As an employer, one of the most important compliance pieces refers to Form I-9. Form I-9 is a document used by the United States Citizenship and Immigration Services (USCIS), which is part of the Department of Homeland Security, to verify the identity and work eligibility of employees. The purpose of Form I-9 is to ensure that individuals hired for employment in the United States are authorized to work, and employers and employees have specific sections they need to complete.
Employers are required to complete Section 2 of the form, which requires the examination of the employee’s original documents that establish their identity and work eligibility. From there, the employer verifies whether these documents are genuine and then must retain Form I-9 and supporting documents for either three years after the date of hire or one year after the date of employment termination, whichever is later.
Due to Form I-9’s importance, the federal government imposes penalties for noncompliance should an employer fail to follow guidelines or meet deadlines. In this guide, we’ll walk through I-9 compliance penalties, so employers can know what to expect should they fail to follow the correct I-9 procedures.
Penalties for I-9 Noncompliance
If an employer fails to comply with I-9 regulations, the U.S. Immigration and Customs Enforcement (ICE) can impose I-9 compliance penalties. ICE has the authority to conduct audits and investigations to ensure employers comply with the law. The severity of I-9 compliance penalties can range from fines to imprisonment. Additionally, the level of fines is dependent on various factors, such as the employer’s size, good faith and the seriousness of the violation.
First Offense
As stated, I-9 compliance penalties can vary depending on the nature of the offense and whether it’s a first or subsequent offense. Below are guidelines employers can expect if it’s their first offense regarding I-9 compliance:
- Technical or unintentional violations: For first-time technical or unintentional violations in good faith are subject to fines ranging from $272 to $2,701.
- Knowingly hiring, recruiting, referring or retaining unauthorized aliens: The first-time offense for employers knowingly hiring, recruiting, referring or retaining unauthorized aliens can range from $676 to $5,404.
First-time offenses can be minimal but can add up in their amount depending on the severity of the offense. Ensuring you’re compliant can help you avoid expensive I-9 compliance penalties that can hurt your bottom line and reputation.
Subsequent Offenses
Employers who commit subsequent I-9 offenses can be subject to harsher I-9 compliance penalties. Subsequent penalties are generally higher, and for subsequent paperwork offenses, such as technical or unintentional violations, increase to a range of $1,251 and $2,502. For subsequent offenses related to employers knowingly hiring, recruiting, referring or retaining unauthorized aliens go as follows:
- Second offense: The second offense for employers who knowingly hire, recruit, refer or retain unauthorized aliens can range between $5,404 and $13,508.
- Third offense: The third offense for employers who knowingly hire, recruit, refer or retain unauthorized aliens can range between $8,106 and $27,018.
Subsequent offenses related to I-9 compliance can be substantially higher, upwards of tens of thousands of dollars for repeat violations.
Types of I-9 Penalties
When it comes to I-9 compliance penalties, there are two categories to understand: civil penalties and criminal penalties. While both forms of penalties can be damaging to your business, the latter can result in more severe consequences, such as expensive fines and even debarment. Let’s explore the two types of I-9 compliance penalties below.
Civil Penalties
Civil penalties are issued to employers who fail to properly complete, retain or make I-9 forms available for inspection during the event of an audit. These penalties are often handed out when technical errors are made, such as incomplete I-9 forms or failing to provide certain information. The cost of these penalties varies depending on whether the offense is a repeat violation, the size of the company and more. Examples of civil violations include:
- Knowingly hiring, recruiting or referring an authorized noncitizen for employment in the U.S. or knowingly employing an unauthorized noncitizen in the U.S.
- Failing to abide by Form I-9 employment verification requirements
- Committing document fraud to satisfy a component of the employment verification process
- Committing document abuse
- Unlawfully discriminating against an employment-authorized individual when recruiting, hiring, firing or referring for a fee
- Failing to notify the DHS of a Final Nonconfirmation (FNC) of an employee’s employment eligibility
- Requiring an individual to submit a security, bond, collateral, payment or other form of financial assurance or protection to cover any potential liabilities that may arise during the employment verification process
Criminal Penalties
In addition to civil penalties, employers may receive criminal penalties for more severe violations of the employment verification requirements. Criminal penalties are often issued when employers engage in willful violation of the law, such as repeating patterns of knowingly hiring unauthorized individuals. These penalties can take the form of fines, imprisonment or debarment, which prevents the employer from participating in future federal contracts and receiving certain benefits, such as federal loans and grants.
Importance of Staying Compliant
There are several reasons why it’s important to stay I-9 compliant as an employer. As we’ve discussed, one of the top reasons to remain compliant is to avoid I-9 compliance penalties. These penalties can range from a few hundred to thousands of dollars, which can significantly hurt your bottom line. Additionally, depending on the severity of the violation, employers can potentially face imprisonment or debarment.
In addition to penalties, compliance is important in protecting the reputation and interests of your business. Noncompliance can lead to negative publicity, reduced customer trust and damage your brand’s image. Lastly, maintaining compliance can ensure you’re following fair employment practices, which can help you prevent discrimination and increase employee satisfaction.
How to Avoid I-9 Noncompliance
Noncompliance can be costly and damaging, so finding ways to avoid I-9 noncompliance is crucial. Partnering with an I-9 management solution like Experian Employer Services can help you stay ahead of missing data and potential issues and ensure you’re complying with federal regulations while maintaining high-level security. At Experian Employer Services, our workforce management solutions can help various areas of workforce management, such as tax withholding and understanding tax withholding for remote employees. By understanding the elements of multi-state tax withholding compliance, I-9 administration, ACA reporting and more, you can ensure your organization abides by all federal regulations.