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How to prepare for an I-9 audit

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in Hiring,Human Resources

Companies that think they can fly under the U.S. Immigration and Customs Enforcement's (ICE) radar could be making a costly mistake.  An ICE investigation can be triggered at any time by a tip from a disgruntled employee, customer, or other "concerned citizen."  ICE has also identified Form I-9 audits as the most important administrative tool in building criminal cases and bringing employers into compliance with the law. 

To that end, the agency has increased the issuance of Notices of Inspections (NOIs) to employers across the country.  Since July 2009, ICE has issued more than 2,000 NOIs to businesses nationwide.  NOI recipients are given only three business days to prepare for a meeting with federal officials, during which officials inspect in depth the employer's I-9 employment verification forms and payroll documentation.

Employers need to take I-9 compliance seriously because there are multiple errors that an auditor could uncover that would result in a fine.  For example, if the auditor discovers that 200 of your forms had a minor mistake, that would result in a minimum fine of $22,000.

Preventing mistakes now also includes implementing policy and procedural changes as required by the final rule on electronic signatures and storage of Form I-9 that became effective on Aug. 23, 2010.

Determine whose I-9s you should have on file

Employers should have I-9 forms on file for all active employees hired after Nov. 6, 1986.  (Independent contractors, contractors or subcontractors, and domestic household help employed on a sporadic or intermittent basis need not complete and submit Form I-9.)  Employers should also still have I-9s on file for employees whose employment was terminated within three years of the audit date.

Check I-9 forms of active employees

Look for these common Form I-9 mistakes.

  • Employee or employer did not sign or date the form.
  • Employee checked no or multiple boxes in Section 1 attesting to their status.
  • Employee checked the bottom box of Section 1, but did not include an applicable expiration date.
  • Employer recorded too many documents under List A or Lists B and C.
  • Employer recorded one document under List B, but not List C (or vice versa).
  • Employer did not record the date of hire in the Certification section of Section 2.
  • Information is entered in the wrong place on the form.

How to correct forms of active employees

When making corrections to a current employee's I-9 form, make changes directly to the form.

  1. Cross out incorrect information, if applicable.
  2. Fill in correct information.
  3. Initial and date the change.

If a form for a current employee is missing, complete a new one, but do not backdate it.  Note and initial that the original form was lost and that a new one was created.

If you find that incorrect or incomplete documentation was used for I-9 verification, contact the employee and inform them of the need to provide new documents.

If employment authorization documents have expired, you must go through the reverification process.

Reverification process

Forms need to be updated if:

  1. employees originally presented employment authorization documents that have an expiration date, or
  2. employees terminate and are rehired before their I-9 has been destroyed or before their documents have expired.

To reverify, choose one of two options:

  1. complete Section 3 of the original I-9, or
  2. complete a new I-9 form.

Note: If the original I-9 form predates the Feb. 2, 2009 version of the form, you must complete Section 3 of the latest version of the I-9 form.

Check I-9 forms of terminated employees

While you do not have to retain I-9 forms for every single employee your organization has ever terminated, I-9 forms must be kept for three years from the date of hire or one year from the date of termination, whichever is longer.  If an employee has been with the company for more than three years, you must retain the I-9 form for one year after termination.  If the employee has been with your company for less than three years, determine which date is later — three years after the date of hire or one year after the employee left.

When a person who was previously employed is rehired and the original Form I-9 was updated, it must be kept for three years from the initial date it was completed or one year after the employee is terminated, whichever is later.

To identify whether you have properly retained the I-9s of terminated employees, create a list of terminated employees and then compare their hire and fire dates.

  1. Destroy those forms that have been retained past the allowable destruction date.
  2. Forms that are missing, but that should be there, should be noted on the list of terminated employees.  However, those former employees do not need to be contacted.
  3. Segregate those forms that require corrections.

How to correct forms of terminated employees

When making corrections to the I-9 of a terminated employee, keep these guidelines in mind.

  • A documentation error can only be caught and corrected if photocopies of the documents are attached.  If you cannot make corrections (i.e., photocopies are missing), simply note this on the list of terminated employees.
  • Missing hire dates can be resolved by checking your personnel records.
  • Do not fill in a missing employer signature or date if you have not reviewed the original documents.
  • Do not contact former employees to fill in a missing signature or date.

Storing I-9 forms

Employers must retain I-9 forms; I-9s forms should not be submitted to the government.

Recommended (but not required): Keep I-9 forms in a secure file that is separate from your general personnel files.  Why?

  • For reverification and disposal purposes.
  • In case of government inspection.
  • To reduce the risk of discrimination claims.

Best practice: Set up a binder or file folders with alphabetical tabs, a reverification tab, and yearly tabs.

Alphabetical tabs.  For current employees whose I-9 forms do not require updating and reverification, file their forms using the first letter of their last name behind the appropriate alphabetical tab.  The form should stay behind that tab until termination.

Reverification tab.  For current employees whose forms do require updating and reverification:

  • Check forms for document expiration dates.
  • Log these expiration dates on a tracking sheet.
  • Remind employees at least 90 days in advance of the expiration date.

Note: Employees have the option of presenting any documents that satisfy List A or Lists B and C; they do not have to present new versions of the documents they originally presented.

File these forms behind the reverification tab in alphabetical order with the tracking sheet in the front.

Yearly tabs.  To reiterate, the date the forms may be destroyed is the later of three years after date of hire or one year after date of termination.  File terminated employees' forms chronologically by month behind the appropriate yearly tab. 

  1. Identify the date of hire and add 3 years = Date A.

    Example: 11/01/2003 + 3 years = 11/01/2006

  2. Identify the termination date and add 1 year = Date B.

    Example: 2/15/2007 + 1 year = 2/15/2008

  3. Compare Date A and Date B.

    Example: 11/01/2006 versus 2/15/2008

  4. File the form by the later of the two dates.

    Example: 2/15/2008 comes later than 11/1/2006, so place the I-9 form behind the 2008 tab.

Electronic I-9 forms

ICE had published an interim final rule in June 2006 to permit employers to complete, sign, scan, and store I-9 forms electronically, as long as certain performance standards set forth in the final rule for the electronic filing system are met.  The final rule, which became effective Aug. 23, 2010, adopts the interim final rule with minor modifications. 

Specifically, the final rule makes these clarifications.

  1. Employers must complete I-9 forms within three business (not calendar) days.  (The interim final rule inadvertently omitted the word "business.")

    Note: Shortly before the rule was published, ICE clarified that an employee's first day of work is not included in the three-business-day calculation.  Therefore, if an employee begins working on Monday, the third business day would be Thursday (assuming that Monday through Thursday are business days for the employer).

  2. Employers may use paper, electronic systems, or a combination of paper and electronic systems.

  3. Employers may change electronic storage systems as long as the systems meet the performance requirements of the regulations.  The rule does not specify systems or processes due to the constant changes in technology.

  4. Employers need not retain audit trails of each time a Form I-9 is electronically viewed, but only when the form is created, completed, updated, modified, altered, or corrected.  Then, a secure and permanent record must be created that establishes the date of access, the identity of the person who accessed the record, and the particular action taken.

  5. Employers may provide or transmit a confirmation of a Form I-9 transaction, but are not required to do so unless the employee requests a copy.  The confirmation need not be provided at the time of the transaction, but must be provided within a reasonable amount of time.

The final rule clarifies that I-9 forms may be stored in a separate Form I-9 file or as part of the employee's other employment records.  Only the pages of the I-9 containing employer- and employee-entered data need to be retained.  You do not have to retain the instructions for completing the form.

Also, you may, but are not required to, store an electronic image of the documents employees submit to establish their identity and work eligibility.  Either way, you must apply consistent policies and procedures for all employees to avoid the perception of discrimination.

Prevent future problems

The best time to catch Form I-9 mistakes is at the time of the initial completion of the form.  Be on the lookout for these common errors. 

Section 1, which must be completed by the close of business on the employee's first day of work.

  • Check that the name is written in the order requested — last, first, then middle initial.
  • Check that the date of birth is written in the order requested — month, day, then year.
  • Check that the Social Security number (SSN) has nine digits. Note: SSNs are not required unless you are participating in E-Verify.
  • Check that only one box has been checked, and a number has been filled in where requested.  Note: You may not ask employees to show you their documents to verify the Alien or Admission number.
  • Check that the employee signed and dated the form.
  • Ask employees to write "N/A" for "not applicable," instead of leaving boxes blank.

If the employee needed a translator to complete Section 1, or if someone other than the employee completed Section 1:

  • Check that the preparer/translator signed the box for "Preparer's/Translator's Signature," and the employee signed the "Employee's Signature" box.
  • Check that the preparer/translator dated the Certification section.  The date should match the date next to the employee's signature.

Note: There is a Spanish-language version of Form I-9, but it may only be used by employers in Puerto Rico.  Spanish-speaking employers and employees in the 50 states and other U.S. territories may print the form for their reference, but may only complete the English-language form to meet employment eligibility verification requirements.

Section 2, which requires you to review the employee's identity and work authorization documents by the end of the third business day from the date employment begins.

  • Do not tell employees which verification documents you will accept; employees must be free to show you either a document from List A or a document from List B and a document from List C.  If an employee gives you more documents than are necessary, tell them to choose according to the Lists of Acceptable Documents. Do not choose for them, and do not record information from extraneous documents.

  • Look for overt signs that a document is fraudulent, such as:

— inconsistent typefaces or sizes,

— inconsistent information on the front and back of a document or between documents, or

— photographs that have no resemblance to the employee.

  • Reject documents that do not reasonably appear to be genuine or to relate to the employee, and ask the employee to bring in acceptable documents or receipts for such documents.  If they fail to do so within the three business days, terminate their employment.

Alert: New Puerto Rico birth certificates affect Form I-9 process

On July 1, 2010, the Vital Statistics Office of the Commonwealth of Puerto Rico began issuing new, more secure certified copies of birth certificates to U.S. citizens born in Puerto Rico because of a new Puerto Rico birth certificate law.  This law does not affect the U.S. citizenship status of individuals born in Puerto Rico.  It only affects the validity of certified copies of Puerto Rico birth certificates.

Beginning Oct. 31, 2010, only certified copies of Puerto Rico birth certificates issued on or after July 1, 2010, are acceptable for Form I-9 purposes.  If an employee presents for List C a birth certificate issued by the Vital Statistics Office of the Commonwealth of Puerto Rico, the employer must look at the date the certified copy of the birth certificate was issued to ensure that it is still valid.

Employers must not re-verify the employment eligibility of existing employees who presented a certified copy of a Puerto Rico birth certificate for Form I-9 purposes and whose employment eligibility was verified on Form I-9 prior to Oct. 31, 2010.

Employers awarded a federal contract that contains the Federal Acquisition Regulation (FAR) E-Verify clause have special Form I-9 rules for the verification of existing employees.

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