Immigration and I-9 Form Guidelines

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The Retail EmployerImmigration and I-9 Form Guidelines

Got Your I-9s In Order?

Better safe than sorry. In recent months we have seen increased activity and publicity relating to immigration enforcement, and Virginia employers should be reviewing their policies to ensure that both they—and their contractors—are complying with U.S. immigration law. Under the Immigration Reform and Control Act of 1986 (“IRCA”), employers must not knowingly hire or continue to employ any person not authorized to work in the United States. Employers also have a duty under IRCA to verify the employment eligibility of every person hired, through the I-9 process. Even minor deficiencies in completing the Employment Eligibility Verification form (the I-9) can result in an employer being cited for paperwork violations, resulting in fines up to $1,100 per employee/I-9 form. Moreover, when the paperwork errors are so serious as to indicate that the employer recklessly or knowingly employed unauthorized workers, the fines can be doubled, up to $2,200 per violation. There can even be a federal criminal prosecution if an employer engages in a pattern or practice of knowingly hiring or continuing to employ unauthorized workers.

In order to comply with the law, reduce the risk of administrative fines, and be prepared for a government audit, employers should develop and maintain an accurate I-9 employment eligibility verification system. Where the I-9 forms have been properly completed and retained, employers should be safe from fines for both paperwork and “knowing hire” charges. Accordingly, t he first step every employer should take is to review their I-9 files to be sure that they are complete and up-to-date. A few points to keep in mind when reviewing your I-9 files:

All employers must have completed I-9 forms for all employees hired on or after November 6, 1986. There is no minimum number of employees for this law to apply.
The employee must complete Section 1 of the I-9 form on or before the date of hire.
The employer must complete Section 2 of the I-9 form and review the documents presented by the employee within 3 business days of hire.
The I-9 form contains a list of approved documents which may be utilized by the employee to establish proof of identity and eligibility for work. So long as the employee presents documents from among those on the approved list, the choice of documents is up to the employee. It is not permissible for an employer to specify the documents to be presented by employees.
Employers are permitted to make copies of the documents that have been presented by the employees for the I-9. It is advisable, but not required for the employer to make these copies, in order to demonstrate the apparent legitimacy of the documents if there is a later determination that they were false. However, i t is important that the employer’s policy in this regard be standardized and applied consistently for all employees. An employer may be accused of unlawful discrimination if it makes copies of documents presented by only select employees.

Detailed information about the I-9 form and the employment verification requirements appears on the U.S. Citizenship and Immigration Services (USCIS) website, at http://www.uscis.gov/files/nativedocuments/m-274.pdf

Although the Form I-9 rules apply only to employees and not to independent contractors, an employer cannot use contractors in order to evade the requirements of the law. This is what the government has alleged in some recent high-profile raids that led to payment of a multi-million dollar fine by a large retailer which was accused of using independent contractor janitorial services in order to avoid the I-9 requirements.

IRCA violations committed by parties with whom you contract -- whether paperwork violations or the actual employment of unauthorized aliens -- may expose your company to liability. To minimize the risk, you need to be certain that a true independent contractor relationship exists between your company and your contractors. Even then, you need to be attentive to the contractors’ conduct and should take affirmative steps to confirm that the contractor is acting in accordance with IRCA requirements. As an employer, you are well-advised to check your contracts, evaluate your actions, and evaluate your contractors’ actions, to make sure that your business is maintaining true independent contractor relationships. Failure to do so may result in a determination that some of your contractors’ employees have become your employees.

Include a clause in your contract with the contractor confirming that the relationship is an independent contractor relationship, and identifying the principal factors that demonstrate the independent contractor status. While various employment laws have slightly different ways to distinguish an employee from an independent contractor, the test utilized by the Internal Revenue Service is most widely recognized and provides good general guidance. In the final analysis, the distinction between an employee and an independent contractor turns on a number of factors, but first among those is whether the employer has the right to control the work of the individual: the exercise of control suggests that the worker is an employee. The absence of control, and a focus only upon the result achieved, is more consistent with an independent contractor relationship.
An employer should establish guidelines for the use of independent contractors which are consistent with the applicable regulations. For example, the IRS regulations suggest that a company provides tools for workers, but that independent contractors provide their own tools. Accordingly, it would be prudent to establish guidelines which specify that management should not provide tools and equipment for use by contractors. Similarly, IRS regulations recognize that a company directs the work of an employee, but only the results to be obtained from a contractor. Accordingly, guidelines should specify that management will not direct the means and methods to perform tasks used by contractors. Guidelines should also direct that management refrain from taking other steps that suggest an employment relationship, e.g., setting the contractor’s hours of work, or using the services of a contractor in such a way as to limit the contractor’s ability to perform work for other customers.
In drafting the agreement with your contractor company, you should include language clearly setting forth the contractor’s responsibility for I-9 compliance, including an acknowledgment by the contractor that it is aware of and in compliance with IRCA, a provision stating that it is the contractor’s responsibility to complete I-9’s for all employees assigned to your place of business, a representation by the contractor that it is not knowingly employing any workers assigned to the employer who are not authorized to work in the United States, and a clause pursuant to which the contractor agrees to indemnify the employer for any liability arising out of its IRCA violations.
An employer should conduct an audit of its existing independent contractor relationships to confirm, even when they have been set up correctly, that they are being properly maintained as independent contractor relationships and are not morphing into an employment relationship. Despite what the contract says, if your on-site supervisors are actually directing the work of the individuals who are on a contractor’s janitorial crew, an employment relationship may exist, and you may be subject to fines and prosecution for failure to maintain I-9s, and for employment of unauthorized individuals.
Require that the contractors provide you with copies of the form I-9s that they have completed for all of their workers performing services on your contract or, alternatively, require that the contractors permit you to audit their I-9 compliance for workers performing duties on your contract.

If you are working with contractors, it is possible that being careful about your own I-9 compliance is insufficient. Employers need to be attentive not only to the immigration status of their own employees, but also be attentive to the status of individuals who are providing services through what is supposed to be an “independent contractor” arrangement. In order to fulfill our legal obligations, and to act consistently with our nation’s immigration laws, particularly in light of the aggressive enforcement activities of the federal government, employers are wise to invest the time and effort to address this issue correctly. As is so often the case in employment law matters, violations are much more expensive than compliance on the front end.

David E. Nagle has advised employers with respect to legal issues in the workplace for over 25 years. He is a partner in the Richmond office of Jackson Lewis, a law firm devoted exclusively to the representation of employers in labor, employment, employee benefits and immigration law matters. Jackson Lewis has 400 attorneys in 30 offices across the nation. David may be contacted at (804) 648-4077, or at nagled@jacksonlewis.com.

Calls requesting information on the Labor Law Information Program should be directed to Preston Perrin with the Retail Merchants Association at 804-662-5500.