Form I-9 is used to verify an employee’s eligibility to work in the United States, and fines for failed regulatory compliance have increased to a range of $256-to-$2,156, doubling from previous years. As a result, multiple fines resulting from I-9 errors can easily compound and cripple a small business.
“More than ever before, small business owners and their HR managers must now devote valuable time and resources to conduct extensive self-audits in anticipation of a Form I-9 audit from [U.S. Immigration and Customs Enforcement] ICE, which can occur with as little as a three-day notice,” says Patrick Valtin, CEO of employee evaluation testing platform HireBox. “This burden of staying up to date with all applicable Form I-9 policy changes has become a real challenge. Small businesses can be hit hard for administrative errors or technical violations, rather than substantive ones.”
The Results of Failed Compliance
I-9 mistakes can trigger an audit from ICE. To avoid these costly audits and fines, it is imperative that HR staff and business owners review the latest requirements and their own internal processes to ensure the forms are submitted correctly.
“The best way to minimize liability is to conduct periodic internal audits and, when necessary, to follow U.S. Citizenship and Immigration Services’ (USCIS) specific procedures for correcting errors or omissions,” Valtin says. “Audits should be conducted by someone who is knowledgeable about immigration, I-9 requirements, and USCIS rules to ensure that your immigration compliance program meets the objectives set forth in the U.S. Federal Sentencing Guidelines. Significant reductions in corporate liability are available when isolated misconduct occurs but a generally effective compliance program is in place.”
To gently nudge those businesses that feel that an internal audit isn’t worth the resources, Valtin gave us a few examples of companies who received fines for non-compliance with I-9 regulations:
- After failing to submit I-9s at the time of hire, Buffalo Transportation company was hit with $109,000 in fines.
- Hartmann Studios failed to sign most of its I-9 forms at the time of completion and faced fines of more than $600,000 as a result.
- For practices deemed discriminatory by the Department of Justice, Panda Express received $400,000 in I-9-related fines.
Tips to Avoid Penalties Resulting From I-9 Errors
Valtin offers the following tips to help business owners and HR managers avoid costly fines:
- Section 1 of Form I-9 must be completed by each employee at the time of hire, defined as the period of time after the job offer has been accepted and before the end of the employee’s first day of active employment. Section 2 must be completed within three business days of the date of hire.
- The instruction document and List of Acceptable Documents (page 3 of the Form I-9) should be made available to employees at the time they complete Section 1 of the form.
- Employees must present original, unexpired documents in person to the company representative completing Section 2 of the I-9.
- I-9s should be stored in a secure location separate from personnel files.
- Completed I-9s must be retained for as long as an individual is employed. I-9s for employees who have separated must be retained for three years after the date of hire (first day of work for pay) or one year after the date employment ends, whichever is later.
- Ensure that electronic I-9 data is correctly input and fully compliant with the regulations.
- W-9s should always be completed by independent contractors.