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Prepared By: Melissa C. Marsh, Los Angeles Employment Attorney
Written: October 2010

Form I-9.

The Immigration Reform and Control Act of 1986 was meant to curb the hiring of undocumented workers (e.g., documented foreign nationals without work visas and "illegal immigrants") by requiring all employers to verify both the identity and the work eligibility of each individual hired to perform labor, or services, in return for wages in the United States by properly completing and retaining Form I-9. Verification requires the employer to analyze and record the worker’s identity and employment eligibility document(s) to ensure the documents are genuine and related to the individual.

Employers are not required to complete Form I-9 for independent contractors. However, if the employer misclassifies an employee as an independent contractor, the employer may be held responsible and liable for failing to comply with Form I-9 employment eligibility verification and compliance. Prudent employers who do not want to be the target of a federal investigation (audit), or prosecution, by Immigration and Customs Enforcement (ICE) with respect to their independent contractors should: (1) have an explicit policy prominently displayed at every work site that prohibits the use of undocumented workers; (2) require all subcontractors to check the employment eligibility of their employees and to sign off on a written policy that prohibits the hiring and retention of undocumented workers; (3) verify the employment eligibility of all independent contractors and subcontractors; and (4) perform an audit to ensure the company and its executives are not aware of any violations.

Although ICE’s I-9 compliance audits were designed to identify and prosecute companies that knowingly hired illegal immigrants, the audits have resulted in fines for a number of honest employers who have made simple clerical errors, failed to retain the appropriate records as required by the law, or unknowingly yet improperly completed I-9 forms. And worse…while such audits were rarely conducted up until 2009, ICE has aggressively pursued worksite enforcement actions and Form I-9 compliance.

I-9 Compliance.

Form I-9 must be correctly completed within three business days of an employee’s hire date.

To complete the form, the employee must complete and sign under penalty of perjury Section 1, which asks for the employee’s name, address, age and legal status (citizen, U.S. national, resident alien or alien with a temporary work permit). The prospective employee must also choose from the list of acceptable documents, what “original” and “unexpired” document(s) to present so the employer can verify the employee’s identity and work eligibility. Acceptable identity and work authorization documents are listed on the Form. The employer should not demand, or request, any particular document, and employers are cautioned not to collect additional documentation from some employees, but not others, as such acts could be construed to be discriminatory.

After inspecting the documents provided by the employee, the employer is required to complete Section 2. Section 2 of Form I-9 requires the employer to: (1) list the employee’s identity and work eligibility document titles, the issuing authority, the document numbers, and expiration dates, if any; and (2) sign under penalty of perjury that the employer has viewed the original unexpired document(s) provided by the prospective employee, that the document(s) appear to be genuine and to relate to the named employee, and that to the best of the employer’s knowledge the named employee is eligible to work in the United States.

No field in Section 2 should be left blank. The most common errors made on Form I-9 include:

• Failing to complete the form by the third day of employment
  
  
• Failing to indicate the employee’s start date
  
  
• Failing to ensure that Citizenship status in Section 1 is properly completed by the prospective employee
  
  
• Failing to ensure the employee properly signs and dates the Form
  
  

What if the employer is hiring an employee who does not live in the area, and is unable to present “original” documentation in person for review?

In such cases, employers would be well advised to ask the prospective employee to bring Form I-9 and the employee’s “original” documentation to a licensed Notary Public for completion and to certify that the documentation appears to be legitimate. The prospective employee can then fax a copy of the I-9 form to the employer, and mail the original.

The employer must retain the I-9 Form, along with photocopies of the identification documents submitted by the employee for completion, for three years after the employee’s hire date, or one year from the employee’s termination date, whichever is later. These documents should NOT be kept in an employee’s personnel file, but in a separate file.

If an employer receives an ICE I-9 compliance audit, or a wage and hour audit from the Department of Labor, the employer must be able to present all I-9 Forms and associated documentation for its current and past employees within three business days to the requesting agency.

Defenses.

There is no "good faith” defense for I-9 paperwork violations, and I-9 compliance errors and violations carry stiff civil fines and criminal penalties, which can be levied against not only business owners and executives, but also a company’s managers, supervisors, accountants, and human resource personnel. However, proving the employer tried in “good faith” to comply with the Form I-9 regulations and did not knowing hire an unauthorized worker is a defense to the more serious charge of knowingly employing, recruiting, or hiring an unauthorized worker.

Civil Fines and Criminal Penalties.

Employers face the following potential penalties for immigration-related violations, all of which may be the result of an investigation brought by Immigration and Customs Enforcement (ICE) that begins with an Notice Of Investigation:

• Fines of up to $1,100 for each I-9 Form paperwork violation (failure to properly complete, retain, and/or make available for inspection Forms I-9 as required by law);
  
  
• Fines of up to $6,500 if an individual has knowingly committed, or participated in, acts relating to document fraud;
  
  
• Fines of up to $16,000 for knowingly employing, recruiting, or hiring unauthorized workers under Section 274A of INA, or for each unfair practice offense under section 274B of the INA, including the refusal to accept documents listed on the I-9 Form;
  
  
• Forfeiture of illegally obtained assets and profits;
  
  
• Prison sentences of up to 10 years for criminal violations; and
  
  
• Treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits brought by competitors.

If the employer receives a Notice of Intent to Fine, the employer may request a hearing before an administrative law judge. If the request for a hearing is not received within 30 days, ICE will impose the penalty and issue a Final Order, which cannot be appealed.

Given the potential for significant penalties, employers must implement an effective compliance system.

If you would like assistance on how to properly prepare and review Form I-9, or how to prepare appropriate instructions for a Notary Public, please call our office at 818-849-5206, Email Melissa C. Marsh, or schedule 30 minute telephone consult and Ms. Marsh will provide complete instructions verbally and a sample completed form via email with clear instructions for just $199.

© 2010 Melissa C. Marsh. All Rights Reserved.

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