situations, the expired document and documentation of the extension may be accepted.
Not updating Supplement B: It is mandatory when the worker’s employment authorization ends or they are rehired.
Discrimination issues: Requesting particular documents because of someone’s looks or citizenship status may result in major legal problems. Discrimination claims may arise.
Problems with Storage & Retention: Form I-9s must be kept on file by employers for the necessary amount of time. They should be easily accessible and inspected. Non-compliance may result from improper storage.
Lack of Training: HR staff must receive insufficient instruction on I-9 rules and procedures. If they don’t, mistakes could result in fines if documents are audited.

Penalties associated with I-9 Non-Compliance

ICE has the power to impose tough fines on those who do not comply.

Fines: Employers need to fill out & file I-9 forms in the correct manner. If they don’t, they can incur hefty fines.
Substantive Violations: For offenses such as neglecting to submit a Form I-9, knowingly hiring, or continuing to use unauthorized workers, fines can vary between $110 & $1100 per infraction.
The infractions have fines ranging between $375 and $16000 for those who commit the crime repeatedly.
Employers can be asked to pay fines because of uncorrected technical flaws that might have occurred, including incorrect information on the form.
Effect on contracts with the federal government: Debarment and the loss of contracts with the government are possible outcomes of noncompliance.

I-9 Compliance: Best practices

To reduce risk, HR is supposed to follow these best practices:

Have standard protocols and procedures regarding the completion and verification of I-9 forms.
Audit I-9 Documentation. This is to be done with some frequency to spot errors in a timely manner.
Electronic I-9 systems can reduce human error. They also minimize the amount of time required to complete the process.
Ensure that Form I-9 Agents are trained on proper I-9 procedures and on the latest regulations.

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