How to Avoid I-9 Penalties and Problems

An I-9 form may appear to be a simple one-page piece of hiring paperwork. However, the one page I-9 form comes with enough rules and regulations to get employers into hot water.  There are many common mistakes and human errors that can be made while completing and maintaining I-9 records. To avoid the potentially high costs of an I-9 violation, employers should keep these six common I-9 processing errors in mind:

1. Incorrect or Missing Forms:  Common I-9 documentation mistakes include incorrect dates, missing signatures, and incorrect identifying documents.  It is also possible for an employer to fail to complete an I-9 form altogether or misplace a completed form during filing.

2. Failure to Follow the Three-Day Rule:  I-9 forms must be completed within three business days of the employee’s first day of work. This means that the employee must complete section one of the form, provide identification documents and have those documents verified by the employer, all within three business days.

3. Failure to Re-verify:   For employees of certain citizenship statuses, employers will need to track and update the employee’s supporting I-9 documentation. This supporting documentation includes an expiration date and it is the employer’s responsibility to monitor that date and request new documentation prior to expiration.

4. Improper Identifying Documents:   In the flutter of activity during hiring, it can be difficult for hiring managers to check that all necessary documents are presented and valid. If an employer fails to obtain the right combination of identifying documents from lists A or lists B and C, then the I-9 documentation will be considered incomplete and the employer becomes subject to fines.

5. Improper Document Maintenance:  Federal regulations require employers to maintain I-9 forms either one year after the date of termination, or three years after the date of hire, whichever is greater. If an employer fails to destroy I-9 forms within the outlined time frame, then that employer will be subject to fines.

6. Lack of Supporting Documentation for E-verify Photo Matching:  In 2010, E-Verify introduced photo matching as a way to prevent employees from using false identifying documents. For passports, passport cards, permanent resident cards and employee authorization cards the E-verify system will require employers to compare the document photo with an onscreen photo as an additional security measure.

PRACTICE TIP:  In order to assist with your I-9 compliance responsibilities and avoid potentially hefty fines, employers should consider these six common I-9 documentation mistakes. Even with a good system of checks and balances in place, it is still possible for hiring managers to make these common errors.

I'm starting a business ... What kind of entity should I choose?

When beginning a business, you must decide what form of business entity to establish. Your form of business determines not only which income tax return form you have to file, but also how the company is managed, how personal liability may be sheltered, and the ease of operation. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Legal and tax considerations enter into selecting a business structure.

PRACTICE TIP:  Consult an attorney and an accountant as to what structure is the best for your business with regard to tax treatment, ease of operation, and liability.

Does your application ask about an applicant's criminal background? If you're in Illinois, it shouldn't.

Illinois' “Ban The Box” Law:  The Job Opportunities for Qualified Applicants Act, which took effect January 1, 2015, prohibits private employers with 15 or more employees, as well as all employment agencies, from asking about, requiring disclosure of, or considering an applicant’s criminal history, until the employer/employment agency has decided that the applicant is qualified for the job and has notified the applicant of his or her selection for an interview or – if there is no interview – until a conditional job offer has been made.  There are some exceptions for safety sensitive positions.

PRACTICE TIP:  Make sure your employment applications no longer have ANY questions related to criminal records.  Background checks may still be done, but not at the application stage.

Pregnancy & the Workplace - Illinois Human Rights Act

Do you have 15 or more employees?  If so ...

The new amendment to the Illinois Human Rights Act requires all employers in Illinois to post in a conspicuous location on the premises of the employer, where notices to employees are customarily posted, a notice prepared by the Department and to include in any employee handbook information regarding an employee's rights under this amendment to the Illinois Human Rights Act regarding pregnancy in the workplace and an employer's obligation to accommodate pregnancy.

PRACTICE TIP:  Make sure you review ALL of your employee postings once a year to determine if there have been any changes.  

If I call my worker an independent contractor, that's good enough ... right?

No.  Unfortunately, it is not.  Both federal and state governments look closely as to how a worker is classified.  Understandably, the driving focus is money.  An employer need not withhold or pay taxes (including expensive payroll taxes such as Social Security and Medicare) for an independent contractor, and it will have fewer legal obligations to an independent contractor than to an employee.  As such, it is appealing to label a worker an independent contractor.  However, it is not that simple.  There are many tests to determine whether a worker qualifies as an independent contractor.

Figuring out how to classify and treat so as to avoid agency investigation and audits can be a complicated undertaking.  There are numerous agencies involved with the investigation of misclassified workers.  These include the IRS, The U.S. Department of Labor, the state unemployment compensation board, the state's workers' compensation insurance agency, the state tax department, and the state department of labor.  To avoid problems such as audits, fines, and taxes, you should learn the rules of all of the following agencies before you hire a worker.

PRACTICE TIP:  Some of the strategies to avoid problems include hiring incorporated independent contractors, not exercising control over independent contractors, and using an employee leasing company.  Consult an employment attorney to review your individual work situation.

Social Media and Your Employees

Can you discipline employees who post negative comments on Facebook, Twitter, or other social networking sites?

Well ... it depends on the topic of the comments and whether the employee is engaging in protected “concerted activity.” If you are like most employers, your first reaction may be immediately to discipline or even terminate the employee.  Assuming that your employee is “at will,” you may be within your legal rights to take some action based on Facebook or other social media postings.  But, employers have been targets of recent court and National Labor Relations Board (NLRB) cases when they terminated employees who “mouthed off” about their workplace online. Specifically, if an employee is disciplined for inappropriate use of social media, she may have a claim under the National Labor Relationships Act (NLRA) if her social media post addresses terms and conditions of employment. 

PRACTICE TIP:  When determining whether to discipline and/or terminate an employee based on social media use, review your policy first.  Does your handbook clearly provide for prohibitions on inappropriate social media use?  If so, then review the message, its context, whether it's protected speech, and make a case-by-case determination. 

Does the ADA apply to applicants?

Yes, yes it does.

In the case of disabled job candidates, your accommodation obligations under the Americans with Disabilities Act (ADA) certainly apply.  As an initial matter, you may have to accommodate a disabled person in the application process, for example, by making your facilities accessible or providing extra time to take a test.  Second, you may have to offer an accommodation that would allow the applicant to perform the essential functions of the job.

You can show your commitment to complying with the ADA by taking a few simple steps to make your workplace accessible and friendly to the disabled.  This approach makes good business sense and can protect you against liability for disability discrimination.

PRACTICE TIP:  Even if unsure as to whether an applicant and/or employee has a qualifying disability, engage in the interactive process.  The employer and employee work together to identify opportunities and arrive at a reasonable accommodation, if possible.