On November 6, 1986, the enactment of the Immigration Reform and Control Act required employers to verify the identity and employment eligibility of their employees and created criminal and civil sanctions for employment related violations. The Act requires employers to verify the identity and employment eligibility of all individuals hired in the United States after November 6, 1986. Employers are required by law to maintain for inspection 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 employer, whichever is longer.

When technical or procedural violations are found during an I-9 audit, an employer is given ten business days to make corrections. An employer may receive a monetary fine for all substantive and uncorrected technical violations. Employers determined to have knowingly hired or continued to employ unauthorized workers will be required to cease the unlawful activity, may be fined, and in certain situations may be prosecuted criminally. Additionally, an employer found to have knowingly hired or continued to employ unauthorized workers may be subject to debarment by ICE, meaning that the employer will be prevented from participating in future federal contracts and from receiving other government benefits. Monetary penalties for knowingly hire and continuing to employ violations range from $375 to $16,000 per violation, with repeat offenders receiving penalties at the higher end.

Penalties for Knowing Hire / Continuing to Employ Violations

Employers determined to have knowingly hire or continuing to employ violations shall be required to cease the unlawful activity and may be fined. The agent or auditor will divide the number of knowing hire and continuing to employ violations by the number of employees for whom a Form I-9 should have been prepared to obtain a violation percentage. This percentage provides a base fine amount depending on whether this is a First Tier (1st time violator), Second Tier (2nd time violator), or Third Tier (3rd or subsequent time violator) case. The standard fine amount listed in the table relates to each knowing hire and continuing to employ violation. The range of the three tiers of penalty amounts (Since the passage of IRCA in 1986, federal civil monetary penalties have been increased on two occasions in 1999 and 2008 pursuant to the Federal Civil Penalties Inflation Act of 1990, as amended by the Debt Collection Improvement Act of 1996. These adjustments are designed to account for inflation in the calculation of civil monetary penalties and are determined by a non-discretionary, statutory formula are as follows:

KNOWING HIRE / CONTINUING TO EMPLOY FINE SCHEDULE
(FOR VIOLATIONS OCCURRING ON OR AFTER 3/27/08)

KNOWING HIRE AND CONTINUING TO EMPLOY VIOLATIONS FIRST TIER $375 – $3,200 SECOND $3,200 – $6,500 THIRD TIER $4,300 – $16,000
Standard Fine Amount
0% –  9% $375 $3,200 $4,300
10% – 19% $845 $3,750 $6,250
20% – 29% $1315 $4,300 $8,200
30% – 39% $1785 $4,850 $10,150
40% – 49% $2255 $5,400 $12,100
50% or more $2,725 $5,950 $14,050

Employers must be careful while filling Form I-9s as negligence can also lead hefty fines and negative publicity for organizations. The last few months have seen companies coming under the scrutiny of ICE and ending up with discrimination lawsuits and heavy financial penalties.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Any issues regarding compliance and obligations under United States or International laws or regulations should be addressed through your legal department or outside counsel.