Best Practices for Form I-9 Retention and Destruction
By now, we all know and understand that the Form I-9 is often a breeding ground for mistakes, some of which can have significant repercussions while others are of little concern. For example, no one in HR is likely to lose sleep over a missing employee zip code in Section 1 of the form. But a failed or missed reverification, on the other hand, will cause a firestorm of auditing, remediation, and review to protect the organization from potential I-9 compliance fines and penalties.
Yet despite all of the potential I-9 “paperwork” risk described above, employers often miss out on one of the very few free lunches in I-9 compliance: shredding or purging all of those really old and errant I-9s that are beyond the Form I-9 retention requirement.
In today’s blog, we’ll review the often-confusing rules regarding Form I-9 retention, discuss how I-9 destruction (or rather, the lack thereof) can get you into trouble, and provide best practices for the ongoing management of your I-9 retention obligations.
And as a bonus, I’m providing a link to a pre-formatted Excel worksheet that will automatically calculate the I-9 purge date (see disclaimers below).
I-9 Retention: What the Law Says
We’ll begin with the regulatory text, which admittedly could have been written in a clearer fashion (big surprise, I know). In a nutshell, the law states that an employer must retain an employee’s Form I-9 for “three years after the date of hire or one year after the date of the individual’s employment is terminated, whichever is later[.]” § 274a.2(b)(2)(i)(A).
Now, some employers have read that requirement (hastily perhaps) and interpreted it to mean that they could destroy I-9 forms of their current employees after a 3-year period. But if you read it again, you will note that the retention obligation extends to the later of 3 years after hire or 1 year after employment ends. So in other words, the retention period for an I-9 only comes into play after the employment is terminated, for whatever reason.
More recently, the USCIS has attempted to clear-up the confusion regarding when to begin the Form I-9 purge calculation in both the Form I-9 instructions and the accompanying M-274 Handbook for Employers. The Form I-9 instructions note the following:
Once the individual’s employment ends, the employer must retain this form and attachments for either 3 years after the date of hire (i.e., first day of work for pay) or 1 year after the date employment ended, whichever is later.
And the most recent edition of the M-274 goes even further by warning employers of the following:
- Never dispose of a current employee’s Form I-9
- You must keep it for as long as the employee works for you, and for a certain amount of time after they stop working for you
- This requirement applies even if the employee ends employment shortly after you hired them
- Only when an employee stops working for you should you calculate how much longer you must keep their Form I-9
Calculating the Form I-9 Retention Period
Figuring out the Form I-9 retention period has long been a source of frustration for employers, primarily because the actual “purge date” varies based on how long the employee had been with the organization. As described above, both the regulations and the Form I-9 instructions indicate that once an individual’s employment ends, the employer must retain the I-9 and accompanying documents for either 3 years after the date of hire (i.e., first day of work for pay) or 1 year after the date employment ended, whichever is later.
The M-274 also provides employers with another way of thinking about this. Specifically, the handbook instructs employers to separate termed employees into two different buckets:
(1) If the employee worked for less than two years, you should retain their form for three years after the date you entered in the First Day of Employment field.
(2) If the employee worked for more than two years, you should retain their form for one year after the date they stop working for you.
Personally, I like this method as it can help you easily determine the retention period by simply eyeballing the hire date and the termination date for a given employee. For example, imagine you have an employee who was hired on April 28, 2014 and terminated on October 31, 2016. Examining the two dates, you can quickly see that the individual was employed for more than 2 years, so you know the one-year after term calculation will apply.
The Problem with Form I-9 Excess Baggage
Many employers have (knowingly or not) adopted a laissez faire attitude to I-9 purging by choosing to keep their I-9s beyond the retention period and to “sort it all out” in the event of an inspection by the government. The problem with this approach is that employers are typically only provided three business days to produce I-9s (and associated documentation) in the event of a Notice of Inspection (NOI) from Immigration and Customs Enforcement (ICE).
And in the mad dash of responding to the NOI, employers may not have the time or resources to remove or pull-out those purgeable I-9s from the documents sent to ICE. When this occurs, the agency may review and consider those I-9s (which historically tend to have the most errors) in assessing paperwork fines and penalties against the employer.
But wait, you say, that doesn’t seem right, especially when the law permits employers to dispose of I-9s that are beyond the retention period! Correct you are my manufactured friend. And in reality, ICE will often remove these I-9s from penalty consideration – either during negotiation or as a result of an administrative hearing.
But engaging in that negotiation (or administrative appeal) process is a slow and costly endeavor – one that could have been prevented through a controlled and systematic purging of I-9s that no longer need to be retained.
Timely purging is also a great general risk mitigation strategy as well (regardless of the I-9 compliance liability), especially considering that a completed I-9 contains a slew of personally identifiable information, such as an employee’s name, Social Security number, address, as well as various forms of sensitive document information (often including copies too!)
Best Practices for I-9 Retention and Purging
If you’re still scratching your head over the Form I-9 retention obligations, don’t worry, you’re in good company. But fortunately, there is an easy solution to this conundrum: start using electronic I-9 software to calculate the retention period for you.
A well-designed electronic I-9 application will enforce the retention rules discussed above with regards to both new “electronic” I-9s generated within the software as well as “historical” paper or electronic I-9s that have been migrated into the platform. Customers can then easily report on I-9s that have met their retention obligation and initiate purging through a deliberate admin-level batch operation.
The electronic I-9 application should also enable and support ongoing “employee status updates” from the employer’s HRIS or other system of record so that separations or terminations can be automatically recorded and tracked without the need for manual HR updates or intervention.
But be careful of systems that “over-automate” the purging process by automatically deleting I-9 and supporting documents without giving the employer the opportunity to review and validate. Generally speaking, once an I-9 has been purged, it’s gone forever, and so most employers will want a system with appropriate checks and balances in place.
Low Tech Solution with Disclaimer
Last but not least, I often receive requests for a simple (but useable) tool to help validate an employer’s calculation of its I-9 retention obligations. And so I present to you the “LawLogix Sample I-9 Retention Calculator” that can be used for this purpose.
All you need to do is to enter the employee’s hire date (i.e., start date) and termination date, and the spreadsheet will tell you the date on which the I-9 can be purged.
As with all such free tools, please note this is provided for educational purposes only and is not intended as legal advice. So in other words, your best bet really is the electronic I-9 solution…