I-9 Compliance - Avoiding the Violation of Employee Rights and IRCA Penalties

Jimmy Robinson Jr.
July 20, 2007 — 4,792 views  
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Just in time for summer, Congress is providing a true fireworks show on the issue of immigration. There have been countless views, opinions and positions put forth by so many, that most of us are confused as to the current state of affairs on the issue of immigration. What remains constant throughout all the passionate wrangling across the political band is the idea that the U.S. government must do something about immigration and its effect on American jobs. While it is easy to get drawn into this fiery debate, employers should remain focused on compliance with the current law. This article will assist in that focus and address the employment verification requirements under the 1986 Immigration Reform and Control Act. IRCA is still the law of the land; its enforcement officers are traveling across the United States reminding employers of its powers.

Purpose of IRCA
In the early 1980s Congress entertained testimony supporting the argument that the opportunity for employment was one of the most important magnets attracting illegal immigrants to the United States. The proponents of this argument offered that the federal government was unable to fully appreciate the magnitude of immigration on the United States economy, because the United States lacked a credible system to monitor and penalize those companies who allowed unauthorized workers to remain in their employ. So, in 1986 Congress passed IRCA. By passing IRCA, Congress for the first time levied penalties against all employers who willingly and knowingly employed individuals who were ineligible to work in the United States. The act required that by November 6, 1986, all employers verify the employment eligibility and identity of those the employer sought to hire to work in its United States operation(s). The tool used to measure the employer’s compliance with the act was the I-9 Employment Verification Form. Few modifications have been made to the verification process and sanctions program since 1986 and the I-9 form remains in place.

The I-9 Form
The I-9 is a one page form. The form verifies the employee’s identity and confirms that they are allowed to work in the United States. The form consists of three parts.  The first section requires the employee to provide basic biographical information and requires that the employee certify that he or she is either a citizen, permanent resident, or has some other status that allows them to work in the U.S. The employer completes the second section. It requires the employer to verify the employee’s identification and right to work documents, and to certify that the paperwork was timely completed. The third and final section is reserved for periodic updates by the employer. These updates occur if the employee has only temporary and not permanent authorization to work in the U.S. The I-9 form is available through the U.S. Citizenship and Immigration Services at http://uscis.gov/graphics/formsfee/forms/files/i-9.pdf.

Documents Employees Must Use to Comply with I-9 Rules
The back of the I-9 form lists the types of documents that an employee must provide to verify his or her identity and that he or she is authorized to work in the United States. The pre-set list provided on the back of the form includes such things as a U.S. passport or a permanent residency card. These two documents attest to both identity and eligibility for U.S. employment. If the employee does not have a U.S. passport or permanent residency card, they can provide a drivers license or U.S. identification card to prove identity; but then must provide additional proof, such as a social security card to prove work eligibility. In cases where an employee is authorized to work, but has not been issued a document on the list to verify that authorization, an employer should contact their attorney who may be able to provide a legal memorandum documenting the employee’s authorization to work. The memorandum will serve to insulate an employer from liability, but is not a permanent fix. Instead it entitles the employee only a brief (usually 90 days) extension of time to receive the already requested work authorization documents.

IRCA requires that employers personally inspect original documents that attest to the employee’s identity and his or her authorization to work in the United States. A failure to do so could result in stiff penalties. IRCA imposes civil and criminal penalties against employers who hire, or continue to employ, undocumented workers. The penalties imposed for hiring unauthorized workers could amount to anywhere from $250 to $5,500 per worker. If employers knowingly hire or continue to employ employees unauthorized to work in the United States, the employer could be suspended from bidding on government contracts for up to a year. In addition to those penalties, I-9 documentation errors could also result in significant fines. Each mistake or missing item on a form can result in a $100 penalty up to $1,000 for each form. If, during an IRCA inspection, an I-9 form is found to be missing, an automatic assessment of $1,000 could occur.

In recent years, the Immigration Service has accused many large, well known companies of IRCA violations. Disneyland in California was accused of having over a thousand paperwork violations. IRCA compliance officers issued a notice to fine Disneyland $395,000. In another case, the Immigration Service fined a Georgia packing company over $1 million dollars for smuggling undocumented aliens into the Untied States as well as various other violations. While the civil penalties can be stiff, IRCA inspectors and compliance officers have much discretion.

In addition to the civil penalties, if an employer knowingly accepts fraudulent documents from prospective employees, federal prosecutors are notified and criminal prosecution could result.

Completing the I-9 Form
IRCA requires all employers to have all employees hired after 1986 complete I-9 verification paperwork. The intent of IRCA’s I-9 form is to verify who is authorized to work in the United States. Its function is not to decide who is and who is not a citizen.  While all citizens are allowed to work in the United States, it is not always easy to identify who is and is not a citizen because of our country’s diversity. As such, employers must complete an I-9 form for every employee, not just those who appear to be non-citizens.

However, an employer does not need to complete an I-9 form for everyone who applies for a job with the company. Employers need only complete the I-9 form for those applicants who are actually hired. Employers who selectively choose who will and will not complete I-9’s could face penalties under anti-discrimination rules. If an employer uses volunteers, they are not subject to I-9 rules since they receive no payment for their services. Independent contractors are also not subject to I-9 rules; but employers should be very careful on this front. If an employer contracts work to independent contractors that the employer knows utilizes unauthorized workers, the employer could be held liable.

Also, it is not necessary to complete a new I-9 after the following:

  • a strike or labor dispute
  • a gap between seasonal employment
  • a temporary lay-off
  • an employee returns from paid or unpaid leave (such as vacation, illness)

Practice Tip: Complete a new I-9 for all employees, including independent contractors. If an employee leaves your company and is rehired within three years of completing the initial I-9 form and their status has not changed, you are not required to complete a new I-9.

When Must the I-9 Form be Completed
The I-9 form must be completed within three days of the hire date. The time begins to count on the day an employee begins work.  Said another way, the employee must provide the required supporting documents discussed above within three days of his or her hire date. If the documents are not provided, usually, the employee should be removed from the payroll and suspended until the documents are secured. However, if the employee cannot provide the necessary documents because they have been lost, stolen or destroyed, the employee must provide proof that the replacement documents have been requested and paid within the three days. The original documents must then be received by the employer within 90 days of the hire date.

While some employers require or allow new hires to complete the I-9 form before the first day of employment, they should do so with caution. The I-9 form elicits information about the new hire’s national origin and other background information. A decision not to hire a worker, could educe a discrimination claim.

Practice Tip: Have employees complete I-9 forms only after they have been hired. If you decide to have your new hires complete the I-9 form before the date of hire, do so only after the position has been offered and accepted and only if you have established this practice as a uniform policy for all new hires.

The Changing Face of the I-9 Form and the I-9 Recordation Requirements
For nonagricultural employers, an employee’s I-9 file must be maintained for 3 years after their hire date or for one year after the employee’s employment is terminated—whichever is later. In practice, this means that an employer should retain the I-9 for all its current employees for as long as they are employed with the company. Once their employment is terminated, the form must be retained for at least three years from their hire date or for at least one year after the termination date, whichever comes later.

One of the good things about the evolution of technology is how we can now store documents. In October, 2004, the federal government began to allow the I-9 form to be completed, signed and stored on a computer. At that time, there was little guidance or uniformity on how to store the documents. However, in 2006, the government released new rules that set the standards for the electronic maintenance of I-9 forms, bringing some clarity to the government’s expectations.

There has been great debate over what an employer should maintain. As the law currently stands, the retention of copies of supporting documents is voluntary. Many employers retain copies of passports, drivers license and social security cards and attach them to the completed I-9 Form while others question the necessity of retaining copies of the supporting documents. From a legal perspective, there is no question that the maintenance of such documentation could provide a defense for an employer, establishing that the employer had a good faith basis for believing the new hire was authorized to work, even if the I-9 form was not properly completed. Also in practice, we have found that IRCA compliance officers often become suspicious of employers who fail to keep copies of the supporting documents. In sum, each employer must make a uniform decision as to how their company is going to maintain documents. Once that decision is made, it must be consistently applied.

Caution - IRCA Anti-Discrimination Rules
All employers should be diligent about complying with IRCA’s employment verification rules. Still, employers should be careful not to overstep boundaries such that qualified prospective employees are penalized. IRCA’s antidiscrimination rules are very clear and its sanctions could be very severe. Under IRCA, employers cannot refuse to employ or terminate the employment of individuals based on their national origin or citizenship status. To do so would be to stand in violation of IRCA and subject the employer to sanctions. The Office of Special Counsel has caused employers to pay a total of over $1 million in back-pay to workers, has required employers to rehire workers, and has levied fines totaling hundreds of thousands of dollars.

Recent Immigration and Customs Enforcement raids have made it very clear that not only do those found to be working in violation of immigration laws run the risk of being arrested and placed in removal proceedings; but the employer’s failure to comply with IRCA’s I-9 rules will also result in high fines, negative publicity, possible criminal charges and a potential loss of revenue for the company. Despite this knowledge, and the microscopic focus on immigration in the media, many employers fail to comply with I-9 rules. While this article may answer some of the most frequently asked questions about I-9 compliance, it is not intended to be an exhaustive overview of the IRCA or I-9 rules. Hopefully, this article will assist some employers in obtaining IRCA compliance. Feel free to contact me directly should you desire to discuss specific questions your company may have. 

The author, Jimmy Robinson, can be reached in the firm’s Richmond office at (804) 783-7540 or via email at [email protected].

Jimmy Robinson Jr.

LeClair Ryan, A Professional Corporation