Verifying Employment – New Form I-9; The Requirements and Potential Problem Areas

Overview

The U.S. Citizenship and Immigration Service (USCIS) has updated Form I-9 and the related instructions.  While the new Form is now available for use, employers must begin using it by January 22, 2017.  After that date, all prior versions of the Form will no longer be valid.  The new Form contains significant changes and new features. 

The Form I-9 is a big deal when applied to workers for agricultural operations.  According to USDA data, the approximately one-million hired farmworkers make up a third of all of the people working on farms.  About half of these are full-time workers, and about twenty-five percent are ag service workers that are contract hires.  A slight majority of the hires work in crop agriculture with the balance working in the livestock industry.  Two states – California and Texas account for more than a third of all farmworkers.  According to the USDA data, 59 percent of farm laborers and supervisors are U.S. citizens (compared to 91 percent for all U.S. workers).  The data also show that about 70 percent of hired crop farmworkers are born in Mexico.      

So, Form I-9 compliance is often encountered in agriculture.  When is the Form required to be completed?  Why complete it?  What other rules apply?  What are the penalties that might apply?  That’s the focus of today’s blog post.

What is Form I-9?

The Form is used for verifying the identity and employment authorization of individuals hired for employment in the U.S.  All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the U.S., whether the employment involves citizens or noncitizens.  While agriculture is often exempt from or treated differently in many situations, that is not the case with respect to Form I-9.  There is no exception based on the size of the farming operation or for farming businesses where a majority of the interests are held by related persons. 

Form I-9 applies to employment situations.  It doesn’t apply to situations where a farmer hires custom work or other work to be done on an independent contractor basis.  Whether a situation involves the hiring of an employee or an independent contractor basically comes down to the issue of control over the work.  If the farmer controls the means and method of the work, then it’s likely to be an employment situation that will trigger the use of Form I-9. 

Completing the Form

Both employees and employers (or an employer’s authorized representative) must complete the form within three days of the hire. On the form, an employee must attest to their employment authorization. The employee must also present his or her employer with acceptable documents evidencing identity and employment authorization. The employer must examine the employment eligibility and identity document(s) an employee presents to determine whether the document(s) reasonably appear to be genuine and relate to the employee.  The employer must also record the document information on the Form I-9. The list of acceptable documents can be found on page three of Form I-9. Employers must retain Form I-9 for a designated period and make it available for inspection by authorized government officers. 

The form itself is comprised of three sections. 

• Section 1 is for the reporting of employee information and attesting to that information. The employee has to attest that they are a citizen, a noncitizen national of the U.S., a lawful permanent resident or an alien that is authorized to work until the time specified in the document.  If the employee is an alien that is authorized to work, they must provide their alien registration number/USCIS number or their Form I-94 admission number, or their foreign passport number and list the country of issuance.  The employee must sign the form and date it.  Likewise, the employer must also sign and date the form and provide their address.  The employee selects the appropriate Citizenship/Immigration status in this section.  Also, the new Form I-9 contains a box where the employee indicates if they did not use a translator or preparer in completing Section 1.
• Section 2 is a certification of the employer’s review and verification of the documents of the new hire. On the new form, there is a “Citizenship/Immigration Status” field where the employer is to select (or write) the number that corresponds with the Citizenship/Immigration status that the employee selected in Section 1.
• Section 3 pertains to reverifications and rehires. This section lists the acceptable documents that employees can select from to establish their identity and their employment authorization.

The form is to be completed in English, unless it involves and employer and employees that are in Puerto Rico.

Filing the Form

The I-9 doesn’t get filed with any government agency.  It doesn’t get filed with the USCIS or the U.S. Immigration and Customs Enforcement (ICE).  Instead the employer simply keeps the completed Form I-9 on file for each person on their payroll who is required to complete the form. An employer has to retain Form I-9 for three years after the date of hire or for one year after employment is terminated, whichever is later.  It must also be made available for inspection by authorized U.S. Government officials from the Department of Homeland Security, Department of Labor, or Department of Justice.

The form can be completed via computer, but it is not an electronic Form I-9 that is subject to the electronic Form I-9 storage regulations.  Instead, Form I-9 is to be printed, signed and stored as a hard copy.  If it is completed on a computer, the new form has new drop-down screens, field checks and instructions that are easily accessible. 

Penalties

Earlier this year the U.S. Department of Justice increased the penalties that can be imposed on employers that hire illegal immigrants.  The minimum penalty for a first offense is now $539 (up from $375) and the maximum penalty is $4,313 (up from $3,200).  These new amounts are effective August 1, 2016.  The minimum penalty for failing to comply with the Form I-9 employment verification requirements is $216 for each form (first offense) and the maximum penalty is $2,156 per form.  There are also other penalties that can apply, and the failure to complete the Form I-9 paperwork properly and completely can lead to multiple fines getting stacked together.  For example, in 2015, an employer was ordered to pay a fine of over $600,000 for more than 800 Form I-9 violations.  The fines were primarily the result of the failure of the employer to sign Section 2 of Form I-9.  That’s the section, as noted above, where the employer certifies within three days of a hire that the employer has reviewed the verification and employment authorization documents of a new hire.  The penalties arose from the hire of union employees who worked for the employer on a project-by-project basis during the term of a collective bargaining agreement.  The workers were not terminated when they completed a project and remained “on-call.”  The employer didn’t complete a separate Form I-9 apart from what the union provided and didn’t sign Section 2 of the union form.     

Mistakes - Potential Problem Areas

So, with the possibility for penalties for improper completion of Form I-9, what are the biggest potential areas of pitfalls?  Some basic ones come to mind – incorrect dates, missing signatures, transposed numbers and not checking boxes properly.  Also, the correct document codes have to be recorded for each identification method.  An employer should also make sure to ask for only those documents that are necessary to identify the employee.  Not too many or too few.  Requesting too many can lead to a charge of discrimination; too few can trigger a violation for an incomplete form. 

Other mistakes can include failure to comply with the three-day rule, failure to re-verify and get updated documents from employees.  Also, it is a good idea to get rid of outdated forms.  Any outdated forms that exist can lead to penalties if discovered in an audit. 

Conclusion

The proper documentation of employees is critically important.  With a change in Administration coming and a new view toward enforcement of existing laws with respect to immigration, the compliance with Form I-9 requirements should be at the top of each employer’s list, ag or non-ag.