Cost of Compliance: Inflation Driving Up I-9 Fines for Employers
By James Larsen, Managing Attorney
Higher grocery prices might be hitting your wallet hard, but inflation's impact goes beyond just food costs. On June 28, 2024, to account for inflation, the U.S. Department of Homeland Security significantly raised employer fines for I-9 violations, with penalties now ranging from $281 to an eye-popping $27,894 per employee.
This dramatic increase is a clear indication that inflation is driving up the cost of compliance for employers. As inflation affects everyday expenses, it’s also making obligations under Form I-9 more costly. Employers need to pay attention and enhance their compliance efforts to avoid these escalating fines. With increased penalties and the looming threat of more rigorous inspections, it's crucial for employers to take immediate action to ensure their I-9 practices are robust.
The New Reality of I-9 Compliance
Immigration impacts all employers. Since 1986, U.S. employers have been required to verify the identify and work authorization of their new hires using the Form I-9 or face civil penalties. These penalties were designed to force employers to prioritize compliance with federal immigration law by hiring only workers who are lawfully authorized for employment in the United States. The possibility of a new presidential administration in 2025 could mean a return to a more aggressive style worksite enforcement that employers have not seen since 2008-2012 including a significant increase in I-9 inspections. Now is not the time for employers to be complacent.
The Financial and Reputational Risks
The financial impact of non-compliance could be severe. Imagine facing fines in the hundreds of thousands of dollars, or even millions of dollars for multiple violations. Beyond the monetary penalties, the reputational damage from being cited for I-9 violations could have long-lasting effects on your business, especially if the employer has engaged in discriminatory practices in completing the Forms I-9 and becomes subject to a U.S. Department of Justice press release. The cost of ignorance or delay is simply too high.
Technical vs. Substantive Violations: What You Need to Know
Here’s a breakdown of a few common issued I have observed issues during my travels around the country conducting I-9 audits.
Technical Violations
- Date of Hire: Not ensuring that Section 1 is dated at the time of hire.
- Incomplete Information: Missing address, birth date, or A-number in Section 1, or listing the A-number in Section 2 or on a retained document but not in Section 1.
- Preparer/Translator Certification: Failing to complete the “Preparer and/or Translator Certification” when applicable.
- Document Details: Not providing proper document details (title, identification number(s), expiration date(s)) in Section 2, although a legible copy is retained.
- Certification Errors: Failing to provide the representative’s title, company name, and/or address.
Technical errors may become substantive if they are committed in bad faith. For instance, an employer’s attempt to correct an error with false or misleading information can lead to more severe penalties. The "good faith defense" might not apply if the error was intentional, reckless, or previously warned against.
Substantive Violations
Substantive violations involve significant errors that result in the failure to verify an employee’s work eligibility properly. These violations often result in higher fines and, even when belatedly corrected after the fact. Examples include:
- Failure to Produce Form I-9: Not having a Form I-9 for an employee.
- Missing Information: Employee’s name missing in Section 1, or no box checked to attest to the employee’s status.
- Signature Issues: No signatures from the employee and/or employer.
- A-Number Issues: Missing A-number in Section 1 for non-citizens.
- Incomplete Document Information: Failing to record document information fully in Section 2.
- Unacceptable Documents: Recording unacceptable documents in Lists A, B, and/or C.
- Verification Errors: Failing to verify correct documents in Section 3, or not describing documents correctly without retaining a legible copy.
- Section 3 Errors: Failing to sign or date Section 3 appropriately, or not dating it by the expiration of the individual’s work authorization.
- Employing Unauthorized Workers: If you knowingly hire an individual who is not authorized to work in the U.S., it constitutes a substantive violation.
- Failure to Maintain Records: Not having I-9 forms for employees hired after November 7, 1986, or failing to retain them for the required retention period can lead to severe penalties.
The Importance of Proactive Compliance
I-9 compliance shouldn’t be an afterthought or a mere checklist item. It should be an integral part of your business operations. Proper training, regular internal audits, and swift action on any identified issues will help you avoid penalties and protect your business.
Given the increased risks and potential for heightened enforcement, now is the time to act. Strengthen your I-9 procedures and ensure your business is fully compliant. Waiting until ICE arrives with a Notice of Inspection is a gamble you can’t afford.
If you’re unsure about your I-9 compliance status or need guidance on complex issues, consulting with an experienced immigration attorney is highly recommended. Taking proactive steps today will safeguard your business from costly penalties and reputational damage tomorrow.
About attorney James Larsen: James has established himself as a leading employer advocate in I-9 and E-Verify compliance through his extensive experience advising employers on immigration-related compliance while serving as Of Counsel at Ogletree Deakins and as an Associate Immigration Attorney at Foster LLP. His presentations to HR professionals have included:
- North Texas Society for Human Resource Management Conference in Dallas, Texas
- Society for Human Resource Management Conference in Tulsa, Oklahoma
- Society for Human Resource Management Conference in Lafayette, Louisiana
- Gulf Coast Symposium on Human Resource Issues in Houston, Texas
- American Human Resource Management Association Conference in San Antonio, Texas
In addition to his conference presentations, James has overseen large-scale audits for Fortune 500 companies, traveling across the U.S. from California to New York to address potential non-compliance issues. He has also conducted thorough immigration-related due diligence for companies acquiring other entities, helping to identify and resolve potential liabilities and indemnify purchasers against existing issues.
Throughout his career, James has represented employers in response to Notices of Inspection from Immigration and Customs Enforcement (ICE), effectively resolving Notices of Technical or Procedural Errors, Notices of Suspect Documents, and Notices of Intent to Fine. His comprehensive approach and respected HR training underscore his capability in managing complex I-9 and E-Verify compliance challenges. To schedule a proactive I-9 audit at your business or to request assistance with an ongoing government investigation, e-mail: info@larsenimmigration.com.
Immigration law changes rapidly. This article is for informational purposes only, reflects the law as of its publication date, and may be superseded by later changes in the law, regulations or agency policy. It is not legal advice, and reading it does not create an attorney-client relationship.La ley de inmigración cambia rápidamente. Este artículo es solo para fines informativos, refleja la ley a la fecha de su publicación y puede quedar superado por cambios posteriores en la ley, las regulaciones o las políticas de las agencias. No es asesoría legal, y leerlo no crea una relación abogado-cliente.