US Immigration and Customs Enforcement (ICE) recently released information about their increased efforts to investigate and audit employers for I-9 violations and illegal hiring practices. In 2018, ICE opened 6,848 worksite investigations and initiated 5,981 audits (nearly five times the number of audits that were issued in all of 2017). ICE intends to drastically increase audits to conduct up to 15,000 Form I-9 audits per year. With this increase, it is critical that you are in compliance and are prepared for potential ICE investigations and audits.
As an employer, you are likely familiar with the I-9 form. If not, or if you are a new employer, Form I-9 is used to establish both identity and employment authorization for individuals (citizens and non-citizens) hired for employment in the United States. All employers must accurately complete and retain Form I-9, the employment eligibility verification form, for every person hired for employment on or after November 6, 1986, in the United States. Significant fines and penalties are assessed for failure to complete Form I-9 and verify employment eligibility for each employee.
There are two types of I-9 violations: hiring violations and paperwork violations.
Fines and penalties range from $110 to $1,000 for failing to complete an I-9 to criminal penalties of up to $16,000 or a maximum of 6 months prison time for employers who engage in the practice of knowingly hiring unauthorized aliens.
How can you protect your business against such fines and penalties? The most simple and cost-effective way you can ensure compliance is to conduct a self-audit of your I-9s. The most common result of an ICE audit is fines for technical recordkeeping violations. Employers are always free to correct errors before a formal audit occurs. Some of the more common errors made in completing the I-9s that can trigger fines are:
I-9 Self Audit
The best practice to help manage I-9 compliance is to perform periodic self-audits. The goal is to identify I-9s that are missing, incomplete or have issues.
Correcting Mistakes
If during the audit process you uncover a mistake, you have two options: to correct the existing form OR prepare a new Form I-9. If you choose to correct the existing form, line out the incorrect portions, enter the correct information and initial and date the correction. If you opt to fill out a new form, always retain the old form, and attach a short memo to both the new and old Form I-9s stating the reason for the action.
Mistakes found in Section 1 of a form must be corrected by the employee, not the employer. Do not destroy incorrect I-9s. Have an employee correct, initial and date the corrected form. Errors found in Sections 2 or 3 of a form may be corrected by the employer. The same no-destruction and correction rules apply.
If you discover you are missing the Form I-9 for an employee, provide the employee with a form, complete it as soon as possible, DO NOT backdate the form, and attach a signed and dated explanation of what occurred and why.
Important notes
It is critical to follow the instructions for filling out Form I-9 completely and on-time to ensure compliance.
Please be aware that this is not a full representation of an internal I-9 audit. For a more complete reference on performing an I-9 audit per ICE standards refer to the following link: https://www.ice.gov/sites/default/files/documents/Document/2015/i9-guidance.pdf
If you are interested in having Campbell & Watson, CPAs, PC perform an I-9 audit of your business please call our office to schedule an appointment. We will be scheduling audits starting February 11th.
As an employer, you are likely familiar with the I-9 form. If not, or if you are a new employer, Form I-9 is used to establish both identity and employment authorization for individuals (citizens and non-citizens) hired for employment in the United States. All employers must accurately complete and retain Form I-9, the employment eligibility verification form, for every person hired for employment on or after November 6, 1986, in the United States. Significant fines and penalties are assessed for failure to complete Form I-9 and verify employment eligibility for each employee.
There are two types of I-9 violations: hiring violations and paperwork violations.
- Hiring violations occur when an employer hires, employs, recruits or refers an unauthorized alien for employment in the US. Hiring violations may result in fines and/or a cease and desist notice.
- Paperwork violations may also result in fines, and are assessed according to the type and number of violations. Other factors that may be considered include the size of the business, whether the employer was acting in good faith, the employer’s history of violations and whether violations involved unauthorized aliens.
Fines and penalties range from $110 to $1,000 for failing to complete an I-9 to criminal penalties of up to $16,000 or a maximum of 6 months prison time for employers who engage in the practice of knowingly hiring unauthorized aliens.
How can you protect your business against such fines and penalties? The most simple and cost-effective way you can ensure compliance is to conduct a self-audit of your I-9s. The most common result of an ICE audit is fines for technical recordkeeping violations. Employers are always free to correct errors before a formal audit occurs. Some of the more common errors made in completing the I-9s that can trigger fines are:
- Failure to re-verify the work authorization of employees (employee identification has expired)
- Failure to complete the I-9 in a timely manner. Section 1 must be signed by the end of the first workday of the employee. Section 2 must be completed and signed by the employer no later than 3 business days after the employee begins work
- Failure to record information in every section, even if it is not applicable (N/A)
- Failure to discard I-9s that are no longer required to be maintained. I-9s must be kept for 3 years past the date of hire or 1 year after the end of the employment, whichever is later.
I-9 Self Audit
The best practice to help manage I-9 compliance is to perform periodic self-audits. The goal is to identify I-9s that are missing, incomplete or have issues.
- Obtain a list of all current employees hired since November 6, 1986.
- Obtain a list of all former employees terminated within the last three years.
- Gather all Form I-9 documents for all current and former employees and identify those that are missing.
- Download and review the most current version of the USCIS M-274 Handbook. The M-274 covers everything from why employers must complete Form I-9 to guidance for each section.
- Review each I-9 on file to ensure they are completed correctly, completely, and that the verification document is current.
- Immediately complete any missing or incorrect Form I-9’s for employees in the last three years.
- Destroy I-9s that have met the retention requirements. You must keep Form I-9 on file for all current employees. A terminated employee’s Form I-9 must be retained for three years after the date of hire OR one year after the termination, whichever is later. Don’t waste time auditing and correcting I-9’s you no longer need, just destroy them.
- Maintain a separate file for all I-9’s, do not keep them in the individual employee file.
Correcting Mistakes
If during the audit process you uncover a mistake, you have two options: to correct the existing form OR prepare a new Form I-9. If you choose to correct the existing form, line out the incorrect portions, enter the correct information and initial and date the correction. If you opt to fill out a new form, always retain the old form, and attach a short memo to both the new and old Form I-9s stating the reason for the action.
Mistakes found in Section 1 of a form must be corrected by the employee, not the employer. Do not destroy incorrect I-9s. Have an employee correct, initial and date the corrected form. Errors found in Sections 2 or 3 of a form may be corrected by the employer. The same no-destruction and correction rules apply.
If you discover you are missing the Form I-9 for an employee, provide the employee with a form, complete it as soon as possible, DO NOT backdate the form, and attach a signed and dated explanation of what occurred and why.
Important notes
It is critical to follow the instructions for filling out Form I-9 completely and on-time to ensure compliance.
- Use the most up-to-date I-9 form. For all new hires, the current form is dated 07/07/2017 in the bottom-left corner.
- All employees must complete Section 1 no later than the first business day of employment for pay.
- New employees must provide ONE document from List A or ONE document from List B and ONE from List C
- Section 2 of the I-9 must be completed by the employer no later than three business days after the employee begins work for pay.
- The employer must examine original documents (not photo copies) provided by the employee and make sure they are not expired.
- Do not keep copies of identification that are not needed for compliance.
Please be aware that this is not a full representation of an internal I-9 audit. For a more complete reference on performing an I-9 audit per ICE standards refer to the following link: https://www.ice.gov/sites/default/files/documents/Document/2015/i9-guidance.pdf
If you are interested in having Campbell & Watson, CPAs, PC perform an I-9 audit of your business please call our office to schedule an appointment. We will be scheduling audits starting February 11th.
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