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New Penalties for Incomplete and Incorrect Form I-9s

Why should your company be worried that a simple two-page form could result in prohibitive fines?

With the election of a new president just days behind us and the New Year quickly approaching, it is time to take a new, fresh look at your organization’s Form I-9s.

All U.S. employers have certain responsibilities under U.S. immigration law that take effect during the hiring process. The employer-sanctions provisions, found in section 274A of the Immigration and Nationality Act (INA), were added by the Immigration Reform and Control Act of 1986 (IRCA). These provisions further changed with the passage of the Immigration Act of 1990 and the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996. So what does this all mean?

What is Form I-9?

Let’s go back to the basics. Form I-9 requires that all U.S. employers verify the identity and employment authorization of each person hired after Nov. 6, 1986, the effective date of the law. This must be done on or before the first day that an individual begins to work for remuneration. The form must be completed by all persons, including U.S. citizens and non-U.S. citizens. During the process, the employer must not discriminate against individuals on the basis of national origin, citizenship, or immigration status, nor hire, recruit for a fee, or refer for a fee foreign nationals he or she knows to be unauthorized to work in the United States.

In a nutshell, the form is divided into three sections and in its early stages, was just a one-page form. Now, the three sections are more clearly laid out over two pages in the hopes that it will make it easier for both the employee and employer to complete the form thoroughly, timely and properly.

What are the three sections of the form?

The following is an abbreviated description of the three Sections of Form I-9. See the M-274, https://www.uscis.gov/sites/default/files/files/form/m-274.pdf Handbook for Employers, for a detailed explanation of how and when to complete Form I-9.

Section 1 requires the newly hired employee to provide personal information such as his or her name, address, and date of birth, and most importantly, it requires the individual to attest, under penalty of perjury, to his or her citizenship or immigration status by checking an appropriate box.

Section 2 requires the newly hired employee to present to the employer, its HR representative or agent, an original document or set of documents to show his or her identity and employment authorization within three business days of the date employment begins. The information supplied on the document(s) is recorded in Section 2 by the employer, its HR representative or agent who must also attest under penalty of perjury that the documents presented and examined appear to be genuine and relate to the employee who appears to be authorized to work in the United States. The instructions to Form I-9 provide a List of Acceptable Documents.

Section 3 comes into play in situations when there is a rehire of a prior employee within three years of the date of the initial execution of a previous I-9 and there has been no change in that person’s work authorization or when a reverification of a current employee is needed as a result the individual having provided a time-authorized employment eligibility document and this must be concluded prior to the expiration of said authorization or extension.

Once completed, where does Form I-9 go?

Employers must retain an employee’s completed Form I-9 for as long as the individual works for the employer. The forms should be kept together in a binder along with all the other forms for current employees. Once the individual’s employment has been terminated, for any reason whatsoever, the form must be retained for either three years from the date of hire, or one year from the date of termination, whichever is later. Once an individual is terminated, it is a good idea to remove the form from the current binder and place it into a binder marked “terminated” until it can be purged.

What’s the risk involved in not completing Form I-9 or completing it improperly?

At any given time, an employer can be called upon by the Department of Homeland Security (DHS), Office of Special Counsel (OSC) or Department of Labor (DOL) to produce the company’s Form I-9s for inspection. The employer is typically given a minimum of three days notice. The forms are then reviewed and audited for discrepancies, for completeness and to determine if the company has any unauthorized workers. Employers who violate Form I-9’s rules and regulations may be subject to civil fines, criminal penalties if a pattern or practice of violations is discovered, debarment from government contracts, a court order requiring payment of back pay to the individual discriminated against and/or a court order requiring the employer to rehire the individual discriminated against.

As of August 2016, the penalties assessed with Form I-9 completion have substantially increased. The last time increase was in March, 2008. Under the new fine schedule, employers may face penalties such as the following:

  • I-9 paperwork violations: $216-$2,156 per Form I-9, up from $110-$1,100 per form
  • Knowingly employing an unauthorized alien (first offense): $539-$4,313 per violation, up from $375-$3,200 per violation
  • Knowingly employing unauthorized alien (second offense): $4,313-$10,781 per violation, up from $3,200-$6,500 per violation
  • Knowingly employing unauthorized alien (third or more offenses): $6,469-$21,563 per violation, up from $4,300-$16,000 per violation

In addition, penalties for document abuse, asking the employee to present specific documents or for more or different documents than those listed on the List of Acceptable Documents and discriminatory practices, i.e., when an employer treats job applicants and/or new hires differently based upon their immigration status while implementing I-9 procedures or addressing I-9 issues, have also risen:

  • Document abuse: $178-$1,782 per violation, up from $110-$1,100 per violation
  • Unfair immigration-related employment practices (first offense): $445-$3,563 per violation, up from $375-$3,200 per violation
  • Unfair immigration-related employment practices (second offense): $3,563-$8,908 per violation, up from $3,200-$6,500 per violation
  • Unfair immigration-related employment practices (third or more offenses): $5,345-$17,816 per violation, up from $4,300-$16,000 per violation

What should an employer to do?

It is better to be proactive then reactive. Employers should review their I-9 procedures and conduct periodic internal audits to best defend against the risk of serious I-9 penalties. It is also seen as a good-faith practiceto hire a third-party auditor to review I-9 Forms.

And the employer should make sure that the most current version of the form is being used. Since its inception, the form has gone through at least 10 different versions and the DHS expects to issue a new version of the Form I-9 shortly.*

Our firm has a dedicated Form I-9 team that has reviewed the I-9s of mom-and-pop businesses as well as Fortune 500 companies. We have yet to see a fully compliant client.

* This article is based on information available as of its publication and is not intended to be all-inclusive or to furnish advice in a particular case. We are not responsible for any changes in regulations that may occur subsequent to publication. Please feel free to contact our office for further information and advice.

By Michael Wildes

 Michael J. Wildes, is the Managing Partner of Wildes and Weinberg, P.C. Mr. Wildes is a former Federal Prosecutor with the United States Attorney’s Office in Brooklyn (1989-1993). He has testified on Capitol Hill in connection with anti-terrorism legislation and is internationally renowned for his successful representation of several defectors who have provided difficult-to-obtain national security information. He is frequently a legal commentator/analyst for network television and radio. He is an Adjunct Professor of Business Immigration at the Benjamin N. Cardozo School of Law in New York. From 2004 through 2010, Mr. Wildes was also the Mayor of Englewood, New Jersey, where he resides. Wildes and Weinberg, P.C. has offices in New York, New Jersey, California and Florida. If you would like to contact Michael Wildes please email him at [email protected] and visit the firm’s website at www.wildeslaw.com.

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