How Your Company Can Survive an I-9 Audit

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How Your Company Can Survive an I-9 Audit

• Carl Shusterman
• PIHRA Legal Update
• June 21, 2012

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I-9 Requirements for Employers - Procedure (Part
I)

• Employers are required to Complete Form I-9 for
  ALL new hires
• Day 1 - Employee must complete top portion of
  form
• I am a (1) Citizen or National of the U.S.
• (2) Lawful Permanent Resident - A
• (3) Alien Authorized to Work Until

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I-9 Requirements for Employers - Procedure (Part
2)

• By Day Three, Employers Must Verify the Workers
  ID and Employment Authorization
• Worker must present one List A Document (ID and
  Employment Authorization) 
• or
• One List B Document (Establishes Identity)
• and 
• One List C Document (Establishes Employment
  Authorization)

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I-9 Requirement for Employers Procedure (Part 3)

• Updating and Re-verification
• Re-verify Employment Authorization for Current
  Employees
• Re-verify or Update Employment Authorization for
  Re-hired Employees
• Expired Documents

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I-9s Photocopying Retention

• Retention Paper, Microfilm, Electronic
• For 3 years after hire, or
• For 1 year after termination, whichever is later.
• Mergers Acquisitions
• Copy Employee Documents?

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I-9 Inspections

• By DHS, OSC and DOL
• Written Notice of Inspection
• 72 Hours Notice
• Potential Civil and Criminal Penalties
• Advisability of Internal Audits

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I-9 Civil Sanctions

• Paperwork Violations Up to 1,100 per employee
• 1,000,000 fine for Abercrombie Fitch in 2010
• Knowing Violations
• 1st Offense 375 3,200 each employee
• 2nd Offense 3,200 - 6,500 each employee
• 3rd Offense 4,300 11,000 each employee
• Wal-Marts 11,000,000 fine in 2005 allowed
  company to escape criminal penalties

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I-9 Criminal Penalties

• Pattern or Practice Violations
• Up to 3,000 per employee
• Up to 6 months imprisonment
• Golden State Fence Co., a California employer,
  paid 4.7 million to ICE in plea bargain in 2007.
  U.S. Attorney sought prison terms, but Judge
  granted the executives probation.

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Immigration Anti-Discrimination Laws

• Discrimination based on Citizenship Status
• Discrimination based on National Origin
• Fines for Violations
• 375 16,000 per employee
• 257,000 Fine for Immigration Discrimination
  California Healthcare Employer in 2010

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I-9 Document Abuse

• Employer cannot specify which List A, B or C
  documents that it wishes to see
• Fines 110 - 1,100 per individual
• Employers should
• Let Employee choose what documents to present
• Not require extra documents
• Not reject documents which appear genuine

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No-Match Letters

• Constructive Knowledge?
• Give Employee Opportunity to Correct
• Social Security Number Verification Service
  (SSNVS) [phone]
• http//www.socialsecurity.gov/employer/noMatchNoti
  ces.htm (Court Injunction against proposed
  government regulations)

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E-Verify Program A Solution for Employers?

• Insulation from Liability?
• Identity Theft?
• Is E-Verify Ready for Prime Time?

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Remote Hiring

• Employer can assign a 3rd party representative or
  notary public to verify the documents
• Employer continues to be liable
• No verification by e-mail or photocopy. Original
  documents need to be verified.

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J-1 / F-1 Visa Holders

• USCIS does not issue EAD
• The documents for I-9 purposes include
  combination of the following under List A
• Unexpired foreign passport number
• 11-digit Form I-94/I-94A number and expiration
  date, and
• J-1 Form DS-2019 number and expiration date of
  employment authorization listed on the form
• F-1 Form I-20 with the designated school
  officials endorsement for employment on page 3
• Important Ensure that they enter their admission
  number from Form I-94/ I-94A in Section 1

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F-1 Students Working on OPT

• Normally can only work until the expiry date on
  EAD
• Exception- If H-1B petition is filed on their
  behalf, then can continue to work until October
  1.

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F-1 on expired OPT with H-1B filed

• Documents under List A
• OPT EAD (Expired) along with Form-I-20 which
  shows that the cap-gap extension was endorsed by
  the students designated school official,
• Valid till Sept. 30 or until the date the
  petition is withdrawn or denied.
• Important You must re-verify employment
  authorization when the Form I-20 cap-gap
  endorsement expires- no later than October 1.

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H-1B Extensions

• Employee authorized to work while timely filed
  extension petition is pending for 240 days, or
  until the petition is denied.
• For I-9 purposes-
• Write 240-Day Ext. and record the date you
  submitted Form I-129 to USCIS in the margin of
  Form I-9 next to Section 2.

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I-9s for H-1B Extensions, cont.

• Retain the following documents
• A copy of the new Form I-129
• Proof of payment for filing a new Form I-129
• Evidence that you mailed the new Form I-129 to
  USCIS.
• Receipt of the H1- B filing
• Re-verify employment authorization in Section 3
  once you receive a decision on the H-1B petition

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AC-21 Portability

• An H-1B employee can start working for you as
  soon as you file the Form I-129 petition for
  Change of Employer
• For I-9 purposes
• H-1B employees Form I-94/I-94A issued for
  employment with the previous employer, along with
  his or her foreign passport
• Write AC-21 and record the date you submitted
  Form I-129 in the margin of Form I-9 next to
  Section 2.

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How to Minimize Your Liability

• Have An Outside Party Audit Your I-9s
• After the Audit, Correct Flawed I-9s
• Do Not Destroy Defective I-9s
• How to Properly Correct I-9s
• Training Sessions for Persons Completing I-9s
• Consult USCIS Employers Handbook

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How to Obtain Additional Information and Stay
Updated

• Immigration Laws, Regulations Procedures are
  constantly changing
• USCIS new I-9 Central website
• USCIS Handbook for Employers (June 2011)
• Our website www.shusterman.com
• Free, monthly e-mail newsletter Over 60,000
  subscribers

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