Small Business and I-9 Compliance

Businesses nationwide have been expected to complete a Form I-9 for employees to ensure their eligibility to work in the U.S. since the Immigration Reform and Control Act of 1986 has been in place. While this can be a bigger undertaking for larger businesses of one hundred or more employees, federal law still requires that small businesses follow the same rules to be I-9 compliant. In reality, the stakes can be even higher for small businesses found to be non-compliant. For this reason, more small businesses are turning to digital I-9 compliance software to help make the process more effective and reliable, from start to finish. Businesses with a defined process and ownership and who regularly track and proactively review their I-9s are best positioned to steer clear of penalties and fines during an I-9 audit.

Common I-9 Compliance Roadblocks for Small Businesses

The Form I-9 can appear unassuming, after all it is just a form. However, the amount of data required, combined with the varied guidelines and deadlines for each section, especially Section 2 of the form, can make it complicated and sometimes confusing. And some complications can yield mistakes that can negatively impact a business, and the need to avoid common I-9 compliance roadblocks like these becomes critical. Here are some of the most common mistakes small businesses often make:

Innocent mistakes.

Through the eyes of an ICE Auditor, a mistake is a mistake, whether it is innocent or not. An error can range from accidentally transposing a couple of numbers to unintentionally leaving a field blank to forgetting to add a signature where designated.

Missed deadlines.

All three sections of a Form I-9 have distinct deadlines for completion. Should a section not be finished within the assigned window of time, it may be considered a violation, which could result in a penalty.

Incomplete recording of the Identification & Work Authorization documents.

If an employer is not diligent in collecting and recording all of the appropriate documents required on the Form I-9, it will affect compliance and be considered a violation.

Not Tracking of Expired Document.

Some of the work authorization documents expire and require follow up from time to time to collect new valid information. For example, an employee who is authorized to work under an temporary status such as a H-1b, L-1a/b visa or one who holds an Employment Authorization Document (EAD) all have expiring work authorization dates. It is the employer’s responsibility to be aware of upcoming documents set to expire and to contact the employee well in advance of the expiration date so to obtain updated proof of eligibility to work before those documents expire.

Retention Management.

Employers are required by law to maintain for inspection the original Forms I-9 for all current employees. In the case of former employees, retention of Forms I-9 are required for a period of at least three years from the date of hire or for one year after the employee is no longer employed, whichever is longer.

How I-9 Violations Can Spell Big Problems for Small Businesses

The consequences of being found non-compliant during an audit on one or more counts may spell big problems for small businesses. Violations are normally categorized into one of these two categories:

  1. Civil. This is typically due to not being compliant via employment verification, document fraud or abuse, discrimination, etc.
  2. Criminal. These violations can be more serious and are generally due to documented patterns of hiring, referring, or conducting fee-based recruiting of individuals unauthorized to work in the United States.

Fines and penalties can be crippling to the bottom line. Auditors typically apply a fine per violation. That can potentially mean multiple violations for just one employee. If those violations appear in more than one employee Form I-9, the hefty fines and penalties associated can add up quickly. For example, penalties for substantive violations, which includes failing to produce a Form I-9, range from $230 to $2,292 per violation. Where as monetary penalties for an employer who knowingly employs and continues to employ unauthorized workers could face violations range up to $20k per violation. ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations. In a worse case scenario a company can lose their license to operate temporarily or indefinitely if found non-compliant.

If a company receives a Notice of Inspection (NOI) from U.S. Immigrations and Customs Enforcement “ICE” employers they should contact their legal counsel immediately for advice. ICE will provide the company with at least three business days to produce the Forms I-9. Often, ICE will also request other supporting documentation, such as a copy of the payroll, list of current employees, Articles of Incorporation, and business licenses.

Why Small Businesses Can Benefit from Using Digital I-9 Compliance Software

Because a small business often has less management positions to assist with new hires and handling the employment on-boarding process and paperwork, additional resources such as digital I-9 compliance software is extremely helpful. Some of the ways that compliance software can be beneficial to a small business include:

  • Minimization of common mistakes due to errors such as blank fields or missing signatures, reducing a companies risks for violations
  • Assistance with tracking the hiring process progression with notifications for upcoming deadlines
  • Provides additional oversight of the employment verification, reverification, and document retention stages
  • Notifications sent regarding upcoming document expiration dates
  • Integration between the electronic Form I-9 and the government’s E-Verify web services saves time, costs and further reduces opportunity for error and non-compliance liabilities
  • Centralized management reports to track omissions, actions and overall program’s compliance

When it comes to small businesses and I-9 compliance, there is no leniency in federal laws regarding ensuring that employees are eligible to work in the United States. Do not carry this weight on your shoulders alone or unnecessarily risk your company’s compliance. Enlist the help of a vendor who can implement a digital I-9 compliance software today and bask in the peace of mind it can offer.

2021 E-Verify Mandates

All employers need to be aware of the revised 2021 E-Verify mandates to ensure compliance, especially if operating across state lines. Requirements are changing frequently and penalties for non-compliance can include monetary fines per violation and denial, suspension, or revocation of an employer’s business license. While not every U.S. employer is required to use the E-Verify program, it is critical that employers educate themselves on how the program works and if it is mandatory in their state(s) of operation.

How E-Verify Works

E-Verify is a government sponsored web-based program which is designed to compare information gathered from an employee when completing the Form I-9 against other federal agency databases, such as the U.S. Department of Homeland Security (DHS) and the Social Security Administration (SSA). This quick database comparison can produce results in as little as three to five seconds. At the time of its rollout, E-Verify was largely a voluntary program, however, it has grown in popularity as it is widely considered an added layer of protection for employers in verifying an employee’s identity and work eligibility in the U.S. However, employers should note that the E-Verify program will not perform a criminal background check on their employees. Separate operational processes should be in place to handle this review.

Who Do the New 2021 E-Verify Mandates Apply To?

As of 2021, the list of states and their mandates for the E-Verify program continues to grow. The new changes can be broken down as follows:

States requiring at least some employers to use the E-Verify program:

  • Alabama
  • Arizona
  • Georgia
  • Mississippi
  • North Carolina
  • South Carolina
  • Tennessee
  • Utah

State contractors only are mandated to use E-Verify in:

  • Colorado
  • Louisiana
  • Minnesota

States where E-Verify requirements exist for local municipalities:

  • Michigan
  • New York
  • Oregon
  • Washington

Public employers only are required to use E-Verify in:

  • Idaho
  • Virginia

Contractors and/or public employers working with the state must use E-Verify in:

  • Florida
  • Indiana
  • Missouri
  • Nebraska
  • Oklahoma
  • Pennsylvania
  • Texas

As is illustrated above, E-Verify requirements can vary widely from one state to another and often are based on the number of people employed within a business. When operating across state lines, it is a good practice to implement the E-Verify process across all business locations, even if it is not required by the law to ensure consistency for all work sites and to avoid the appearance of discriminatory employment practices.

E-Verify Is Not Yet Mandatory for All Employers

For many, E-Verify use is not mandatory, unless a company is:

  • Ordered to use E-Verify per an official legal ruling
  • Operating in a state that requires employers to participate
  • Participating in federal contracts or subcontracts containing the Federal Acquisition Regulation (FAR) E-Verify clause

Although E-Verify may not be required for all businesses, companies located  in the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of Northern Marina Islands are eligible to use the program.

Enrolling in E-Verify

There are a few different options for enrolling in E-Verify which include Employer Access, E-Verify Employer Agent Access, and Corporate Administrator Access.

The E-Verify enrollment and onboarding process may include signing a program agreement and participating in mandatory web training to ensure maximum understanding and effective use of the program. To ensure every step is followed to the letter, new companies enrolling in the program are encouraged to visit the E-Verify website for additional information and an instructional webinar.

Digital I-9 Compliance Software is a Valuable Resource for E-Verify

When it comes to E-Verify, many businesses are increasingly turning to the use of digital I-9 compliance software for help in streamlining the process. This can be particularly critical as much of the input used for the Form I-9 is used to create an E-Verify record for each employee at the time of hire, reducing the need for retyping information into E-Verify and therefore lowering the risk of making errors. In addition, reliable I-9 compliance software can send E-Verify alerts of required employer actions and track the status on any cases that may be left open or unresolved in the system.

Review the new 2021 E-Verify mandates in detail and consider implementing digital I-9 compliance software to ensure you are effectively managing your compliance requirements and minimizing your company’s liabilities.

E-Verify Tentative Nonconfirmation (TNC) Action Enforcement

In October of 2020, the United States Citizenship and Immigration Services (USCIS) announced it would be enforcing the existing rule for employers to take action within ten federal government working days of receiving a Tentative Nonconfirmation (TNC) for an employee. Prior to this announcement, USCIS guidance urged employers to generally take action as soon as possible upon receipt of a TNC and was not specific. If you are currently enrolled in E-Verify, you have likely received one of these E-Verify e-mail notices by now, which can be quite startling. This communication is a gentle reminder of the new focus on enforcement and the employers wake up call to take intentional action.

The October announcement has many employers wondering why the sudden increase in enforcement. Essentially, USCIS was seeing a large number of open TNC cases, which likely indicated that:

  1. E-Verify users are not referring cases to government agencies when an employee contests to resolve a TNC
  2. E-Verify users are not closing a case if an employee chooses not to contest the TNC

The bottom line here is that when an E-Verify user fails to take their responsibilities for E-Verify actions they are at risk of receiving a violation which can negatively impact their compliance. In some cases it could even be possible that the employer’s E-Verify account could be terminated, rendering the business unable to operate.

Employers using E-Verify have the duty of care to ensure those in the organization who are responsible for this oversight truly understand the requirements of the program, grounds for TNCs, and how to resolve these E-Verify notices within the ten-day deadline in order to stay compliant. Completing the TNC process strengthens E-Verify program and helps ensure employers close E-Verify cases according to program requirements. Unfamiliar with E-Verify? See more about the program below.

What Is an E-Verify Tentative Nonconfirmation (TNC)?

A TNC typically means that the information input into the E-Verify system by an employer does not match government agency records from the Department of Homeland Security (DHS) or the Social Security Administration (SSA).

An employer could receive a TNC notification from DHS or SSA for one or more of the following reasons:

  • Information not entered correctly by the employee or employer, including transposed or mismatched numbers, incorrect dates or misspelling of employee’s first or last name
  • Unreported name changes by the employee
  • Immigration or citizenship status change
  • Unverifiable passport or identity information such as a driver’s license or state ID card
  • Photo match issue
  • DHS record such as an Alien number, I-94 number and/or foreign passport number is incorrect

Actions Required for a TNC

It is worth noting that the ten-day window is not dedicated to resolving the TNC issue, rather it simply mandates that an employer either declare in the E-Verify system that an employee is contesting the TNC or otherwise close the individual’s case after then ten-day period has passed if they have received no decision from the employee.

According to E-Verify’s website, the proper steps to take upon receiving notification of a TNC are:

  • Further Action Notice. The employer must alert the employee in question of the TNC via a printed copy of the Further Action Notice. This notice gives the employer information about how to properly notify an employee about a TNC and additional information about the TNC itself.
  • Employee Decision. The employee must make a decision about contesting the TNC within the ten federal government working day period as properly indicated on the Further Action Notice. If an employer does not receive a decision by the end of the tenth day or if the employee confirms they will NOT contest the TNC, the employer may close that individual’s E-Verify case and end the employee’s employment.
  • Employee Contest. If an employee wishes to contest a TNC, the employer should update E-Verify with a referral date which sets the ten-day window and provides a specific date by which the employee must visit either a Department of Homeland Security or a Social Security Administration office. The type of TNC declared will dictate which type of office the employee should visit. It is critical to note that during the TNC period where the employee has confirmed that they will take the requisite action on the TNC, the employer may NOT take any adverse action (terminate, suspend, withhold or lower pay, etc).
  • Visit DHS or SSA Office. The employee promptly acts to resolve the mismatch issue. An employee should visit the DHS or SSA as soon as possible. If the employee does not act to resolve the TNC issue within ten working days of that employee referral, E-Verify may change the employee’s case status to E-Verify Final Nonconfirmation, after which an employer may terminate the employee.
  • Update E-Verify case. As appropriate, after a quick compare against other government databases, the employee’s E-Verify record will be electronically updated with a final conclusion either after a mismatch is resolved or no action is taken.
  • Employer closes E-Verify case. Whether it is due to not receiving a decision about contesting the TNC from an employee in the given time period or because E-Verify issued a Final Nonconfirmation, an employer will need to close the E-Verify case.

About E-Verify

E-Verify is an internet-based program available to employers to confirm the eligibility of their employees to work within the United States.

The information input into E-Verify are the same personal details collected on the Form I-9, which employees are federally mandated to complete on the first day of employment. Once entered the data is compared against records from government agencies to ensure identity and employment eligibility of an employee. Here is a comparison between Form I-9 and E-Verify:

Form I-9

Mandatory for all new hires

Does NOT require the employee to include a Social Security number

Does not require a photo on the identify documents (List B of the Form I-9)

Must be used to reverify expired employment authorization

E-Verify

Is voluntary for most employers*

Requires the employee to include a Social Security number

Requires a photo on identity documents (List B)

MAY NOT be used to reverify expired employment authorization

*E-Verify enrollment is voluntary for an employer unless they fall into one of the following categories:

  1. The employer has federal contracts or subcontracts containing the Federal Acquisition Regulation (FAR) E-Verify clause
  2. The employer has operation in a state where legislation requires it
  3. The employer has been provided an official legal ruling

More information about the E-Verify program can be found on the E-Verify website.

E-Verify Rolls Out New myUploads Feature

Resolving a U.S. Department of Homeland Security E-Verify Tentative Nonconfirmations (TNC) may now be a little more convenient as E-Verify announced their roll out of myUploads, a new feature that allows individuals to electronically upload images of required employment verification documents. The timing for myUploads is particularly a relief, given the October 2020 announcement by United States Citizenship and Immigration Services (USCIS) that they would be more diligent in enforcing their 10-day rule for employers to take appropriate action upon receipt of an E-Verify Tentative Nonconfirmation (TNC) notice.

How E-Verify Rolling out myUploads May Help

For many employees and employers the deadline of ten federal government working days can be incredibly stressful. However, E-Verify’s rollout of myUploads may help alleviate some of that stress.

This free, new feature allows individuals to electronically upload pictures of their documentation using a smart device or personal computer in an effort to quickly resolve E-Verify or Self Check DHS Tentative Nonconfirmations.

The convenience does not change the first part of the TNC process in which an employer must notify the employee of their receipt of a TNC. It is recommended that this be done discreetly, and that the employer provide the individual with a Further Action Notice (FAN) which can be instrumental in explaining the entire TNC process and provides E-Verify’s myUploads instructions.

If you have questions or concerns regarding the E-Verify program, TNCs, or the new myUploads feature, it is critical to an employer’s compliance status to review the details on E-Verify or to reach out to E-Verify directly for clarification as soon as possible.

What Is E-Verify?

Although this federal program is not currently required for every business in the nation, many employers choose to utilize this free web-based program to assist them with confirming the eligibility of employees to work in the United States.

Upon hiring, employers are required to have a Form I-9 completed for each employee. The purpose of this form as defined by the 1986 Immigration Reform and Control Act is to gather personal information and documentation from employees to help confirm their identity and eligibility to work in the U.S.

As an added layer of work authorization security, the E-Verify program is often used. Employers can open a case for an employee with information from their Form I-9. Then federal agencies such as the Social Security Administration and the Department of Homeland Security will compare that data with data of their own to further validate an employee’s work eligibility.

Currently E-Verify is available to employers and employees in all fifty U.S. states, as well as several other U.S. jurisdictions such as The District of Columbia, Puerto Rico, and the U.S. Virgin Islands to name just a few. Participation in the program is largely voluntary, unless:

  • An employer’s state legislation requires E-Verify to be used
  • An employer must use E-Verify due to an official legal ruling
  • An employer has federal contracts or subcontracts containing the Federal Acquisition Regulation (FAR) E-Verify clause

Companies with questions about whether their business is required to use E-Verify should visit the program’s website for more information.

Tentative Nonconfirmation Basics

In E-Verify terms, a Tentative Nonconfirmation or TNC is a sign that the data put into the E-Verify system does not match information on file with the government agencies of Department of Homeland Security or the Social Security Administration.

While receiving a TNC can be unsettling, there can be a number of reasons for this notice, some of which are rather benign but still require action. Among the most common situations resulting in a Tentative Nonconfirmation are:

  • Employee’s name that has not been reported to government agencies such as SSA
  • Information that contains transposed numbers
  • Incorrect information about an employee such as a wrong birth date
  • Immigration status that has not been updated
  • Citizenship status that has not been updated
  • Unverifiable identity or passport data
  • Photos that do not match

If an employer receives a TNC regarding an employee’s E-Verify case, they are required to alert the employee of the issue via a printed copy of the Further Action Notice and task them with resolving it by visiting the DHS or SSA within a specified timeframe. There are two common scenarios:

  1. The employee takes action with the SSA or DHS (whichever is applicable) to resolve the TNC
  2. The employee takes no action at all within the ten-day window set forth by USCIS

If an employee does not take action in the ten-day timeframe, an employer can label the case as Final Nonconfirmation (FNC), mark the case “Closed” in E-Verify and then terminate the employee.