Employer Insights

I-9 Compliance: Employment Eligibility Verification Filing & Retention

Written by Employer Pass | May 19, 2021 1:12:00 PM

Form I-9 is the official federal form used for Employment Eligibility Verification, which last revised and updated on August 1, 2023. This new Form I-9 must be used as of November 1st, 2023 at which time the prior version of Form I-9 is no longer valid for use.

Employment Eligibility Verification is required as a result of the Immigration Reform and Control Act of 1986

The Department of Homeland Security (DHS) uses Form I-9 to verify the identity of new hires and legal authorization to work with the United States Citizenship and Immigration Services (USCIS)

I-9 Filing and Retention

Employment attorneys typically recommend that all employees' I-9s are kept in either an HR software or system, a separate master file, or a 3-ring binder. I-9s are subject to unique record retention laws. Storing all the records together, in one place, will make it easier to keep track of them for as long as needed. 

For ease of organization, remove the employee's I-9 on their termination date and store it in a separate “terminated” file until the appropriate discard date. Keeping a folder of your current employees and a separate one with your terminated employees helps with organization.

What is Form I-9?

First-time employers may find themselves wondering, "what is an I-9?". Form I-9 is a form filled out by an employer, that eventually is submitted to the USCIS. This process is used to determine whether or not a potential new hire is eligible to work in the U.S.

How Long Do You Need to Store or Retain I-9s?

I-9 forms need to be retained for a minimum of three years after the date of hire or one year after separation from employment, whichever occurs last.

Employees who worked for less than two years should have their I-9 kept on file for at least three years after the first day of employment.

Employees who worked for over two years should have their I-9 kept on file for at least one year after the day employment was terminated.

When it comes to I-9 retention for terminated employees, it is important to calculate the amount of time you need to retain each I-9 immediately. 

Who Completes Form I-9?

Either the employer or the employer representative will complete the form. Section 2 must be completed by the individual that reviews the required IDs. If a notary is acting as an employer representative be sure to discuss with them ahead of time as certain notaries can not complete section 2. It is not required to have this form officially notarized. 

When is Form I-9 Not Required? 

"Workers" that do not need to complete an I-9 include:

  • Non-employees such as:
    • Volunteers
    • Unpaid interns
    • Independent contractors
  • Employees that were hired before November 6th, 1986
  • Anyone hired for casual domestic work in a private home on an irregular basis
  • Employed by a contractor providing contract services (such as employee leasing or temporary agencies)
  • Not physically working on U.S. soil
  • Anyone who is self-employed, unless part of a separate business entity such as a corporation or partnership

Acceptable Documents

Most people are not document experts. So, what is acceptable documentation for the purpose of the I-9? You are expected to have documents that appear genuine and relate to the person who is giving them to you. For the purposes of section 2, the employee must present either one document from List "A", or, two documents, one from List "B" and one from List "C". The accepted documents are found on the last page of the I-9. Employers can not specify which document employees use and must present them with the accepted list. 

During the COVID-19 pandemic, the federal government allowed employers to accept expired documents that are considered proof of identity, as it was difficult and otherwise unpractical for some people to renew said documents, such as a driver's license., during COVID. 

However, as of May 1st, 2022 employers are no longer allowed to accept expired documents. Any employers who have accepted expired documents should have updated them with acceptable documents by July 31st, 2022. 

List of Acceptable Documents

The list itself is found on Page 2 of Form I-9 and is broken down into list "A" (where only one document is required) and lists "B" and "C" (where one document from each list is required). 

However, the following guidelines must be followed for accepted documents as well:

  • The document must be unexpired
  • The document must be presented within 3 business days of hire
  • Photocopied documents are not accepted
  • Receipts in lieu of IDs

E-Verify

E-Verify is a free web-based system accessible via the internet that compares information on the I-9 to government records. This helps employers accurately compare information provided on the I-9 against millions of government records including DHS and Social Security Administration records to confirm eligibility. 

E-Verify Requirements

  • Optional for most US employers
  • Required by federal or state law:
    • Federal contractors and subcontractors, if the contractor contains the Federal Acquisition Regulation E-Verify Clause.
    • It is required in Alabama, Arizona, Mississippi, and South Carolina
  • Newly hired employees must provide social security number
  • Any list B document must contain a photograph
  • Certain documentation must be photocopied for E-Verify photo matching

I-9 Penalties for Non-Compliance

By not paying attention to your I-9 responsibilities you may find yourself faced with penalties. Accurate completion is very important for employers, which can be helped through the use of employee onboarding or more holistic HR software.

Employer Penalties

There are civil and criminal penalties for knowingly hiring or continuing to employ an unauthorized alien and failing to comply with I-9 requirements or misusing identity documents. 

There are also unlawful discrimination penalties for engaging in unfair immigration or related employment practices. The financial penalties vary greatly upon the situation and the level of the offense. 

Employers may also be subject to debarment from government contracts, a court order requiring the payment of back pay to the individual discriminated against, or a court order requiring the employer to hire the individual discriminated against for violating the law.

Conducting an Internal I-9 Audit

It can be beneficial to conduct an audit of your organization’s I-9 records. Doing so can be critical for your compliance efforts. The finding from your audit will most likely become part of regulatory or legal proceedings against the employer.

If you find things in your audit and you do not address the problem that you find, the audit can increase your liability. The audit then would serve as evidence against the employer. 

Internal Audit Checklist Steps

  • Organize documents
  • Determine priorities
  • Reach out to each employee without an I-9 or with an incomplete I-9
  • Correction
  • Terminated employees
  • Recording the audit 

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