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The US Company Killer: An Inadequate I-9 Program

If I were to ask you whether you want to hear about “I-9 compliance,” the answer would likely be a confident “no, thank you!” However, what if I were to ask whether you would want to know about an issue that could kill your US company with civil and criminal penalties? Do I have your attention now?

After years of decline under previous administrations, both raids and arrests by US Immigration and Customs Enforcement (ICE) climbed to an all-time high in 2019. This sharp increase in enforcement efforts over the last several years is the result of both direct and indirect guidance from the White House and this trend is likely to continue through 2020.

What is an I-9?

In the US, all employers are required to properly complete the I-9, Employment Eligibility Verification Process (see for all newly hired personnel. This process includes the review of each newly hired employee’s original documents evidencing identity and employment authorization.

For whom must an I-9 be completed?

The I-9 process must be completed for every employee of the US employer, regardless of the employee’s citizenship, nationality, or work authorization. This is true even if an employer assumes or believes that all employees are US citizens. 

When must the I-9 process be completed?

Within three (3) business days of an employee’s start date, the employer and employee must complete the I-9 process. Failure to do so may result in civil penalties as is described in more detail below.

In some instances, including for employee’s who have temporary work authorization, the I-9 may need to be reverified at a later date or dates.  This would include those who indicate that they are “An Alien Authorized to Work” on the first page of the I-9 form. 

What is an I-9 program?

An effective I-9 program is aimed at compliance and mitigation or elimination of any risk for noncompliance. To be effective, an I-9 program must include proper training by legal counsel of company personnel who will complete the I-9 process with employees, regular and systematic internal and external audits, and proper training for filing and retention of I-9 forms.

As requirements for the proper completion, re-verification, storage, and retention of I-9 form are highly technical and can result in several civil and criminal penalties for both substantive and paperwork violations, a proper I-9 compliance program is essential for all US employers.

What are the penalties for noncompliance?

Even if an employer does not hire anyone ineligible for employment in the US, errors in the completion or retention of I-9 forms can result in civil penalties. Those that knowingly employ those without employment authorization, including those that “should have known,” have been increasingly subject to civil and criminal penalties, including potential prison sentences and forfeiture of any and all assets with a reasonable nexus to the employment of persons without authorization.

Generally, civil penalties, including fines, debarment from government contracts, back-pay or forced hiring of individuals who may have been discriminated against, can result from the following violations:

  • Knowingly hiring, or to have knowingly recruited or referred for a fee, an unauthorized alien for employment in the US or to have knowingly continued to employ an unauthorized alien in the US;
  • Failing to comply with Form I-9 employment verification requirements;
  • Committing or participating in document fraud for satisfying a requirement or benefit of the employment verification process or any other immigration law or regulations;
  • Committing document abuse;
  • Unlawful discrimination against an employment-authorized individual in hiring, firing, or recruitment or referral for a fee;
  • Failing to notify DHS of a Final Nonconfirmation (FNC) of an employee’s employment eligibility; and
  • Requiring an individual to post a bond or security or to pay an amount or otherwise to provide financial guarantee or indemnity against any potential liability arising under the employment verification requirements.

Furthermore, criminal penalties are often levied against company owners, directors, and personnel responsible for the I-9 program for engaging in a pattern or practice of hiring, recruiting or referring for a fee unauthorized aliens. Again, this can be based on “constructive knowledge” and failure to complete the I-9 process has been deemed constructive knowledge for which individuals have faced criminal penalties.

In conclusion, as penalties can be applied to employers who have made errors on I-9 forms, regardless of whether there was any actual unlawful employment, it is imperative that US employers ensure their I-9 compliance program is compliant with all I-9 regulations and ready for review by ICE.