What Employers Need to Know about I-

9’s

ICE penalties from worksite enforcement

inspections increased to $5,300,000 in FY 2010,

up from $1,033,291 in FY 2009, with average

fines exceeding $110,000

ICE criminally charged a record-breaking 180

owners, employers, managers and/or

supervisors in FY 2010, up from 135 in FY 2008

and 114 in FY 2009.

ICE conducted more than 2,200 I-9 audits in FY

2010, up from more than 1,400 in FY 2009.

ICE debarred 97 business and 49 individuals in

FY 2010, up from 30 and 53, respectively, in FY

2009.

US Immigration and Customs Enforcement

announced earlier this year that it has notified about

1,000 companies throughout the country that it will

be auditing them to ensure they are not employing

undocumented workers. The audits include

employers in every industry across all 50 states.

Hiring an unauthorized worker can result in fines

up to $5,500.

Improperly filed I-9 forms that are missing

information can lead to fines up to $1,100 (even

if the employee in question is legally authorized

to work in the United States).

Knowingly committing or participating in

document fraud can lead to fines up to $3,200

per document for the first offense and up to

$6,500 per document for subsequent offenses.

On July 22, 2010, the Department of Homeland

Security (DHS) published a final rule amending the

June 2006 interim regulations relating to I-9 forms.

The final rule clarifies that the employer has 3 days

from the first day of work for pay but not including

the actual date of hire to complete Section 2 of the

Form I-9; or, Thursday if the employee begins work

on Monday. Most employers need not count

weekends or federal holidays when determining its

Form I-9 completion deadlines. Retailers and other

similarly situated employers may still be held

responsible for weekends and holidays if those days

are ordinarily “days on which the employer conducts

business” pursuant to 1997 INS guidance.

USCIS now requires additional information to be

recorded such as the DS-2019 and I-20 numbers.

Employers with F, J & M employees clearly have

additional work to do and more training to provide

to HR staff.

For an H-1B employee’s Form I-94/I-94A issued for

employment with a previous employer, the employer

should retain the following documents with the

employee’s existing Form I-9 to prove filing for an

extension of stay on the employee’s behalf:

A copy of the new Form I-129

Proof of payment for filing a new Form I-129;

and

Evidence that you mailed the new Form I-129 to

USCIS

Further, employers are not required to update Form

I-9 when an employee changes his or her name, but

they may nevertheless do so in Section 3. Employers

may accept a document with a different name than

what was entered in Section 1 (e.g., due to married

name, compound name, or misspelling) as long as

the employer is satisfied that the document(s)

reasonably appear to be genuine and relate to the

employee.

When the employment is time limited, as in the case

of aliens authorized to work for a specific period of

time, the date of expiration must be noted and the

I-9 revisited prior to that time so that it can be

updated and the individual’s status re-verified in

Section 3. Failure to do so can be financially costly

to the employer who is audited by ICE and found to

have unauthorized individuals on payroll.

The final rule clarifies the audit trail requirements

such that an electronic Form I-9 system need not

show every time a Form I-9 is viewed or accessed,

but it must track any:

Creation,

Completion,

Alteration,

Update, or

Other modification

of a Form I-9 by recording:

Date of access,

Identity of the individual taking the action, and

Particular action taken.

If an electronic Form I-9 storage method is utilized,

it must contain an indexing system that is

comparable to a reasonable hardcopy filing system.

Lastly, DHS addressed the requirement that

electronic Form I-9 systems be capable of printing a

transaction record that must be given to the

employee at the time of Form I-9 completion. DHS

did modify the regulation in part, however, by only

requiring that a receipt be provided when an

employee requests it. The receipt only needs to be

issued within a reasonable time, and it may be

transmitted via e-mail rather than printed.

In Summary

It is obviously a wise choice to pay meticulous

attention to any new rules put forth by the DHS.

Noncompliance can clearly result in a heavy financial

burden—and no employer wants to face possible

criminal prosecution. It is always in an employer’s

best interest to diligently follow the DHS rules for I-9

compliance and to be fully informed about new

updates and amendments to existing regulations.

Disclaimer: This article is not meant as specific

advice regarding a person’s individual case. An

attorney should be consulted. This article does not

create an Attorney-Client relationship. Any tax

information or written tax advice contained herein

(including any attachments) is not intended to be

and cannot be used by any taxpayer for the purpose

of avoiding tax penalties that may be imposed on

the taxpayer. (The foregoing legend has been

affixed pursuant to U.S. Treasury Regulations

governing tax practice.)