I-9 Audits Are On the Rise: Be Prepared

Audits of I-9 records quadrupled in 2018 over the prior year (the federal fiscal year). That means nearly 6,000 employers were audited, which led to several dozen civil and criminal convictions. The agency involved — Homeland Security Investigations (HSI) — "is carrying out its commitment to increase the number of I-9 audits in an effort to create a culture of compliance among employers," it stated upon releasing audit statistics. To accommodate the increase, HSI is beefing up its army of auditors.

Checkbox "Verified"

Most employers don't intentionally falsify I-9 forms or knowingly accept falsified ones from employees. They simply make honest mistakes. And that's what lets them get by with only a civil conviction instead of a criminal one. But, as the saying goes, ignorance of the law is no excuse. A civil offense conviction and its associated penalties still costs money and generates bad publicity. How can you avoid slipping up? With a quick review of basic I-9 employment eligibility verification requirements and common errors.

Timing Is Everything

First, be sure you're using an up-to-date Form I-9. They're easy to pull off of the U.S. Citizenship and Immigration Services (USCIS) website. The most current version expires on Aug. 31. New employees must complete their part of the form (Sec. 1) when hired. You need to complete the rest of it within three days of the employee's start date.

Note the word "employee": You don't need to worry about independent contractors — unless you happen to know of any that aren't authorized to work in the United States. Knowingly engaging such a person could expose you to serious legal sanctions.

That three-day deadline coincides with the deadline for employees to give you the documentation you need to complete Part 2. You must "physically examine each original document the employee presents to determine if the document reasonably appears to be genuine and relates to the person presenting it," according to USCIS. And the employee you're hiring needs to give you his or her documents personally, not anyone else.

The USCIS "E-Verify" system has been around a long time, but its use is voluntary for most employers. Federal rules, however, do require it for certain employers, and a handful of southern states require its use for all employers. Other states require it only for employers doing business with the state in question.

Reverification Requirement

If anyone you hire isn't a U.S. citizen and is here on a visa that expires, it's up to you to reverify that the employee's work authorization has been renewed before the original visa expires.

You might be tempted to avoid hiring someone whose legal employment eligibility, such as having only temporary resident status, appears more complicated than you want to deal with. But employment anti-discrimination rules come into play here. Specifically, "citizenship status discrimination" is illegal. So too are "unfair documentary practices" (selectively asking people for more documents than are required) and "national origin discrimination."

You need to hang on to those I-9s as long as employees are with you, and a bit longer. Specifically, you need to retain them for three years from the date of hire, or one year after the employee leaves you, whichever is longer. In other words, if an employee only stayed with you one year, you'd need to retain that I-9 for two additional years. You can retain the forms electronically using USCIS-approved formats.

Details Matter

The USCIS is quite particular when auditing I-9s. The agency has posted a list of "common mistakes" on its website. Most often, the errors involve omissions of basic information, such as the employee's middle initial, job title and date of hire.

Also posted on the website is a list of general tips for filling out the form, including the following:

If you fall short of compliance and are audited, you could face penalties for each mistake on each form. Penalties per mistake range from around $200 to around $2,000. That means that, if you consistently made the same mistake on each form, a penalty can grow exponentially.

Play It Safe

Don't gamble with the important task of properly completing, submitting and retaining Forms I-9 for your employees. Work with your CPA and attorney to answer any questions that come up. Getting it right is too important to roll the dice.

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