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The Increasing Cost of Form I-9 Non-Compliance

Imagine it’s your first day of work in the HR department, and you’ve been given the dubious honor of “cleaning up” your employer’s Form I-9 files. Initially, visions of scattered file boxes and forms dance in your head, filled with dusty reminders of individuals hired years ago. There will be dog-eared manila folders, paper clips stretched beyond their size, and un-sticky post-it notes, long since abandoned with the passage of time.

But then you realize it’s actually much worse than you thought. For when your boss kindly asked you to “clean up” the I-9 forms, he was actually talking about a cleansing of a different sort – the kind which is necessary to correct all of those insidious errors and omissions hiding in plain site on your forms. And as you quickly learn, it’s oh so easy to make a mistake! All it takes is a missing date, incorrect document choice, or a forgotten signature to turn your relatively benign-looking I-9 form into a ticking time bomb of liability.

A question though inevitably rises as you ponder the mess in front of you – does this really even matter? Surely, the fines for incorrect paperwork violations must be fairly small, right?

Guess again – as it turns out, the penalties for simple I-9 transgressions can be quite significant, particularly for employers with frequent turnover. For example, during an inspection, a government agency can assess a civil monetary penalty for each and every Form I-9 that has at least one substantive (i.e., serious) or uncorrected technical violation. Moreover, the actual fine amount is based on a sliding scale – the more errors you have as a percentage of the whole, the more each violation will potentially cost you.

And beginning today (August 1, 2016), the fine amounts for I-9 violations will almost double in size – courtesy of a new rule that was announced by the Department of Justice in June. Specifically, the DOJ is increasing civil monetary penalties across the board in order to account for inflation and to ensure that the fines continue to maintain their deterrent effect.

Below are just a few of the notable increases that will have far-reaching impact for employers with I-9 and E-Verify problems. It’s important to note that while these new penalties will go into effect today (August 1, 2016), they will only apply to violations occurring after November 2, 2015.

Form I-9 Paperwork Violations:
Previous fine: $110 to $1,100 per violation
New fine: $216 to $2,156 per violation

E-Verify – failure to notify DHS of continuing employment when employee receives Final Non-Confirmation
Previous fine: $500 to $1,000 per worker
New fine: $751 to $1,502 per worker

Unfair Immigration-Related Practices (First Order):
Previous fine: $375 to $3,200 per worker
New fine: $445 to $3,563 per worker

Unfair Immigration-Related Practices (Document Abuse):
Previous fine: $110 to $1,100 per worker
New fine: $178 to $1,782 per worker

In addition, the penalties for knowingly hiring, recruiting, referring, or retaining an unauthorized worker will increase per unauthorized individual to $539 to $4,313 for the first offense; $4,313 to $10,781 for the second offense; and $6,469 to $21,563 for subsequent offenses.

Key Take-Aways For Employers
In light of these increasing fines and recent audit activity, employers must pay very close attention to their current I-9 policies and procedures to completely eliminate (or at the very least reduce) the chances of errors and mistakes. Here are three strategies that are now routinely followed by employers today:
1. Review your current I-9 policies and practices with counsel:  employers (ideally with the assistance of counsel), must carefully analyze their current I-9 policies and procedures to ensure they are complying with the latest I-9 and E-Verify rules. As part of this process, employers should develop a formal I-9 and E-Verify policy document which outlines all of the various I-9 and E-Verify tasks and responsible parties.

2. Improve the Process: mistakes are inevitable unless you implement a fool-proof process for detecting and preventing I-9 violations. Many employers today utilize a smart electronic I-9 system which can instantly alert you (and your new hire employee) of errors or omissions and facilitate the overall management of your I-9 and E-Verify process.

3. Correct historical I-9s now (while you can): fortunately, the law enables employers to wash away the sins of the past and avoid fines and penalties for certain types of technical or procedural errors (which just so happen to be very common in the I-9 world). While a remediation project can be a daunting task, employers can take advantage of automated tools which facilitate the correction process while ensuring compliance with ever-changing rules.

Need more information on Form I-9 penalties and remediation strategies? Please contact us with any questions you might have!


About John Fay

John Fay is an immigration attorney and technologist with a deep applied knowledge of I-9 compliance and E-Verify rules and procedures. During his career, John has advised human resource managers and executives on a wide variety of corporate immigration compliance issues, including the implementation of electronic I-9 systems. In his current role, John serves as President at the LawLogix division of Hyland Software, Inc., where he oversees all aspects of the division’s operations and provides strategic leadership and direction in the development and support of Form I-9, E-Verify, and immigration case management software solutions.

Human Resources Today