Not completing I-9 forms costs one company over $600,000

Making mistakes on I-9 forms can be very expensive.
Making mistakes on I-9 forms can be very expensive.

When working with smaller companies I often find a good number of them do a very poor job of complying with the paperwork requirement of Immigration Reform and Control Act (IRCA) of 1986. This is the law that requires every employer to insure that the employee they hire has the legal right to work in the United States. It requires that a form called the I-9 be completed by both the employee and the employer. Seems simple enough. Unfortunately, one company screwed it up 808 times and they are now paying $605,250 in fines.

Mistakes

The mistakes the company Hartmann Studios, Inc. made include:

  • Not insuring the employees had completed Section 1
  • Not insuring the employees had completed Section 1 on the first day of employment
  • Not completing the employer’s section of the form by the end of the third day of employment
  • Not requiring proper documentation
  • Not having an employer representative sign the form (this was the most frequent violation)
  • Not being able to locate a form for listed employees

The end result of these mistakes was a fine of $700 per form plus other assorted penalties.
As a result of poor organization and lazy procedures Hartmann Studios  is having to pay out $605,250 plus all the legal fees associated with defending themselves over a very long court case.

How to save your company money

The first step to saving your company money is to take the I-9 process seriously. Follow these steps:

  1. Have the employee complete Section 1 on their first day of employment
  2. Make sure they sign the document in the correct place. Don’t accept the form without checking it over.
  3. Have them present documentation that shows they have the legal right to work in the US.
  4. Record that documentation in the appropriate section on the I-9. The use of the E-verify does not eliminate the need for the form I-9.
  5. Make sure the form is signed by the person who saw the actual document, not a photo copy. In case you have not read the form, it is an act of Perjury to sign the form attesting to the fact you saw the form when you did not. Perjury = jail.
  6. File all current I-9s in a notebook where they can be easily retrieved. Putting them in the employee’s file make them difficult to retrieve.
  7. Do not retain I-9s beyond the required time. You can be liable for mistakes on old forms of past employees if you still have the form in your paperwork.

If you are a small company you may accumulate a good number of I-9 forms over the course of the years. Even if you only have 20 incorrect forms do you want to have to pay $14,000 or more in fines?
So take this seriously.

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