Ag Employment – Verifying The Legal Status of Employees

Overview

In late 2016, I blogged on the issue of what ag employers need to do to verify employment and provided a survey of the primary employment laws and their application to agricultural employers.  The issue has increased in importance recently, so it’s a good time to brush the dust off that blog post and update it.

Verifying the legal status of ag employees – that’s the topic of today’s post.

Ag Employment Data

Most estimates peg the total number of persons working on farms and ranches in the United States at approximately 3 million. Hired farm workers make up approximately one-third of that total.  Of that number, about half 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 were born in Mexico. 

According to the National Agricultural Worker Survey (NAWS), approximately 48 percent of farmworkers lack work authorization. However, this estimate may be low due to a variety of factors.  But, this number is likely low because a worker not in the country legally may not complete the survey or may complete it untruthfully.  Due to this, estimates assert that at least 70 percent of the ag workforce is not working in the United States legally.  Over 90 percent of the ag immigrant labor comes from Mexico.

This presents a very real problem for ag employers.   

Form I-9

In late 2016, the U.S. Citizenship and Immigration Service (USCIS) updated Form I-9 and the related instructions.  Beginning on January 22, 2017, the update Form I-9 became mandatory for employers to use when hiring persons. 

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 all identity documents an employee presents to determine whether the documents 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.  In 2016, 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. 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. 

E-Verify

E-Verify is a web-based system operated by the Department of Homeland Security (DHS).  The system allows an employer to confirm the eligibility of an employee to work in the United States.  E-Verify involves an electronic match of identity and employment eligibility of new hires.  The system matches the Form I-9 information against the records of the Social Security Administration and the Department of Homeland Security.

The E-Verify system is not mandatory (except for federal contractors, vendors and agencies).  However, employers use it to make sure that a new hire is in compliance with federal law.  It is a no-charge system.  More than 600,000 employers used the E-Verify system in 2016.

States can mandate the use of E-Verify.  While federal law generally pre-empts most state authority on immigration, it does not do so with respect to licensing and similar laws.  Indeed, a challenge to the Arizona law requiring a business to use E-Verify or lose its state business license upon hiring a worker not in the United States legally failed when the U.S. Supreme Court held that federal law did not pre-empt the Arizona law.  United States Chamber of Commerce v. Whiting, 563 U.S. 582 (U.S. 2011).  Iowa, for example, has made numerous attempts to pass legislation requiring employers to utilize the E-Verify system with no success.  The Iowa legislation, most recently S.F. 412 introduced during the 2018 legislative session, was modeled after the Arizona legislation. 

 

Conclusion

The proper documentation of employees is critically important.  There are indications that the federal government is now looking more closely at employer hiring practices.  That makes compliance with Form I-9 requirements even more important.  In addition, it makes sense for an ag employer to utilize the E-Verify system.  Failure to do so could result in really bad consequences for the business.