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Employer’s Checklist for I-9 Compliance in 2017

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IRS i-9 changes

Form I-9 is the federal government’s way of ensuring two things: (1) that businesses hire only individuals who are authorized to work in the United States and (2) that all new hires are treated in a fair and nondiscriminatory manner. Title 8 of the U.S. Code, Section 1324a, governs unauthorized hiring and employment. Section 1324b of Title 8 governs nondiscrimination in hiring and employment. Form I-9 and the rules surrounding it encapsulate the requirements of these two important aspects of the federal law.

Your business’s I-9 records could be inspected at any time by the Department of Justice, the Department of Homeland Security, or the Department of Labor. The law provides a minimum notice of three days prior to an I-9 inspection.

Penalties for isolated violations of Section 1324a (document violations) include civil fines ranging from hundreds to thousands of dollars per incident. A pattern or practice of violating Section 1324a can lead to higher fines and criminal penalties, including imprisonment of up to six months. Violations of 1324b (discriminatory conduct) are punishable by even higher fines starting at over $400 for a single first offense and going up to nearly $18,000 per incident for a third offense, plus plaintiffs’ attorney’s fees if there is a lawsuit.

So while it may not be a thrilling topic, I-9 compliance is absolutely essential for businesses of any size. Whether you have a full-time human resources staff or whether HR is one of many hats worn by a small business owner, it’s key that someone on your team has accurate and up-to-date information and is diligent about maintaining a clean and compliant I-9 process. Here are a few practical tips to keep your business on track:

Use Form I-9 for every new or rehired employee. Form I-9 is created and regulated by United States Citizenship and Immigration Services (USCIS). One of the central functions of the I­‑9 system is to prevent employers from guessing about a worker’s immigration or citizenship status, and thus engaging in discrimination. In order for the I-9 to serve its purpose, your process must be consistent for every new or rehired employee. Always make sure to use the most recent form published by the Department of Homeland Security. You may use the published Spanish-language version of the form as a translation aid when appropriate, but you must actually complete the English version for every employee. Only the English version will be considered valid (unless you are doing business in Puerto Rico). In hiring, employers must give equal treatment to any authorized worker and may not limit jobs to U.S. citizens unless such a limitation is created by law or government contract.

Do not fill out an I-9 for independent contractors or workers on a placement through a third–party staffing agency. Similarly, you do not need to do an I-9 for someone you have employed continuously since November 6, 1986, or for someone who does casual domestic work in a private home on a sporadic, irregular or intermittent basis.

Maintain paper and/or electronic copies of your I-9 Forms. I-9s must be retained for three years after the date of hire or one year after the date employment is terminated, whichever is later. Implement a tracking system for retention dates, and purge regularly. In the case of an inspection, it is best not to have surplus or outdated records in your possession. Whether you chose a paper or electronic retention system, or a combination of those, your records must be secure, easily accessible to the proper personnel or authorities, and clearly readable.

Keep the Handbook for Employers: Guidance for Completing Form I-9 (“M-274”) close at hand. M-274 is published by USCIS. It is available to the public online and contains explanations, pointers, FAQs, and visual guides to help employers comply with I-9 regulations. USCIS published a new M-274 in July of 2017, so make sure your HR department is referring to the current handbook. The previous version was published in January of 2017, and prior to that in April of 2013.

Tips for Section 1 of Form I-9. Section 1 must be completed by the employee on or before the first day of work, but not before he or she has accepted a job offer. An employee may have the assistance of a preparer and/or translator, and if so such person(s) must certify that they assisted completion of the form by completing the Form I-9 Supplement. Unless you use E-Verify, the employee is not required to provide a social security number and may choose to leave that portion of the form blank. An employee may also choose not to provide a phone number or email address on the I‑9, and if so should write “N/A” in the space provided.

Provide the employee with a copy of the third page of Form I-9, and the Form I-9 Instructions published by USCIS. The third page of the form presents three lists of documents (List A, List B, and List C).  Explain that the employee must present one document from List A or two documents including one from each of List B and List C. Said another way: acceptable documentation = A or B + C. You must not require the employee to provide any particular documents or demonstrate a preference for certain documents over others. You may terminate an employee who fails to provide proper documentation of identify and authorization within three days of starting work.

Tips for Section 2 of Form I-9. Section 2 must be completed by the employer no later than the new employee’s third day of work. However, if the employment will last less than three days, Section 2 must be completed on the first day of work. The employer or a designated agent must actually examine the employee’s physical documents (no copies) in the employee’s presence. The person who examines the documents must be the same person who completes Section 2. In examining the documents, the employer’s responsibilities are to determine if each document reasonably appears to be genuine and relates to the person presenting it—nothing more and nothing less. If the documentation shows a discrepancy about the employee’s name, such as if a person changed her name due to a recent marriage or there is a spelling difference, you may still accept the documentation so long as you are satisfied the document appears to be genuine and relates to the person presenting it.  Include a note in the employee’s file describing any such inquiries or explanations regarding the documents. Complete all form fields that apply to the document you examined. The form provides space for as many as three List A documents, but usually you will only examine and record one List A document, or none, and leave the remaining fields blank. Note that you will sometimes be required to temporarily accept receipts in place of actual documents.

You can choose whether or not to make and retain copies of employees’ identity and authorization documents. But whatever you decide, you must apply your policy consistently to every employee. If you make and keep copies of the documents for some employees but not others, it may constitute employment discrimination.

Keep track of expiration dates for employment authorization documents. Some employment authorization documents have expiration dates and in some cases you will have a responsibility to reverify the employee’s authorization on or before the document expiration. You do not need to reverify a U.S passport, a permanent resident card, or any documents from List B of Form I-9. See M-274 for details about how to identify, complete and record a required reverification. You may not consider the fact that an employee has an employment authorization document that will require reverification in your hiring decision; such conduct may constitute employment discrimination.

Tips for Section 3 of Form I-9. Section 3 is for recording name changes and reverification documents, if necessary, and should be completed by the employer.  The employer must use the most current version of Form I-9 when completing a reverification.  You should attach the new Form I-9 to the previously form.

If you discover a mistake in your I-9 forms, it should be corrected immediately. The solution will depend on the type and magnitude of the mistake. If the mistake is serious, for example if Section 1 or 2 of a form was overlooked, a replacement form should be completed but the original form should also be retained. Sign and date the replacement form accurately—do not back date. If the mistake is small, you or the employee (depending on which section of the form) may fix it by simply crossing out the mistake and/or adding correct information. The person making the correction should initial and date in the margin. Do not use white-out; corrections should be obvious and clear. Whether a replacement form was completed or a correction was made, you should prepare a written explanation for the employee’s file explaining what happened in case of an inspection.

If an employee reveals that he or she previously presented false identity or work authorization documentation but has since obtained valid status and adequate documentation and wishes to regularize his or her records, you may complete a replacement I-9 based on the new documentation and continue employment. The I-9 rules to not require you to terminate employment in this situation. Remember to add a note to the employee’s file explaining what happened in case of an inspection.

 Note that there are special rules for certain categories of employees and situations. Some of those categories include:

  • Employees under the age of 18;
  • Some employees with disabilities;
  • Employees of staffing agencies;
  • Employees from state workforce agencies;
  • Leaves of absence and layoffs;
  • Corporate mergers;
  • and others.

See the M-274 for detailed instructions about how to handle these situations.

Note that there are some differences in this process if you choose to use E–Verify. For example, if you use E-Verify, all of your new employees will be required to provide a social security number and you will be required to retain copies of photo ID documents. The E-Verify program is an optional “companion” to the I-9 regulations and does not replace any obligations regarding I-9 compliance. More information about E-Verify can be found at uscis.gov/e-verify.

Make a good faith effort and be proactive. These regulations might seem overwhelming, especially for smaller businesses that may not have a specialized HR department. But fortunately, federal law provides that penalties for document violations will take into consideration the employer’s good faith in implementing I-9 procedures as well as the size of the business, the seriousness of the violation, and the history of previous violations.  Don’t ignore or try to conceal or past mistakes or failures to comply. Instead, conduct your own self-help audit, or ask an attorney to assist you.  Double-check your hiring and record-keeping processes to make sure your business is on the path to I-9 excellence—it will be time and effort well spent.

© 2017 All Rights Reserved Rinke Noonan