Why I-9 Compliance is a Must for a PEO

Although Professional Employer Organizations, usually referred to as PEOs, have somewhat of a co-employment relationship with clients, PEOs are typically responsible for human resources, benefits, and taxes for worksite employees. For this reason, PEOs are held to the same standards as other employers when it comes to being Form I-9 compliant.

As set forth by the 1986 Immigration and Reform Control Act, the federal government created the Form I-9, which is a document that assists in establishing the identity and eligibility of employment for individuals working in the United States.

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The Form I-9 is compiled of three main sections. Section one of the form is to be completed by the employee by the first day of employment, with employers reviewing for the document for completion.  Section two of the Form I-9 requires employees to provide proper identification documents to the employer within three days of the employee’s first day of work. Employers are then expected to review the documents in good faith to establish the documents’ authenticity. The last section of the form must be completed if there is a change in an employee’s name status, work status (such as expiring work authorization), or employment such as a rehire within three years of the date on the original Form I-9.

The Form I-9 must be completed in its entirety without any missing fields or signatures. The occurrence of such could result in violations that come with serious penalties such as expensive fines, a loss of workforce, or even the loss of a business license.

How can PEOs stay I-9 compliant?

Being Form I-9 compliant is the law, and compliance for PEOs is included. While an explanation of completing the Form I-9 may sound relatively easy in theory, it is seldom viewed so by employers. In an effort to help employers better understand the process, the United States Citizenship and Immigration Services put together a one hundred plus page manual that can guide users.

While it is not uncommon for employers to utilize the manual, companies are increasingly turning to another resource to complement their I-9 compliance efforts—digital I-9 software. This user-friendly software can help PEOs with I-9 forms by digitizing the information, minimizing common human error, and alerting the company of impending deadlines. Each of these features can play a role in achieving and maintaining compliance for PEOs.

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How Digital I-9 Software Can Help

When it comes to handling a Form I-9 for multiple employees as PEOs often do, digital I-9 software may save employers valuable time and paper while simultaneously reducing the margin for error. This paperless solution can keep the Form I-9 process on track and help prevent unwanted compliance surprises with flexible reporting availability.

A PEO that chooses to enlist the help of a digital I-9 software program will need to do its homework up front to ensure that the company it chooses has substantial experience with catering to employers via outstanding customer service and troubleshooting capabilities.

In addition to these basic services, a company’s digital I-9 software program should provide some, if not all, of the below features to help ensure compliance for PEOs.

  • According to the Form I-9, the first section must be completed by the employee no later than the first day on the job. The form will require some basic information that could give some employees pause. Most digital I-9 software programs should provide employees with an advance checklist so they can review and prepare for the information needed before it is time to fill out the form, which should eliminate uncertainty on the employee’s part. The program should also offer a checklist to employers which can aid them in keeping track of which Form I-9 items still need to be completed.
  • Mistake Reduction. Another popular feature with PEOs who are processing many forms at one time is the software’s ability to quickly search for common human errors, such as blank or incomplete fields or missing signatures. Any one of these mistakes could create a situation of noncompliance for PEOs.
  • Digital I-9 software programs were developed to assist employers with keeping track of Form I-9 documents and providing action alerts for those documents approaching expiration.  An expired I-9 document could negatively affect compliance for PEOs, which is why tracking is essential.
  • E-Verify Interface: A reputable software program should be able to work in tandem with E-Verify, which can allow for auto-population in the system, alerts for important notifications, and warnings about cases that are still open.
  • Flexible Reporting. Rather than waiting for an official audit, digital I-9 software can provide reports at the company’s leisure. This feature allows for companies to pull regular reports to verify if they are compliant, instead of waiting for an audit.
  • Audit Assistance. The company providing the digital I-9 software should be able to provide employers and auditors with an audit trail and details about specific operations. Providers should also be willing to assist with mass prints of Form I-9 records in the case of an audit.

I-9 compliance is just one of the many responsibilities of a PEO. It only makes sense to utilize a digital I-9 software program to take the guesswork out of compliance for PEOs.

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