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Form I-9 Violations Cost Employer $109,000 in Penalties

Posted By Editor, Laurie, Wednesday, February 15, 2017
Updated: Wednesday, February 15, 2017
Contributed by Kandis Sells


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If you (1) regularly staple a copy of a new hire’s identification documents but don’t actually fill out the Form I-9, (2) don’t always complete the Form I-9 within three business days, (3) don’t keep I-9 forms for former employees more than a year, or (4) have no idea what a Form I-9 is, you may want to take note of the penalties against an employer that were recently upheld in federal court. In 2013, the federal Immigration and Customs Enforcement agency or “ICE” (now U.S. Customs and Immigration Services or “USCIS”) fined the employer almost $800 per violation for some fairly common I-9 mistakes found during an agency audit.

The penalized mistakes included:

  1. Failing to complete I-9 forms within three business days of hire for 54 employees;

  2. Failing to actually fill out Section 2 of the Form I-9 for those 54 employees, where the I-9 forms were stapled to a copy of the employees’ identification and work authorization documents instead; and

  3. Failing to retain the I-9 forms for 84 former employees for at least 3 years after hire or 1 year after termination, whichever time period is longer.

The employer appealed the fines to the Second Circuit Court of Appeals and lost. The court ruled that all of the violations above are “substantive” violations subject to higher fines than if they were merely “technical” or “procedural” violations. (Buffalo Transportation, Inc. v. U.S.A., 2nd Cir, Dec. 2016.)

Unfortunately, none of these violations are all that uncommon. Other common mistakes that can result in penalties include: allowing the employee to submit a form without fully completing Section 1; no company representative signature and/or date in Section 2 of the form; failing to complete Section 3 when an employee’s work authorization expires
and must be re-verified; or using an expired version of the I-9 form itself.

The latest version of the Form I-9 became mandatory as of January 22, 2017. All other versions of the Form I-9 are no longer valid.

The new I-9 is available as a fillable PDF that can be completed electronically, and provides helpful drop-down menus, instructions, and form checking and completion features
that will alert the company representative if the form is not completed accurately or if required information is missing. 
The new form can also be printed and completed on
paper, the same way previous versions were completed, but then you lose the benefit of the enhanced features which were designed to eliminate costly technical mistakes.

As the employer found out in the case described above, these penalties can really add up. In fact, the penalties for Form I-9 violations were increased in 2016, and are now significantly higher than the fines assessed in that case.

For the types of paperwork mistakes described above, the penalty range rose from $110 - $1,100 per form up to $216 - $2,156 per form.
(The penalty range for unlawful hires increased from $16,000 as the maximum for each unauthorized worker to $21,563 each.)[i]

The good news is there are some simple steps you can take to avoid these costly mistakes:

  1. Train appropriate staff on how to properly complete the Form I-9, and require all new employees to complete the form with a trained staff member on the first day of work.

  2. Use the new fillable PDF Form I-9, and have both the new employee and the company representative fill it out on the computer.
    This method provides helpful directions for filling out the form in real time, flags inconsistent or missing information on the spot, and prevents many technical violations.

  3. Purge old I-9 forms regularly. While it’s important to keep former-employee I-9 forms for the required amount of time, don’t keep them too long.
    At a rate of $2,156 per form for each one with an error, it’s worth the time to pull and shred old forms on a monthly or quarterly basis.

Bonus tip: Total up the $2,156 per form in potential penalties you saved the company for each form properly destroyed, and add it to your quarterly HR performance metrics accomplishments!

[i]See USCIS I-9 website at https://www.uscis.gov/i-9-central/penalties.

 

Kandis Sells is an employment & labor attorney with Vigilant.

Tags:  employment laws  HR West 2017  I-9 violations  labor laws  new hire checklist  Vigilant 

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