I-9 Newsletter 2014

This case is a reason all employers regardless of employee size should comply with the Form I-9 requirements and ensure it is filled out properly.

The Ninth Circuit Court of Appeals upheld $172,000 in fines against an employer who failed to correctly complete the Form I-9.3

Compliance with Form I-9 requirements is an essential business practice. As the ruling in this case demonstrates, employers cannot take complying with Form I-9 requirements lightly.

Ketchikan Drywall Services (KDS), a drywall installation service company, employs only four full-time and 20 part-time employees. It also hires numerous additional employees on a project basis. For many years, KDS did not have consistent, trained staff in charge of I-9 compliance.

In 2000, KDS received a warning from the Immigration and Naturalization Service, whose functions are now covered by Immigration and Customs Enforcement (ICE), following an audit of its I-9 Forms. In 2006, KDS hired a new controller who understood I-9 training, but the company was audited again in 2008.

As a result of this second audit, KDS was fined and charged with four separate violations:

1. Failure to provide any I-9 Form at all for 43 employees
2. Failure to provide complete information in Section 1 of the I-9 Form for 65 employees (Section 1 is completed by the employee)
3. Failure to provide complete information in Section 2 of the I-9 Form for 110 employees (Section 2 is completed by the employer)
4. Failure to provide complete information in both Sections 1 and 2 of the form for 53 employees

Partially completing an I-9 Form will not suffice. The form needs to be fully and accurately completed and merely copying documents will not act as a substitute.

The court noted that taking the time to copy the information from the relevant documents to the I-9 Form helps to ensure that employers “actually review the verification documents” to ensure that the employee is legally authorized to work in the United States.

Many of KDS’ I-9 Forms contained numerous errors in Section 1; the portion of the form filled out by the employee.

These errors included:

• Failing to check any box attesting to the employee’s status as an employee eligible to work in the United States
• Checking multiple boxes attesting to conflicting statuses
• Failing to provide alien registration numbers (for lawful permanent residents)

An employee must check a box attesting to the specific category of employment eligibility into which he/she fits. This is a substantive requirement. Attaching a copy of identity and work authorization documents is not an acceptable alternative to fulfilling this requirement.

KDS argued that it was not responsible for errors or omissions of its employee. But federal law, as the Ninth Circuit pointed out, clearly makes employers responsible for reviewing and ensuring that the employee fully and properly completed Section 1.

“Where KDS chose to hire employees who failed to fill out Section 1 completely, it did so at its own peril,” said the court.

KDS was also penalized for using a copy of Section 1 of a previous I-9 Form to create a new form when it rehired the employee. KDS photocopied Section 1 of the previous form and then used an updated Section 2. The Ninth Circuit did not allow this practice.

The employer has two options when rehiring an employee within three years of the date the Form I-9 was originally completed:

1. Complete Section 3 of the employee’s previous I-9 form; or
2. Create a new I-9 Form and ask the employee to complete Section 1 again; the employer must complete Section 2 again.

The employer cannot “proceed by cobbling together elements of the two.” This is because of the requirement that Section 1 be signed by the employee at the specific time in question. A photocopied signature from a previous form does not attest that the employee is currently eligible.

“Where a new I-9 is generated using a photocopied signature, the employee has not attested to anything with respect to that new form,” according to the court.

KDS was also penalized because of errors it made in Section 2 of the I-9 Form; the section that the employer must fill out. Critically, the employer representative failed to sign the I-9 Form. The employer must have a representative sign and date Section 2 attesting under penalty of perjury that:

• The representative examined the original documents;
• The documents appeared to be genuine; and
• To the best of the representative’s knowledge, the employee is authorized to work in the United States.
• What should an employer do? Make sure that any internal staff (HR, payroll and any other employees that may be involved in the process of filling out form) is properly trained on filling out the I-9 form and does so in a timely manner and in accordance with the current DHS regulations.
• How can we help? JR Consulting conducts I-9, HR and Payroll Audits for employers. We can review current practices and procedures as well as all current I-9 documentation for compliance. We then can provide a written report of findings so the employer has a current assessment of their compliance issues (if any) and rectify accordingly.