Dotting the “I” on Your I-9 Compliance

 
 

Human resources are a time-consuming part of the life of every business owner, especially a restaurateur. In addition to attracting, training, and retaining the best talent possible, you must keep a mountain of paperwork. One of these items, the I-9s for your employees, has recently been coming under additional scrutiny by the US Department of Labor. Below we will discuss what this compliance entails and some best practices to help you stay compliant.

Employment Eligibility Verification

Form I-9 establishes the eligibility of your employees to work in the United States. The form first came into existence in 1986 as a part of the Immigration Reform and Control Act. Under the act, all employers must verify the identity and employment eligibility of an employee from a specific list of acceptable sources. These sources include a driver’s license, social security card, visa, passport, and several others. The law does not require the employer to catch fake versions of these documents, but you want to use your best critical judgement when reviewing the documents in case anything seems suspicious.

Opinions vary regarding keeping copies of the source documents. Generally, the law does not require the employer to keep a copy of the documents reviewed. Only the completed and certified I-9 must be retained by the employer. If you do decide to keep a copy of the documents, be sure they are stored in the same file as the related I-9. Also, if you make copies for one employee’s documents, you must make copies of all employee documents.

Every new employee must complete an I-9. The form must be completed no later than the third day of employment of that employee. If the employee works for three or less days, the form must be completed on the very first day. The I-9s can only be completed in blue or black ink. Any other media (for example pencil) is strictly not allowed.

Procedures for Confirming I-9 Eligibility

Be cautious – you are not allowed to pre-screen an applicant by making a direct inquiry related to his or her citizenship or immigration status such as, “Are you a citizen of the United States”. Additionally, employers are not allowed to ask for copies of the acceptable documents before an offer of employment has been made and accepted by the applicant. If you want to include a question on an application or in an interview setting, it needs to be worded as follows: “If hired, can you show proof of identity and legal authorization to work in the United States?”.

The completed I-9s need to be retained by the employer for either three years or one year after the date of termination – whichever is later. Said another way, all your current employees must have a completed I-9 on file. For any employee that has left or been terminated, look carefully at the rule to find when you can destroy the I-9. It is important to keep your I-9 documentation separate from the rest of your employee files. If the I-9s are included with other employee files, any Department of Labor agent can take and examine the file even if it is unrelated to the I-9 examination. Be sure to keep the active employees and the terminated/transitioned employees in two separate files.

I-9 compliance carries a great deal of work, but, if the work is not taken care of, it can result in high penalties. Under audit, each individual error located on a form incurs an individual penalty. These penalties can add up quickly to an enormous sum of money.

If you need help with your I-9 compliance, never fear. We will be able to help examine your processes and quickly spot check your forms to advise you on the potential penalties that you might be exposed to. Don’t get caught with your I-9 compliance out of order. Reach out to your ATKG accounting professional and we will be glad to help put your mind at ease.


Brandon Howard is Manager in the firm’s tax practice. He received his Bachelor of Music Education and a Master of Accountancy from the University of Texas at San Antonio (UTSA). Brandon is a Certified Public Accountant and also serves as an adjunct instructor at UTSA for the Department of Accounting. He can be reached at 210.733.6611 or bhoward@atkgcpa.com. 
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