This is a special edition of “This & That” Tuesday that is devoted to I-9 documentation and management. I hope you find it to be informative and useful.

Announcements

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Labor Law Update 2013: If you are interested in having me give a “Labor Law Update for 2013” presentation to your organization early next year, please contact me so we can schedule the event.

HR4U 101 for 2013Workshop

My next full day workshop will be held on January 9, 2013. This is a practical workshop that focuses on all the things you need to know to comply with California employment law and some guidance on best practices for all your employee related efforts. Download the flyer for all the workshop details.

I-9 Compliance & Audits
I have done several I-9 audits for companies and sadly I’m finding that what appears to be a fairly straight forward process is generally poorly done. There could be many reasons, lack of understanding, not feeling it is important, too busy, etc. But whatever the reason, not doing your I-9 processing accurately can be very costly. Hopefully this special edition of “This & That” Tuesday will help you going forward.

Immigration and Customs Enforcement (ICE) is responsible for preventing the hiring of undocumented aliens. Recently, the agency has focused on "silent raids" targeting employers who employ these individuals.

A "silent raid" generally comes in the form of an ICE Notice of Inspection (NOI), providing employers a minimum of three days' notice of an I-9 audit. In fiscal years 2010 and 2011, ICE issued over 4,000 NOI's to various companies nationwide. Given ICE's aggressive enforcement approach, employers should carefully review their I-9 documentation policies and procedures, and conduct annual internal audits to ensure compliance.

The ICE I-9 Audit

The purpose of an ICE I-9 audit is to identify employers' "knowingly" employing anyone without proper employment eligibility verification, which can result in criminal and civil penalties. ICE may also cite employers for technical violations in their I-9 paperwork, even if the employer did not employ a single unauthorized worker. ICE can get very picky, for instance, they don’t like to see any “white out” of information or any notes in the margins of the form. They don’t want to see Column B items in Column C, etc.

A finding of document fraud can result in penalties of up to $3,200 per violation. Failure to properly complete, retain, and/or make available for inspection Form I-9 as required by law, can result in civil penalties of up to $1,100 per violation for the first offense. In some instances, individual liability can be assessed against upper management.

During the audit, ICE officials will review original I-9 forms and any attachments and compare them with payroll records and lists of employees to determine if there are any discrepancies or paperwork errors. ICE, in its discretion, may review all forms, or a random sampling. Each violation will result in civil penalties.

Managing I-9 Compliance

Whenever possible, an employer should assign one employee the responsibility of maintaining the I-9 records and conducting a final review of them before they are filed. That employee should receive training on I-9 compliance.

The I-9 form is divided into three separate sections, each of which relates to specific compliance requirements. When ICE audits an employer's files, the purpose is to ensure that all sections of the I-9s are correctly completed for each current employee hired after November 6, 1986, and all former employees going back three years.

The designated employee (your I-9 Administrator) should also verify that I-9 forms are not kept in the employee's regular personnel file but instead kept in two separate binders or files, filed alphabetically. One binder should be for all current employees and the other binder for all terminated employees. Once an employee is terminated their I-9 paperwork should be moved to the “terminated” binder. For authorized alien employees, an employer should establish a tickler system to alert the employer when re-verification must take place. The process of re-verification should be uniformly applied to all employees.

By the way, the Federal Government publishes a comprehensive, free guide (Handbook for Employers) on I-9 administration. I recommend downloading a copy and keeping it handy. It can be found at:     http://www.uscis.gov/files/form/m-274.pdf

Annual Internal Audit

Employers should conduct their own internal audit on an annual basis to verify I-9 compliance. Preparation is everything when it comes to I-9 compliance.  As part of the audit, employers should prepare a list of current employees hired and employees who separated since the last audit was done and ensure there is an I-9 form for each individual. 

The employer should review each I-9 form for proper completion and supporting documents. Any incorrect information should immediately be noted or a new I-9 issued, with the old I-9 attached to it. The employer should then prepare a log with I-9 errors and state what was done to correct each error.

An employer may also wish to retain the services of a third-party experienced in I-9 audits to conduct the internal audit on its behalf.

Discrimination

Employers should be careful to avoid violating anti-discrimination laws. In addition to remedies under federal and state anti-discrimination laws, ICE will also assess civil penalties of up to $3,200 per individual discriminated against in the context of I-9 compliance. For example, ICE may find that an employer discriminated against an employee based on citizenship status or national origin if the employer makes photocopies of verifying documents for some employees but not others. As a result, if an employer makes photocopies of verifying documents, it should make copies across the board, and not selectively. My recommendation is not to make copies of verifying documents but select either method and do it consistently.

Records Retention

You are required to retain your I-9 documentation for three years after the date of hire or one year after the date of termination, whichever is later. I recommend you purge your I-9 documentation as soon as you are legally able to do so. I have created an I-9 Record Retention Calculator that will automatically calculate an employee’s final I-9 record retention date. If you are interested in receiving this calculator just click on the contact link at the top of this newsletter and let me know that you would like me to send you the calculator.

Factoids

• The latest estimate is that you will need about 80% of your pre-retirement earnings to maintain your current lifestyle during retirement and your withdrawal rate should be no more than 4% (inflation adjusted) if you want to have a 90% probability of your nest egg lasting 30 years.
• 70% of households will be able to maintain their pre-retirement standard of living if the delay retirement until 70
• 7% of income needs to be saved by someone who begins saving at 25 and retires at 70
• Only 35% of Americans think it is possible for a middle-income family to save for a secure retirement.

Quote

The best way to remember your wife's birthday is to forget it once.
~ H.V. Prochnow ~