ABCs
of Immigration: I-9 Compliance - Avoiding Immigration Bombshells
While immigration can be a highly
divisive issue, employers need to focus on complying with the law. Most
employers will never file a visa application for a worker. But the mistake many
business owners make is assuming that no foreign employees means no need to worry about immigration laws.
This article will focus on the
employment verification requirements under Immigration Reform and Control Act
of 1986 (“IRCA”). Those provisions made every employer in the
country a deputy of US Immigration and Customs Enforcement. Employers are
required under that law to verify the identity and work authorization status of
every employee of the business. The mechanism for compliance is the I-9
Employment Verification Form that every worker must complete on the day of hire
or earlier. Failure to comply with IRCA’s I-9 rules
can result in significant fines, loss of access to government contracts and
highly negative publicity for a company. But despite the focus on immigration
in the news, a large number of companies fail to comply with IRCA’s I-9 rules.
The I-9 is a one page form
employees complete verifying their identity as well as proving they are allowed
to work in the
Employees must present
documentation of identity and work authorization and can present documents from
a pre-set list included in the I-9 Form’s instructions. Some documents, like a
IRCA requires all employers to
have all employees hired after 1986 complete I-9 verification paperwork.
Workers who are not hired do not need to complete I-9 Forms and employers who
selectively choose who will and will not complete I-9s could face penalties
under anti-discrimination rules. Volunteers are not subject to I-9 rules since
they receive no “remuneration” for their services. Independent contractors are
also not subject to the I-9 rules, but employers should note that if they
contract work to companies they know use unauthorized workers, they could be held
liable as well under IRCA. Persons transferring within a company are not
required to complete an I-9 form, but the easiest practice is usually to
complete a new I-9 anyway rather than having to document the I-9 was done
previously. Employees rehired by a company need not complete a new I-9 as long
as they resume work within three years of completing the initial form I-9.
Also, it is not necessary to complete a new I-9 after
The I-9 process must start on the day
an employee starts work. The employee must complete the first section of the
I-9 form and must provide the supporting documents noted above within three
days of the date of hire. If the documents are not presented by that point, the
employee must be removed from the payroll (though it is permissible to suspend
the worker rather than terminating the worker all together). While it is
possible to require people to complete the I-9 form before the first day of
employment, many immigration lawyers caution against this because the form does
elicit information about one’s national origin and a decision not to hire a
worker could trigger a discrimination claim. To the extent an employer chooses
to have I-9s completed before the date of hire, they should only be requested
after a position has been offered and accepted and there should be a uniform
policy applicable to all employees receiving an offer of employment having to
complete the I-9 ahead of time.
In October 2004, legislation was
enacted that allows for the I-9 to be completed, signed and stored on a computer.
In June 2006, regulations were issued implementing the new statute. The new rules sets standards for completing forms electronically and
also for the scanning and storage of existing I-9 forms.
Employers must keep I-9 Forms for
all current employees. For terminated employees, the form must be retained for
at least three years from the date of hire or for at least one year after the
termination date, whichever comes later.
Retaining copies of the supporting
documents is voluntary, however. Employers can retain copies of documents and
attach them to the completed I-9 Form. Immigration lawyers disagree over
whether employers should or should not retain copies of supporting documents.
Certainly maintaining documentation could provide a good faith defense for an
employer in showing that it had reason to believe a worker was authorized even
if the paperwork was not properly completed. IRCA compliance officers may also
be suspicious of employers that don’t keep copies of documents. Of course,
keeping documents also leaves a paper trail. Whatever a company decides,
however, it is important that the policy be consistently applied. Keep all the
documents or keep none of them.
If an employee is not a
While a closing may be a cause for
celebration at a company, it can also be the cause of a nightmare for a company
since it can instantly render all completed I-9s for an acquired company
invalid. If the acquiring company does not assume all of the assets and
liabilities, then the I-9s will likely not transfer. In a merger case where the
acquiring entity is a successor in interest, new I-9s will not be needed.
However, I-9s should be checked in the due diligence process to ensure that the
acquired I-9s are in good shape. Employers should consider adding I-9s to a
merger checklist and have all employees of the combined company complete I-9
forms on the day of closing or beforehand. In any case, an immigration lawyer
should be consulted in any merger, acquisition or divestiture to ensure that
the transaction does not result in new immigration problems.
While employers need to be
diligent about complying with IRCA’s employment
verification rules, they should not be so overzealous that they end up
penalizing qualified workers. IRCA also has anti-discrimination rules that can
result in an employer facing stiff sanctions. Employers of more than three
employees are covered by the IRCA anti-discrimination rules (as opposed to the
15 or more employees required by Title VII of the Civil Rights Act). IRCA
protects most
Under IRCA, employers may not
refuse to hire someone because of their national origin or citizenship status
and they may not discharge workers on those grounds either. The employer is
also barred from requesting specific documents in completing an I-9 Form and
cannot refuse to accept documents that appear genuine on their face. But note
that an employer must be shown to have had the intent to discriminate.
Employers can separately be
sanctioned based on legislation passed in 1990 if they request more or
different documents than required by the I-9 rules. Employers originally were
held strictly liable for violations under this category, but in 1996
legislation was passed requiring a showing that employers intended to
discriminate.
Employers can face stiff penalties
for IRCA violations that include substantial fines and debarment from
government contracts. Penalties can be imposed for hiring unauthorized workers
as well as simply for committing paperwork violations even if all workers are
authorized to work. Fines for hiring unauthorized workers will amount to
anywhere from $250 to $5,500 per worker depending on the prior history of
violation. Employers can also be barred from competing for government contracts
for a year if they knowingly hire or continue to employ unauthorized aliens.
Paperwork violations can also result in significant fines. Each mistake or
missing item on a form can result in a $100 penalty up to $1000 for each form.
A missing form would automatically be assessed at $1000. An employer, for
example, that had 100 employees and did not complete I-9 Forms might face a
$100,000 fine. IRCA investigators have considerable discretion in assessing
fines and will look at factors like the size of the company, the seriousness of
the violations, whether the employer was trying to comply in good faith and the
pattern of past violations.
Employers should also be cautioned
that knowingly accepting fraudulent documents from employees is a different
kind of violation that can be criminally prosecuted under other immigration
laws.
Employers can minimize the chances
for being found to have violated IRCA’s employment
verification rules by undertaking several steps: