It’s official! On January 22, 2017, paperwork took a change. For better or worse you ask? Well you decide. The United States Citizenship and Immigration Services (USCIS) has caught up with technology (in some sense) and smart-ified the Form I-9 (the Employment Eligibility Verification form). This new, smart form carries an expiration date of 8/31/2019 and is mandatory for all employers.
Before we jump into the exciting news, let’s back track a bit. The Form I-9 was created to document the verification of the identity and employment authorization of each new employee (both citizen and noncitizen) hired after November 6, 1986, to work in the United States. Employers are not required to print, retain, or store the page containing the Lists of Acceptable Documents, however, employers must ensure that all pages of the instructions and Lists of Acceptable Documents are available, either in print or electronically, to all employees completing the form. Employers must examine the documents provided to determine if the document reasonably appears to be genuine. The examination is to be done when the employee is physically present. Also, if copies of documents are made, it should be done for all employees to avoid violating anti-discrimination laws. Employees must complete their section of the I-9 no later than the first business day of employment for pay and must present documentation that establishes their identity and employment authorization within three business days of starting work for pay (e.g. if work begins Tuesday, documentation must be presented on or before Friday of that same week). However, employees hired to work for less than three business days must present documentation no later than the end of the first day of employment. Employers are responsible for ensuring all parts of the I-9 are properly completed and are subject to penalties under federal law if the form is not completed correctly.
Okay, now for the good stuff! So, what makes this form so smart? The form has been transformed into an interactive PDF (which requires Adobe Reader 8 or higher), but of course, the paper copy is still acceptable. The USCIS has devised this interactive I-9 form with enhanced features to reduce errors and make completing the form easier. Such enhanced features include:
- A drop-down menu for filling in fields and selecting dates
- Prompts to ensure information is entered fully and correctly
- Embedded instructions for completing each field (a clickable question mark)
- A barcode unique to each form (QR code) to identify it for audit purposes
Unfortunately, that is where the smart form ends.
If you thought the form would be the equivalent of technology enhancements today, you were wrong. It is not quite there yet. The form is not entirely electronic and thus still requires handwritten dates and signatures which means print, print, print away. Then, of course, the form needs to be maintained and monitored for re-verification.
So how long do maintain these I-9’s? The Form I-9 is required to be retained for each employee for the length of his/her employment with the employer and for a specified period after employment has ended. Once employment ends, the employer must retain this form and any attachments for either three years after the date of hire (i.e. the first day of work for pay) or 1 year after the date employment ended, whichever is later. Also, make sure you are maintaining COMPLETE documents. Forms that aren’t signed manually (by hand) are also considered incomplete and may subject an employer to fines and penalties associated with retaining incomplete forms in the event of an inspection.
With all this smartness and technology going on, the next logical question would be how these forms can be retained. The good news is that the USCIS is not opposed to electronic maintenance of the forms. According to the USCIS Form I-9 instructions, the Form I-9 may be generated, signed, and retained electronically, so long as it is done in compliance with the Department of Homeland Security (DHS) regulations at 8 CFR 274a.2(e), (f), (g), (h) and (i) as applicable. Once the Form I-9 has been securely stored electronically, the original paper form may be destroyed.
Now, the real question “who cares?” Well for starters, the DHS and U.S. Immigration and Customs Enforcement (ICE). ICE was created in 2003 to enforce federal laws governing border control, customs, trade, and immigration to promote homeland security and public safety. When they come knocking, employers must make forms available within three days of an official request for inspection. If an employer is found to have knowingly hired unauthorized aliens, or is continuing to employ aliens knowing that they are, or have become, unauthorized to work in the United States, the employer may be ordered to cease and desist from such activity and pay a civil money penalty for each offense. In addition, an employer will face civil penalties for each violation where an employer fails to properly complete, retain, and/or make a Form I-9 available for inspection as required by law. In determining the amount of the penalty, DHS considers:
- The size of the business of the employer being charged;
- The good faith of the employer;
- The seriousness of the violation;
- Whether or not the individual was an unauthorized alien; and
- The history of previous violations of the employer.
The range for fines related to I-9 paperwork errors has increased significantly from $110-$1,110 per individual to $216 – $2,156 per individual. This is all to account for inflation of course. The increased amounts took effect for penalties assessed on or after August 1, 2016, for a violation occurring on or after November 2, 2015.
What can you to protect yourself? Well, performing self-audits can help mitigate fines and penalties by allowing employers to catch mistakes early and take corrective action. If, during your self-audits, you discover Form I-9s with mistakes, the employer can either have the existing form corrected (i.e. the incorrect information is crossed out, and the correct information is entered, initialed, and dated) or a new form may be prepared (i.e. both the new and old form are retained along with a short memo stating the reason or the correction). Should you find that I-9 forms are missing for an employee, an I-9 form should be given to the employee immediately, the employee should be allowed three business days to provide acceptable documentation, and the form should NOT be backdated.
So remember, use the new I-9 form to mitigate the chances of having an incomplete form, be sure to obtain manual signatures, retain the I-9 form in a secure location, and perform a self-audit to make sure you are in compliance…no one wants ICE melting at the door.
*Editor’s Note: Visit this link for updated changes
Nicholle Mezier, CPA, MBA
Nicholle is a Manager of Cerini & Associates’ audit staff where she brings experience in audit, review, and consulting services to our general business, nonprofit and special education clients. Nicholle has worked with a large number of nonprofit clients, predominantly focusing on social service providers, healthcare providers, foundations, educational institutions, and arts and culture organizations. Nicholle’s technical knowledge allows her to provide specific services, including financial statement audits, internal and claims audits, and nonprofit outsourced accounting services. Nicholle has also contributed to the firm’s various newsletters.