I-9 Compliance: How to Avoid Costly Mistakes
I-9 Compliance: How to Avoid Costly Mistakes

I-9 Compliance: How to Avoid Costly Mistakes

To say that I-9 compliance is complex is an understatement. The proper steps organizations must follow to ensure accurate completion and retention can be daunting. In this article, Paycor offers best practices and details the steps organizations need to take to prevent penalties and fines using our Onboarding solution.

Form I-9 – What is it?

Form I-9 is used to verify the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of an I-9 for each individual that they hire.

Proper Filing For a two-page form, the I-9 can be one of the most intimidating documents for employers because of the strict guidelines that must be followed to complete it correctly. The law requires that the employer make the forms available upon request by authorized government offices after being provided 3 days’ notice prior to an inspection.

Proper Retention Form I-9 should be retained for as long as the employee is working for you, and for 3 years after the date of hire, or 1 year after termination, whichever date is later.

To calculate how long to keep an employee’s Form I-9, enter the following:

• Employee’s Start Date + three years = date A • Employee’s Termination Date + one year = date B • Store their form I-9 until the later of the two dates

Who Completes Form I-9?

Section 1 – Employee Section In this section, the employee enters their full, legal name, including any other names used such as maiden names, followed by their home address and date of birth. One common mistake that Monica often encounters is employees who accidentally enter their date of birth for today’s date on the signature line. Pay close attention to this detail as your new hires complete their information.

Section 2, Part 1 - Employer Section This section must be completed by the employer or an employer representative (someone acting on the employer’s behalf). If an employer representative does complete the form, the employer is still liable for any violations in connection with the form or verification process. Possibly the most important part of Form I-9 is that this section must be completed within 3 business days of the employee’s first day of employment.

It’s also important to note is that the same person who reviews and validates employee IDs must fully complete the employer’s section. For instance, it is not permissible for a manager to review a new hire’s IDs while HR completes the employer’s section.

Section 2, Part II – Certification The dates in this section are very important, so pay close attention to them. First is: “The employee’s first day of employment” which is the date of hire, or the exact date that an employee began employment for wages. This date must match the payroll and timekeeping records. The second date is simply the date that you examined the IDs your employee presented and completed the employer’s section. This date must be within 3 business days of the date employment.

When is Form I-9 Not Required? Volunteers, unpaid interns and independent contractors do not need to complete the form.

I-9 Employer Penalties Failure to properly complete, retain and/or make an I-9 available for inspection may result in a civil penalty in an amount between $216 and $2,216 for each violation.

Hot off the Press: Form I-9 Updates Released

On Tuesday, November 14, the United States Citizenship and Immigration Services (USCIS) published a revised version of the Form I-9.

The USCIS has revised Form I-9 in order to make employers’ lives easier. In fact, “changes are designed to reduce errors and enhance form completion using a computer”. While this may make it easier to complete a singular Form I-9, this process represents another compliance change for employers.

What: A revised Form I-9 with slightly adjusted fields and drop downs. Users can now add multiple preparers and translators, and may also utilize a new area specifically for additional employee information. Section 1 of the Form I-9 also adjusted some language, such as requiring “Other Last Names Used” vs “Other Names Used”. • When: While the USCIS recommends immediately utilizing the revised form, organizations are not required to use the revised Form I-9 until January 22, 2017. • Who: All employers.

What Should You Do?

Maintaining eligibility guidelines, including strict I-9 compliance, is essential for employers to prevent crippling liability. The best way to avoid any errors is to electronically require your employees to complete the Form I-9 before their first day at work. Paycor’s Onboarding solution will not only include an updated Form I-9, but will also allow you to have employees electronically complete the document. The Form I-9 will then be electronically stored to their record, ensuring simple and easy maintenance for you.

To make sure you are following the proper procedures when hiring a new employee, download Paycor's Form I-9 Guide and Checklist.

This content is for educational purposes only and is not intended to serve as legal advice.


subscribe to Paycor's Resource Center

Subscribe to Our Resource Center Digest

Enter your email below to receive a weekly recap of the latest articles from Paycor's Resource Center.

Check your inbox for an email confirming your subscription. Enjoy!

More to Discover

How to Avoid Payroll Tax Penalties in 2019

How to Avoid Payroll Tax Penalties in 2019

Employment laws are getting more complex and businesses are finding it harder to remain compliant. According to the IRS, 40% of small and medium-sized businesses are fined each year for failing to meet payroll tax regulations. These organizations are at risk because they tend to run payroll through manual processes and disconnected software, leading to miscalculations, incorrect filings and late withholdings deposits. If you’re a business leader and want to avoid fines and penalties, here’s what you need to know. What Payroll Taxes Are You Required to Pay? State and federal taxes include: Federal unemployment taxes: Employers must pay this tax based on the gross pay of all employees. These taxes can either be paid quarterly or annually...

Is Your Time and Attendance Solution Delivering Results?

Is Your Time and Attendance Solution Delivering Results?

Not all time and attendance solutions are created equal. Perhaps you’re manually keeping track of time cards or your automated time and attendance system isn’t living up to your expectations. Either way, it might be time to make a change. Modern time and attendance software should deliver results—mainly savings and accuracy—for any human resources department. Accurate Time Tracking Leads To Labor Cost Savings In any organization, employees usually are both the largest expense and the largest asset. Maintaining control of labor costs is critical to the overall bottom line and it all starts with accurate time tracking. According to the American Payroll Association (APA), organizations can experience anywhere between a 1% and 7% clerical...

2019 Compliance Changes

2019 Compliance Changes

It’s critical that you’re aware of all the tax changes that could affect your organization in 2019. This session will include frequently asked questions, an overview of federal and state withholding updates and trends we are seeing in areas of Tax and ACA compliance. Speakers: Arlene Baker and James Schwantes Arlene Baker is a Senior Compliance Analyst with over 40 years of payroll and tax experience. She’s a member of the National Payroll Reporting Consortium focusing on IRS compliance, and she’s been a member of the national and local APA for 25 years. In 2003, Arlene was awarded the Ohio Payroll Professional of the Year award. James Schwantes is a Compliance Analyst with a legal and tax background. Prior to working at Paycor in the...

Proposed Department of Labor Rule to Update Regular Rate Requirements

Proposed Department of Labor Rule to Update Regular Rate Requirements

In late March, the Department of Labor (DOL) announced a proposed rule to clarify and update the regulations governing the regular rate requirements under the Fair Labor Standards Act (FLSA). Unless exempt, an employee’s regular rate of pay is used to determine how much he or she should be paid for working overtime. The FLSA generally requires overtime pay of at least 1.5 times the regular rate for hours worked past 40 hours per week. The proposed rule details what forms of payment employers can exclude when determining an employee’s regular rate of pay. The cost of the following items would no longer apply: Tuition programs Discretionary bonuses Payment for unused paid leave Wellness programs, fitness classes, gym access, onsite...