Signing Section 2 of the I-9? Don’t Forget to Read the Fine Print!

Tired of reading about Form I-9 fines and penalties? Looking for a break from E-Verify angst and anxiety? Look no further – for today, I bring you the first in series of I-9 and E-Verify tales (based on real-life cases) which will hopefully shed some light on the enigmatic process of verifying employment eligibility in the U.S. As with most story retellings, I’ve taken a few small liberties (for dramatic effect), but I assure you the facts of this case are very real – serving as a warning to all employers who still think the I-9 is just a simple two-page form…

Our first story is based off of U.S. v. Employer Solutions Staffing Group II, LLC.

The Audit

It was a cold Thursday afternoon at the Texas manufacturing plant when ICE showed up. And it was not the kind of ICE you expect nowadays in early February, but rather the Immigration and Customs Enforcement (“ICE”), the largest investigative arm of the Department of Homeland Security. The ICE agent was pleasant (if not particularly cordial) as she handed over the Notice of Inspection  – that dreaded document which commands an employer to produce I-9 records for government inspection and review (aka, the “audit”).

The shift manager took it all in stride (no reason to panic after all right?) and delivered it to his boss on the second floor. The boss was similarly calm – nothing to worry about here. We have a staffing company who takes care of all of our hiring needs. And they are actually located right in this building. Just send it to them, and they will take care of it.

Three days had passed when the ICE agent receives a phone call from a company called Flexicorps, the staffing company mentioned above. The staffing rep explains that their company actually takes care of all the hiring for the manufacturer, and they would be happy to work with the agent. Okay, maybe happy is a strong word, but no reason to be discourteous when speaking with law enforcement. The ICE agent thanked him for the call and promptly sent him a NOI to produce I-9s for individuals working at the manufacturing plant. No problem, said the Flexicorp rep – please expect them in a few days.

Whose employees are these anyway?

The ICE agent sat down at the table, ready to review the batch of I-9s. She carefully reviewed the 242 I-9s, looking for the usual suspects. She chuckled to herself – I wonder what I’m in for today? Half-completed forms? Backdating? Maybe even a signature stamp in section 1 if I’m lucky? One thing immediately seemed odd – all of the forms appeared to be executed by yet another company called Employer Staffing Solutions Group (ESSG). A quick call to Flexicorps confirmed this fact – ESSG acts as a subcontractor and actually provides the employers to the manufacturing company. Another phone call and another NOI – and finally the ICE agent had found the real employer. Time to get out that red pen…

The Fine

Fast-forward 2 years, and it’s another cold February day (colder still, because now we’re in Minnesota at the corporate headquarters of ESSG). It had been business as usual at the growing company, but now they were in for some bad news. ICE had finished the review of the 242 I-9s, and had found 243 violations for a total fine exceeding $227,000! The payroll admin was flabbergasted – this can’t be right. Each one of those forms was properly completed according to our well-established protocol for handling clients’ I-9s. How did they arrive at 243 violations of 8 U.S.C. §1324a(a)(1)(B)? And what does that even mean?

The I-9 Process Gone Awry

As it turns out, ESSG had an interesting method for completing I-9s. And as HR managers know all too well, interesting is usually not a good strategy when it comes to matters of compliance. As mentioned earlier, ESSG actually worked hand in hand with Flexicorps to provide staffing to the Texas manufacturing company. They had a well-documented I-9 process designed to streamline employee onboarding while at the same time ensuring compliance with verification rules. Here’s how it worked:

Rob, Irene (and later Roberto) from Flexicorps made all the hiring decisions for temporary workers at the manufacturer’s El Paso plant. We’ll call them the I-9 team for now. Newly hired employees completed and dated section 1 of Form I-9 on or before the first day of work, and the I-9 team examined the documents the workers presented. In examining the workers’ documents, the I-9 team verified that the documents were on the list of acceptable documents, appeared genuine and related to the employees, and evidenced unexpired employment eligibility. And to round it all out, the I-9 team copied the employees’ documents (in color, no less!)

Now I know what you’re thinking – what could possibly be wrong with this process? Here’s where it gets interesting. As it turns out, the I-9 team had one more task after verifying and recording documents in section 2: they would attach the I-9 forms to a new hire packet and forward it by FedEx to ESSG in Minnesota for signature in section 2. Now, if you’re new to the world of I-9, this might all sound fine and dandy. As it turns out though, there’s one small problem – the I-9, very clearly, includes an attestation in section 2 for which the signatory is responsible. It states:

I attest under penalty of perjury, that I have examined the document(s) presented by the above-named employee, that the above-listed document(s) appear to be genuine and relate to the employee named, that the employee began employment on _______ and that to the best of my knowledge the employee is authorized to work in the United States.

And therein lies the problem, says the ICE agent. Based on the evidence submitted, none of the 242 I-9s presented for inspection were actually signed by the person who verified the documents in person (with the employee). Instead, virtually all of them were signed by an ESSG employee 1,300 miles away who only saw photocopies. Moreover, the regulations at 8 C.F.R. § 274a.2(b)(1)(v) expressly provide that “[t]he individual may present either an original document which establishes both employment authorization and identity, or an original document which establishes employment authorization and a separate original document which establishes identity.” Houston, we definitely have a problem.

Agency Law to the Rescue?

The court decision reveals that ESSG took a very different approach on this whole section 2 signer business. They admitted (without any equivocation) that none of the signatories actually saw the documents to which they were attesting in section 2. They went on to argue however that the rules of agency actually permit this I-9 procedure, because general agency law attributes the principal’s knowledge to the agent, and the agent’s knowledge to the principal (basically, a fancy way of saying that if you saw the original documents, it’s as if I saw the documents since you’re my agent). Ah, if only I-9 procedures were that easy…

While acknowledging the agency argument to be somewhat unique and creative, the court nevertheless found it to be unpersuasive for one very simple reason: nothing in agency case law would permit a principal or the agent to attest under oath that he or she personally performed actions that the individual did not in fact perform. Darn that I-9 section 2 language!

Can I get an “A” for effort?

ESSG also tried another unique argument (which similarly fell flat). The conversation could have gone like this: “Even if you don’t like our 2-man section 2 process, you have to admit that we took a lot of other steps to ensure we’re hiring a legal workforce. For example, here’s a comprehensive chart of the E-Verify results for the employees, as well as the time elapsed between each employee’s first date of work and the date section 2 of the individual’s I-9 form was signed. Can’t this count for something?”

Sadly, no. The court reminded ESSG that use of the E-Verify program does not provide an excuse for failing to properly complete section 2 (and in fact, E-Verify states very clearly that completing the I-9 first is always a pre-requisite). The company also tried to argue that the signing process violations were technical/procedural, but once again, the court would have none of it. In the end, ESSG was ordered to pay $935 for each of the 242 false attestations and an additional $985 for one missing I-9 (total penalty equaling $227, 251).

Efficiency vs. Compliance

I’ve spoken to many HR reps about this case since it was published earlier this year. To their credit, most would never fall into the ESSG trap because they know full well that the person who examines the documents must be the same person who signs section 2. And yet, I think this case is still quite important because it illustrates the ever-present conflict between onboarding efficiency and compliance. Who among us hasn’t been tempted to take an I-9 or E-Verify short cut just to save some time? And in doing so, have we crafted arguments that sound a lot like ESSG’s creative process?

Lessons Learned

Every good I-9 story needs a moral (or in this case, a few). Here are the ones that I think are worth noting:

  1. The most obvious (of course) is that the person who examines the I-9 documents must be the same person who signs section 2. Practically speaking this means that you’ll need someone to be physically present with your new hire to review documents and make that all-important attestation in section 2.
  2. Subcontracting I-9 services can be very tricky business  (especially when there are multiple staffing agencies involved). When in doubt, make sure to review your I-9 process steps with experienced immigration counsel to make sure they pass muster.
  3. If you’re signing section 2 of an I-9, remember that you’re signing an attestation before the federal government under penalty of perjury. So reading that language very closely is probably a good idea.
  4. Consider using smart electronic I-9 software which guides (and reinforces) best practices for completing section 2. A well-designed system will require the section 2 signer to be the same individual who records the document information and will also feature solutions for hiring truly remote employees.

Stay tuned for our next tale of I-9 mystery and intrigue!