Employer-Friendly Changes in Employment Verification Compliance Requirements

Is the U.S. government finally catching up with today’s technological advancements? It appears so, in light of the Department of Homeland Security’s recent efforts to introduce technology into the employment verification process. Although all employers, regardless of size, are still required by law to verify the identity and employment eligibility of each of its employees, recent changes in the law will permit employers to retain the form necessary to record this information (Form I-9) in electronic format. Better still, should corporate technology permit, employers may now also choose to complete the Form I-9 electronically, making the forms easier to read and search. In spite of these new improvements, employers should know that failure to comply with basic employment verification requirements may still result in either civil or criminal penalties, depending on the type, severity and/or frequency of the violation(s) at issue.

Responsibilities Under the Law: What is the I-9?

Every employer is required to verify each of its employees’ identity and work authorization, regardless of whether its staff is comprised entirely of U.S. citizens, entirely of foreign nationals, or contains some mixture of both U.S. citizens and foreign nationals. The instructions provided on Form I-9 require the information provided by the employee be recorded on the form and verified by the person preparing the form. This employment verification process must be completed within the first three days of hiring any employee. If the employee is not retained for more than three days, such information ought to be documented on the first day of hire. Failure to complete any of these procedures can lead to penalties against the employer, should an I-9 audit arise in the future. Once the Form I-9 is completed, it is not filed with the U.S. government but is instead retained by the employer as part of its records for a period of either three years after the employee’s initial date of hire, or one year after the employee’s date of termination, whichever is later. Employers are not legally required to retain copies of the supporting documents provided by the employee, although company policy on this matter should be reviewed by legal counsel. If an employer chooses to copy identity documentation then it should do so for all of its employees in a uniform fashion.

GT routinely presents seminars on the I-9 process in an effort to assist employers in understanding the form and their specific responsibilities. We were pleased to have government speakers including the Department of Homeland Security (ICE) and the Department of Justice’s Office of Special Counsel at our previous seminars.

Difficulties With Compliance to the Regulations

Performing these responsibilities can be tedious, complicated and confusing for employers, especially considering the various types of permissible documentation that may be submitted and the numerous categories of work authorized foreign nationals. Still, since September 11th there has been a renewed interest in the enforcement of employment verification requirements with respect to the security-sensitive industries. Therefore, it is imperative that employers comply with these regulations. In the meantime, Congress has been working to improve the procedures available to ease the burdens imposed on employers during this process, thereby making it as user-friendly, efficient and cost-effective as possible.

Recent Congressional Assistance

In late 2004, Congress responded to employers’ complaints regarding the difficulties imposed on them by these requirements. As a result, it drafted and passed legislation permitting employers to use new methods for verification and document retention. The resulting legislation was signed into law by President Bush in October of 2004 and was assigned an effective date of April 28, 2005. Therefore, preliminary information about the implementation of these new rules regarding storage and signature alternatives has just recently been released by the Department of Homeland Security’s Immigration and Customs Enforcement (“ICE”) division. Although DHS has not yet produced any final regulations outlining this option, ICE has produced interim guidelines on its website (www.ice.gov) in order to make use of these new electronic alternatives.

In the past, despite more recent technological advancements, the laws governing employment eligibility verification only permitted employers to complete the Form I-9 by hand and to retain its copies in either paper, microfilm, or microfiche format. As a result, abiding by the document retention policies was time consuming, tedious and restrictive, especially in the case of an audit. As a result of this new legislation, employers may now choose to electronically complete, sign, and store copies of the Form I-9. In addition, according to ICE, employers may choose to continue completing these forms by hand, while storing them in an electronic format, or they may choose to complete the forms electronically as well, with the assistance of some type of electronic signature -- using either electronic signature pads, personal identification numbers or “click to accept” boxes. ICE also recommends that employers include a quality assurance program and indexing system when upgrading its documentation and retention procedures to prevent or detect any alterations, additions, deletions or eliminations of electronically stored data, and for purposes of easy reference to documents recorded in the new system. It is important for employers to note, however, that at present, no formal regulations regarding this procedure have been issued by the federal government. Therefore, we recommend that employers await further, formal direction from ICE before making any changes to its current practices, as diversion from normal procedures may be costly in the long-run.

What’s Ahead?

In time, this technological improvement in the employment verification process is expected to make document retention policies more cost-effective for large employers, improve the employer’s ability to search the retained Form I-9s in case of an audit, and reduce the opportunity for error in form completion. ICE’s goal is to minimize the inconvenience of this process for employers, thereby providing an incentive for compliance with these regulations and consequently, minimizing the number of unauthorized workers in the United States. However, until these new technologies have been tested for reliability and approved by the U.S. Government, we recommend that employers continue to complete their I-9 forms by hand and retain paper copies of them in order to avoid any subsequent complications in case of an audit.

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