New Paperless I-9 Law Compliance Made Easier

January 10, 2005

A new law will allow employers to implement a paperless, more efficient and less costly I-9 process.

    Employers will be interested because of high-profile U.S. Immigration and Customs Enforcement raids such as "Operation Rollback," aimed at Wal-Mart. These have reinvigorated employer interest in employment eligibility verification compliance.

    More motivation appeared in the form of President Bush’s 2005 budget proposal, which included an additional $23 million to more than double the number of work-site investigations currently performed by Immigration and Customs Enforcement.

    Given the increased potential for work-site investigations, employers want to maintain flawless records so as to avoid potential penalties.

    At the same time, those charged with administration of I-9 forms, usually human resources professionals, are faced with a multitude of paperwork to complete and maintain for each employee. The struggle to balance compliance with efficiency is ever present.

The penalties
    All workers must complete an I-9 form on the first day of work and must show documentation verifying eligibility to work in the United States, such as a valid passport, Social Security card or unexpired employment authorization card, within the first three days of work.

    If Immigration and Customs Enforcement identifies any violations during an audit, it may impose fines. For paperwork violations, which include an error on the I-9 or no I-9 at all, the employer may be fined $110 to $1,100 for each individual.

    For a violation of the knowing employment of unauthorized worker provisions, Immigration and Customs Enforcement may assess one of three tiers of fines. Initially, the employer could face a $250 to $2,000 fine for each unauthorized individual. The employer risks $2,000 to $5,000 or $3,000 to $5,000 for second and third violations, respectively.

    Criminal penalties also are possible where there is a finding of a pattern or practice of violating the prohibition against knowingly hiring unauthorized workers. Penalties can be up to $3,000 for each unauthorized worker, imprisonment for up to six months, or both.

The challenges
    Completion of the current version of Form I-9 can be challenging and often results in unintentional errors. Even where there is no "knowing hire" of an undocumented worker, Immigration and Customs Enforcement can still review I-9s and penalize the employer for mistakes made in completing the I-9 for authorized workers.

    Much of the administrative confusion is caused by the fact that the I-9 form has not been amended to reflect the many changes to employment authorization documents and immigration laws. Other leading causes of I-9 errors include time constraints on the human resources professionals charged with administering the verification and the lack of or inadequate training of the administrators.

The new law
    On October 30, President Bush signed a new law allowing for electronic completion and storage of I-9 employment verification forms. The change will automatically go into effect April 28 if the Department of Homeland Security fails to issue regulations before then.

    While employers are still required to personally verify the employment-eligibility documents of new employees, an electronic signature may be used by both the employee and the employer’s representative on an automated I-9 form. Currently the form I-9 can only be retained in paper form or on microfilm or microfiche.

    The new law allows employers to store I-9 forms electronically in PDF or other formats. Employers will be able to convert existing paper I-9 forms into electronic formats if they wish. Under the law, the electronic I-9 records and their related electronic signatures are to be given full legal effect, validity and enforceability just as if they were written signatures.

Benefits of new law
    Storage advantages: Electronic document storage will alleviate the challenge of maintaining sufficient storage space to accommodate hard copies of I-9 forms that must be retained in some cases for many years. Additionally, electronic storage enables an employer to easily maintain a single I-9 storage system for its entire operation.

    Employers with multiple work sites will no longer face the problem of locating and transferring individual forms each time an employee moves from one facility to another. Moreover, with centralized electronic storage of I-9s, the main office designee can periodically review the I-9 compliance practices of remote offices to ensure uniformity.

    Efficiency improvements: The use of an automated form will significantly enhance productivity at companies with tens of thousands of employees, especially where turnover is high. With I-9 form processing time reduced, human resources managers and staff can focus on other important employee issues. Electronic completion will speed up the reverification process in terms of identifying those employees who must undergo reverification on or before a certain date and the actual execution of Section 3 on the I-9 form.

    Finally, in the event of an Immigration and Customs Enforcement audit, the employer could transmit the I-9 forms electronically for review, as opposed to using staff time to photocopy and mail numerous documents.

    Security considerations: Unlike paper I-9 records, access to electronically stored records can be restricted effectively to authorized personnel through the use of passwords and access codes, in addition to physical security measures, such as locks. Paper I-9 forms can also be lost, misplaced, misfiled or physically damaged. This likelihood increases over time as papers are removed from and returned to files. Paper documents are subject to total loss in the event of fire or natural disaster. Electronic storage and the routine "backing up" of these documents will prevent such loss.

    While the new law by no means requires employers to implement electronic storage and completion, it does provide that opportunity for those seeking a truly paperless office. Many employers are moving toward electronic filing of all employment forms. The new law allows these employers to fully integrate I-9 forms into these processes and, in doing so, to capture the many advantages of this technological opportunity.

This article is not intended as legal advice, nor should it be relied upon as such. For legal advice in a given factual situation, the reader is cautioned to retain the services of a competent professional in the immigration law field.