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Article | Jul 19, 2008

I-9 Compliance and Employer Sanctions in an Era of Heightened Scrutiny

As we discussed in our last newsletter, the Department of Homeland Security (DHS) now places a very high priority on ensuring that foreign nationals who work without authorization are apprehended and prosecuted, and that U.S. employers comply with requirements to properly verify employment authorization for all employees. Employers are required to verify on Form I-9, Employment Eligibility Verification, the identity and authorization to work of all employees. Failure to do so, and to do so properly, can result in substantial fines and, in egregious cases, criminal prosecution. The procedures for verification are quite specific and even minor “paperwork” violations may subject the employer to fines. The I-9 form was revised effective June 5, 2007. As of December 26, 2007, prior versions are no longer acceptable for use.

Which employees are subject to I-9 verification?
All employees hired after November 6, 1986;
All new hires, including workers referred by labor unions or recruiters; and
Employees whose work authorization is due to expire – they must be re-verified on or before the expiration date.

Which employees are NOT subject?
Casual hires: This category is extremely narrow and limited only to domestic services in a private home that are of a sporadic, irregular or incidental nature. Regularly scheduled in-home service is not casual hire. Those who work outside the actual house, such as persons performing yard work, are also excluded;
Independent contractors: There are very specific factors, primarily related to the amount of control that the employer maintains over the individual, which will determine whether the person is an independent contractor or an employee. The IRS provides guidance on this: www.IRS.gov. (See also Form SS-8, available on that website.) Bear in mind also that, even where a worker qualifies as an independent contractor, an employer can still be subject to employer sanctions penalties if the employer has actual knowledge that the person is not authorized to work in the U.S.;
Internal transfers;
Seasonal workers or other workers who are temporarily off the payroll;
Certain rehires (if rehired within 3 years of initial completion of I-9 and still eligible to work); and
Employees hired before 11/6/86.

Who is authorized to work in the U.S.?
The I-9 form sets out the 3 categories of individuals who may accept employment in the U.S.: U.S. citizens, lawful permanent resident (“LPR”) aliens (also known as “green card” holders), and other non-U.S. citizens with authorization to work in the U.S. U.S. citizens and LPRs are authorized to work indefinitely for any employer. Other non-citizens may be time-limited in their authorization to work, or may be limited to working for specific employers.

When must the I-9 be completed?
Section 1 of the I-9 form must be completed by the employee on the first day of employment (or on the date of hire). The employer completes section 2 within 3 business days of hire. The employer must examine the original documents. In signing the I-9 form, the employer is attesting that she has examined the documents; that the documents appear, on their face, to be genuine; that they relate to the individual presenting them; and that the employee is authorized to work in the U.S. The employer also verifies the date of hire for the employee in section 2.

What documents may be used?
A list of acceptable documents can be found on the reverse of the I-9 form. List A documents are those that establish both identity and authorization to work. Therefore, one List A document alone is sufficient for I-9 purposes. List B documents establish identity, and List C documents establish authorization to work. Thus, one item from each list is required to meet employment verification requirements.
The employee may choose, from among the acceptable documents, which to submit to the employer. The employer cannot require specific documents, or more or different documents, from those listed on Form I-9. For example, it may make the employer feel more secure to require that all U.S. citizens submit copies of their passports, but that is unacceptable.

Anti-Discrimination Requirements
The same law that introduced the requirement of employee verification (IRCA 1986) prohibits employers from discriminating on the basis of national origin or citizenship status in the hiring, recruiting, or discharging of individuals. Requiring certain individuals to provide before hire more or different documents than others, or keeping photocopies of the documents for some but not all employees, are just two examples of ways in which an employer may run afoul of the anti-discrimination requirements of the law.

Employer Sanctions
Even minor deficiencies in completing an I-9 form can result in an employer being cited for a “paperwork” violation and incurring a civil fine of $100 to $1,100 per employee. For unlawful hiring violations, penalties range from $275 to $2,200 per unauthorized alien for the first offense, up to $11,000 per unauthorized alien for the third or more offense.
If an employer engages in a “pattern or practice” of knowingly hiring or continuing to employ unauthorized workers, a criminal penalty is provided of up to $3,000 per unauthorized worker (in addition to other civil penalties assessed) plus up to six month’s imprisonment for individual officials of the employer who engaged in the overall pattern or practice violation. In addition, the U.S. Attorney General may bring a civil action against the employer requesting relief, including a permanent or temporary injunction, restraining order, or other order against the employer. A “pattern or practice” charge is possible where U.S. Customs and Immigration Enforcement (ICE) has advised an employer of multiple violations of knowingly hiring or continuing to employ unauthorized workers and the employer takes no action and simply continues business as usual.
The best way to safeguard against this type of liability is for the employer to develop and diligently use an I-9 employment eligibility verification system. If I-9 forms are properly completed and retained, employers will generally be protected from both paperwork and “knowing hire” charges. There are certain steps that employers should also undertake to help ensure they can establish their “good faith compliance” with the employment verification requirements in case DHS comes knocking on their door.

Common I-9 Errors
The employer representative who reviews the verification documents is not the same employer representative who signs the I-9 form;
The employee or the employer fails to sign and date the I-9 form in their respective sections;
The employee does not complete Section 1 of the I-9 form on (or before) the day employment begins;
The employer does not review original documents and does not complete Section 2 of the I-9 form on or before the third business day of employment;
The employer fails to insert the employee’s start date for work in the “CERTIFICATION” block of Section 2;
The employee does not check one of the three blocks in Section 1 attesting to his or her status in the United States or does not provide the required information for the second and third blocks. This is especially crucial where the employee checks “box 3” as a non-citizen/non-permanent resident worker. If the third block is checked, the alien number/admission number and expiration date of temporary employment authorization must be listed;
The employer fails to keep track of the expiration date of a “box 3” employee’s temporary, time-limited work authorization for purposes of conducting mandatory re-verification. Failure to re-verify is a serious paperwork violation and also may subject the employer to a “knowing hire” violation if the alien employee in fact had no continuing work authorization;
The employer lists too many identity and/or employment authorization documents in Section 2. The I-9 form should include only one document from List A, or one document from List B AND one document from List C. Listing more than this is considered “over-documenting” and could result in a discrimination charge against the employer ;
The employer fails to ensure that the employee’s verification documents “appear on their face to be genuine.” The employer should look to see that the type style on the document is consistent and does not contain obvious “white-outs” or type-overs. Employers do not have to be forensic document specialists, but they do need to apply general knowledge and common sense.
The employer reviews photocopies of the employee’s verification documents rather than original documents, as required. The employee is required to present in person his or her original verification documents to the employer representative. The employer representative should never accept photocopies of documents for I-9 verification purposes;
The employer fails to ensure that the employee’s verification documents actually relate to the employee. That is, information contained in the documents does not match other information available to the employer about the employee. The employer should look for a match in the employee’s name and date of birth on the documents and review any other descriptive information on the documents and make a visual comparison with the employee;
The employer fails to keep copies of verification documents presented either for all employees or for none at all. The law permits, but does not require, employers to make copies of the employee’s verification documents to attach to the I-9 form. It is important that the employer’s policy in this regard be standardized and applied consistently for all employees. It is also a violation to make document copies and keep them somewhere other than with the relating I-9 form; and
The employer does not keep the I-9 records separate from its general personnel records. Because I-9 records may contain information on an employee’s age, national origin and citizenship status, maintaining separate I-9 records can help employers avoid the appearance that some later personnel action was impermissibly tainted by information from the I-9 form. Moreover, as a practical matter, keeping I-9 records segregated allows an employer to assemble these records quickly in response to a DOL or DHS inspection or audit.

Conclusion
Recent increased efforts by DHS to enforce this country’s immigration laws bolstered by much higher levels of funding have resulted in a dramatic step up in worksite enforcement. The best way for employers to protect themselves from an audit and potential sanctions is threefold: first, establish an I-9 compliance policy and train staff in the proper implementation of that policy; second, review current I-9s for compliance with the law and take proper steps to correct any deficiencies; and third, keep pace with developments in this rapidly changing area of employment law.