Immigration Attorney John Fay: I9 Compliance Essentials for Employers

Gene Marks (00:00)

Hey, everybody, it's Gene Marks. You're about to listen to a great conversation that I had with John Fay. He is an immigration expert, an immigration attorney, and he was giving lots of advice on a very hot topic that we are all, as business owners, dealing with right now is making sure that we are in compliance with immigration rules. John and I talked about. We dug deep into the I-9 Form and all the documentation that's required. We talked about E-Verify as well, penalties and fines for not complying the rules of the road, what you want to do to make sure that you're protecting yourself and your workers in this era of more scrutiny on undocumented immigrants in this country. So, great conversation. Let's get to it. You'll hear John's advice. Here he goes.

Announcer (00:44)

Welcome to THRIVE, a Paychex Business Podcast. Your blueprint for navigating everything from people to policies to profits. And now your host, Gene Marks.

Gene Marks (00:55)

So, John Fay, thank you very much for joining me. I am really happy to have you on. You've got a lot of information that I know our audience are going to want to hear, so let's get to it. But before I get to your advice and some things that you have to, some actions that we can take, tell us a little bit about Equifax Workforce Solutions and also what you do there.

John Fay (01:17)

Yeah, absolutely. Well, thanks so much for having me today, Gene. My name is John Fay. I'm Director of Product Strategy at Equifax Workforce Solutions, where we're focused on, among other things, providing employers with solutions that go across the employee lifecycle. So, this could be onboarding, active employment, even offboarding. And in all of those areas, we are supporting HR compliance. So, you know, think things like legal and regulatory requirements, you know, things that are often complex, burdensome, subject to government review. Right. Those are the types of things that we try to support with our software and services. But my focus in particular is on the Form I-9. In a former life, I was a practicing immigration attorney, and I spent a lot of time helping employers basically figure out this process, how to actually complete their forms, use E-Verify, and all of these things. And Gene, if I can. If I can actually begin the podcast with a confession, sure. I really do like I-9. I know it may seem odd to express enjoyment about a government form, and my wife likes to remind me that I'm in the very small minority, but I find them fascinating and really looking forward to speaking with you about them today.

Gene Marks (02:35)

Okay, fair enough. Does she remind you of this when you guys are, like, trying to get to sleep at night. So it just, it helps her. It puts her to sleep. Is that, you know...

John Fay (02:43)

There might be a little bit of that. Yes, yes. And by the way, she actually does a lot with tax. So you can only imagine the fascinating dinner conversations.

Gene Marks (02:51)

I was about to say, you guys must be rock stars at cocktail parties, I am sure, right? People just gathering around you for information. It's great. You know, it's your, your expertise could not be more valuable than right now with what's going on with immigration. You know, before we started recording, I told you, I've written... I wrote a piece in for the Philly Inquirer and I wrote another piece for the Guardian just about like, you know, you know, hey, clients and employers and small and midsize businesses, we got to wake up. We're in a time right now where, you know, the current administration, as you not only announced, but is taking action against right now, undocumented, you know, immigrants. It's an issue. And they are going after businesses. So let's start with the basics. Okay? Explain to us, first of all, what exactly is an I-9 and how should we be using it?

John Fay (03:42)

Yeah. And so, you know, I think many in HR and many, many of your audience here know that the Form I-9 must be completed for every newly hired employee in the United States. And the reason they do that is in order to document the verification of the employee's identity and their eligibility to work in this country. Now, the form itself is deceptively simple, right? Like, the new hire is going to provide some basic biographic information. They're going to attest to their citizenship status, and then they're going to meet with the employer, and the employer is going to review documents. Right? And there are very specific rules around that as well. And all of this is documented on this Form I-9. But what I think often gets lost in the shuffle is that the I-9 embodies essentially a very important legal obligation, which states that employers are responsible for hiring a legal workforce. This requirement has been around since 1986. It was actually signed into law by then President Ronald Reagan. And what that law did, among other things, was to essentially deputize employers. Right? I mean, congratulations, you got a job you probably didn't want. And that is that you have to make sure that all of your new hires are authorized to work.

Gene Marks (05:03)

Right. And how do we do that? And actually, let's start with that. How do we do that? How do we just by filling out the form, or is it a fiduciary duty to take other steps to make sure that people are legally documented.

John Fay (05:20)

Yeah, it's a great question because I think a lot of times people think of I-9 Form and it's almost. It's thought of as just another onboarding, another piece of the onboarding puzzle. Okay, I'm going to complete, you know, all of these different forms. My direct deposit, my W-4. I got my I-9 Form. But it is actually a process. So you are going to have your employee complete some information. They do have to attest to their citizenship status. I'm a U.S. citizen. I'm a lawful permanent resident. I'm here on temporary work permit. But then they actually have to meet with the employee and they have to review those documents. So they have to look at the documents, they have to make sure that they are acceptable. There's a whole list of acceptable documents. They have to figure out which ones they are. And they have to determine in that moment do the documents reasonably appear to be genuine and do they relate to the person who's presenting it. That's really kind of the verification piece that again, I think often gets lost in the shuffle.

Gene Marks (06:17)

Is the I-9 Form... This is accessible online. You can get it from IRS.gov or Google for the form, I'm assuming. Once you fill out the form and go through the process, do you have to send it anywhere? Do you have to send it into the IRS or do you... What do you do with the form?

John Fay (06:34)

Yeah, so it's interesting the. So technically the form is owned by the Department of Homeland Security. It's actually published by USCIS, United States Citizenship and Immigration Services. And so, there was actually, there was a Stanford law professor, he actually looked at this and he figured out that the Form I-9 is probably the most completed federal form that is not actually filed with any government agency. So, the way that the law is set up is employers complete these forms. You know, they go through this verification process and then they just hold on to them. Right. I mean, they are ultimately subject to inspection and they just sit around and wait. So it's a little bit different. Right? Because to your point, a lot of people think like, oh, I'm going to be sending this somewhere, but it's actually just something that you retain.

Gene Marks (07:19)

Got it, got it. Do you only fill it out once?

John Fay (07:23)

So you would essentially fill it out for any new hire. It is... It can be... It can very much feel like a one and done type of thing, but there are some times when you do need to update it. So, for example, if your, if your employees who's here has temporary work authorization. Maybe they're here on a visa and that visa is going to expire. You would have to re- verify them. That's an update. Or some employers, you know, they have name change or, excuse me, employees have name changes. Uh, many times the employer will want to update the form as well. So there are some ongoing obligations associated with it.

Gene Marks (07:57)

Got it. What kind of... The documentation you had mentioned before. I mean, you said there was a list of documentation, but what are the most common forms? What advice do you have for employers to make sure that this documentation is legit? And I kind of imagine this is going to get harder and harder as AI and spoofing gets better and better. So what advice do you have for employers?

John Fay (08:22)

Yeah, it's a great question, because it's a challenge. So certainly the list of acceptable documents can be broad. The most common ones, and perhaps it's not that surprising, is a driver's license and a Social Security card. So as I mentioned earlier, ultimately the documentation needs to show both identity and work authorization. So in that instance, the driver's license shows identity. The Social Security card, as long as it's unrestricted, would show work authorization. But, you know, it could be a U.S. Passport, it could be a green card. There's one common. There's a category of document that is basically an ID that is issued by a federal agency, a state agency, or a local agency. And that could be thousands of different types of documents. So it can be. It can be very complex. Right? And to your point, you know, employers are not document experts, and as it turns out, the law does not require them to be. So it really is that reasonableness standard. What we always tell employers is, look, you don't have to get out the black lights and start, you know, looking at holograms and all those sorts of things. Under the law, technically, all you need to do is look at it and say, does that reasonably appear to be genuine? I think it is going to get harder with AI and I think the government is concerned about that as well.

Gene Marks (09:40)

We're going to get to E-Verify in a moment. But just sticking on the whole I-9 process. I have clients, John, that, you know, they've. They've immigrant workers. I'm thinking of one client that I have right now. They're in, like, you know, central Pennsylvania. They're a manufacturing facility. They have at least 25 or 30 hourly workers. Good workers, you know, good people. They've been with them for years. But, you know, should I be telling my client like, hey, you need to revisit the I-9s for these people, given the current environment, you know, ask again for their documentation, make sure that, you know, things are updated. Is that sort of a good practice to do now?

John Fay (10:22)

You know, it's, I think given the heightened sense of immigration enforcement that you mentioned. Right? So, we have been seeing that. Certainly you turn on the news any day and there's, there's some sort of immigration story. It's definitely a heightened climate. And we are seeing additional audits of employers. And of course, in many instances, we know that these audits are essentially looking for two things. They want to look at your I-9 forms, make sure you completed them, completed them properly. But they are also looking to make sure that you're hiring a legal workforce. So, to answer your question, I think it's always important for organizations, especially in this time, in this day and age, is to think about their I-9s and to make sure that they have been completing them properly. And so certainly if you do have a large population of noncitizen employees, I think it would make sense to do an internal audit, to do an internal assessment, just to make sure that the I-9s have been completed properly and most importantly, that everybody has continuing work authorization. There is one additional thing though, and I'll mention, because it can be challenging, the I-9 really has kind of two sides to the coin. Number one is we're trying to make sure that everybody's authorized to work. But built within the law are also certain employee protections. They're essentially anti-discrimination protections. And what those basically say is that you can't go too far or you can't treat people differently based on their protected class. And so I always like to caution employers, you know, make sure that you, you've done your I-9s, you've done them properly, but you know, don't, don't go in a situation where, for example, you are requesting documents over and over again or treating those non-citizen employees differently because then you can get in trouble with another government agency and that would be the Department of Justice.

Gene Marks (12:12)

Got it. Okay. You know, you kind of overlapped a little bit to my next question, which is great. But you know, do your employees have any recourse? You know, can they refuse to provide the documentation? Or I mean, is that, you know, I mean, do they have any recourse? Is there any invasion of their privacy, confidentiality, or is this just something that, like, no, if you, if you want to work at a company and you're an employee this is the kind of thing that you're going to have to submit.

John Fay (12:37)

You know, there is a, there is a privacy policy associated with, with the Form I-9 in terms of the information. But ultimately, you know, if you want to work in the United States as an employee, you know, employers are subject to this requirement. You really don't have any options in terms of whether or not you can or cannot present documents. There are protections, you know, associated with it. So, an employer, you know, can't treat you unfairly, can't discriminate you based upon your protected class, you know, those sorts of things, request too many documents, overly over-reverify you and those sorts of things. And so, you know, I think that is kind of important. And we've been seeing some state laws. For example, recently Illinois passed an amendment to their law which helps protect employees and make sure that, that employers are following all of the rules. So there are protections, but ultimately it is a requirement.

Gene Marks (13:35)

You know, you mentioned a few minutes ago about, you know, the government, you know, wanting to make sure that you've got the documentation that you also have. You are legally, you know, hiring legal people. So, you know, if a company were to get inspected or raided by ICE, by the way, we have a local company like, you know, outside of Philadelphia that had this big issue is in the news here and this a couple years ago, you know, the people that come in to do the inspection from, from ICE, for example, from Department of Immigration, they're one of the first things they're going to ask for is, well, show me your I-9s for all of your employees. That's one. But then you had mentioned about, they want to also make sure that you're hiring legal employees. Would they ask in an inspection or an audit, is there anything else that an employer would be asked to provide to make sure that they're complying with the law that we haven't discussed?

John Fay (14:29)

Yeah. So I mean, and you're right to create the distinction. So there really are a couple different, you know, I call them encounters that you might have with ICE or Immigration and Customs Enforcement. I think certainly the most common would be the Form I-9 inspection. And that's when they show up and they actually serve you with a Notice of Inspection. It's a templated letter. It is going to request for your I-9s, but it's also going to request for a lot of other corporate documentation, articles of incorporation. It's going to ask if you use E-Verify. It's going to ask if you use subcontractors, PEOs. I mean, they want to, they want to get a full picture of an employer's hiring situation. So, you know, there are a lot of different things that you might be requested. And then of course, to your point, you know, if they suspect that an organization is knowingly hiring workers or, you know, even harboring individuals, that's when we tend to see, you know, some of those really large enforcement actions where, you know, they have the riot gear, they're working with multiple government agencies, and those are the things that, you know, tend to make the news.

Gene Marks (15:38)

Still want to get to E-Verify. But before we leave this, tell me about, you know, to the most, to the extent that you can, what kind of, you know, fines you could an employer be looking at or, you know, or repercussions if they are found to be, you know, either willfully or, you know, unknowingly hiring undocumented immigrants?

John Fay (15:59)

Yeah, it's, you know, it's, it's a sliding scale. And the way, the way that the, the penalties are set up, employers can be fined. And this is just for I-9 violations. So, this is paperwork violations, it's an inflationary adjustment every year. But the latest fines are $288 to $2,861 per I-9 form. And the slide and scale part comes into play. So, let's say, for example, you have 50% of your I-9s, have one or more serious error on it. You're probably looking at about $2,000 per I-9 form in terms of penalty. And that can be. Gene, that can be. Even if you don't have any unauthorized workers, you could have entirely legal workforce, but you just didn't follow all of your, you didn't, you didn't do the I-9s on time, you made mistakes, that's really where a lot of employers get stuck. And then if you are employing or knowingly employing, you know, then it can be, you know, thousands and thousands of dollars per hire.

Gene Marks (16:57)

Yeah, that's a really, really good point that you made. I mean, you know, I mean, I have a lot of clients that they're not hiring, you know, you know, immigrants are documented or not. I mean, you know, they're hiring local people. They're not...neighbors, friends, whatever. But that doesn't mean anything, right? I mean, you need to have an I-9 for all of your employees. Just. That's a fact. And if you just. Even if they're completely legal and fine, if you haven't, if you don't have that paperwork on hand, you could be subject to fines. Am I, am I saying that correctly?

John Fay (17:26)

You are, you are. It's interesting. They basically, they care about the process, right? I mean, they want to make sure that organizations are following this very prescribed process. It's somewhat unique and it has a name. It's Employer Sanctions for Paperwork Violations. It's a, it's an acknowledgment that if you just don't follow the process, regardless of whether or not you have unauthorized workers, they will ding you because they want to make sure that you do follow the process, you know, for all your hires.

Gene Marks (17:54)

I keep saying when I get to E-Verify, but it's just because another question goes to getting back, you had also mentioned about like, you know, you need to see documentation that, you know an employee, you know, has legal right to work. And you went through some of the examples. Does the employer need to keep copies of that documentation or is just inspecting it good enough? Because keeping copies of people's driver's license, passports, you know, whatever, now you're starting to get into, you know, issues of privacy and, you know, record keeping and safeguarding, you know.

John Fay (18:23)

Yeah. So the short answer is no, you don't have to. Under the law it is optional, but we do see a lot of different practices. So, some organizations have decided to keep copies primarily because it does have one benefit. So if you're, let's say you're doing an internal audit and you notice a mistake, you forgot to write down a document number or an expiration date or something, now all of a sudden you have that document, you can easily make a correction, you don't have to go bother the employee. And I got even better benefit. Let's say the government then shows up and they audit your I-9s. And let's say you hadn't noticed the mistake. The fact that you have the document copy can actually help insulate you from a potential penalty on that I-9 Form. So that's a great benefit. But then we also have organizations that just, they can't do it. They can't do it consistently. They might have technology issues, they might have privacy issues like you said. And so there really is, you know, no one size fits all. But both options are available.

Gene Marks (19:19)

Okay, that's great. Finally, E-Verify. Talk to us about what E-Verify is and what it does.

John Fay (19:24)

Yeah. So it is an Internet-based system that's operated by the Department of Homeland Security in conjunction with Social Security Administration. And the basic, the idea of it is to confirm the work authorization or employment eligibility of newly hired employees and the whole idea behind it is it just fits in exactly. What we're talking about is to fill in the gaps in the I-9 process. Right here with the I-9 process, you're meeting with somebody, you're looking at documents. Are you a document expert? Probably not. Are these legitimate? The idea behind E-Verify is you take the data from your I-9 Form, you put it into the E-Verify system. It has all kinds of databases. It has the Social Security Administration, Department of Homeland Security, State Department, passport, DMV. It checks all that stuff, and then it tells you, is this person authorized to work? Is there a mismatch? Is it something we need to investigate, or. And then if that doesn't work out, sometimes it'll come back and say, this person is not authorized to work.

Gene Marks (20:20)

Can E-Verify be used in lieu of an I-9?

John Fay (20:23)

It cannot. No. It's technically, the way it's set up is it's a pilot program and actually has to be authorized every so often. And it is an extension of the Form I-9 process. So, employers, if they use E-Verify, they always still have to do the I-9.

Gene Marks (20:39)

Is there a cost to it?

John Fay (20:41)

The E-Verify system is free. Sometimes we joke it's free like a puppy in the sense that it requires some setup. Right? There are some transactional costs that can be associated with it. But then there's also a lot of employers are using electronic I-9 systems and such, which make that a little bit more seamless and take away some of those things.

Gene Marks (21:02)

How reliable is it?

John Fay (21:04)

So, you know, we like to say that it is probably the best tool that is out there to help confirm work authorization. They do have statistics out there that show that there are very few mismatches. It's something, you know, like 1% or so in terms of mismatches. The problem with E-Verify, and a lot of organizations will note this, is that it can't always detect certain types of identity theft. So, if I'm somebody and I grab someone else's valid Social Security number and I steal it, and then I get another ID and I make it look like myself, E-Verify might not be able to detect that. So it is not foolproof. But it is considered generally the best that we have out there.

Gene Marks (21:48)

And I'm assuming there's no... Again, back to the employee's point of view, there's no recourse as far as privacy. You know, you're looking up their information with the government. But that is. That's just. That's part of the deal of getting employment.

John Fay (22:02)

So, the the employer is supposed to, they have to have participation posters. The employee or the applicant in that case has to make, be made aware, you know, that this employer is using E-Verify. If there's a mismatch, the employer has a variety of steps they have to follow. They can't, they can't terminate the employee. They can't withhold pay, they can't withhold training. They have to let them follow through the process. So there are protections. But ultimately you're right. If the employer wants to use it, they can use it.

Gene Marks (22:31)

Okay. Okay. Do you know how long E-Verify has been around? I mean, is this like a... 20 years?

John Fay (22:36)

You know, yeah, it's been around for a while. So it was authorized way back in 1996. And then originally it was actually a telephone. You would call up and get a verification. But. yeah, now it's been around for. For quite some time. They boast about a little over a million organizations that are using it.

Gene Marks (22:55)

That's great. By the way. I kind of feel like the telephone would be more trusting to me than today's technology. You know, what you're getting when you look stuff up. Which brings you to my last question. So, you know, John, I mean, you've been, you've been involved in this world for a long time. I-9s have been around forever. I mean, since I've been, you know, I mean, relatively forever. Obviously, like you said, it's part of Reagan's administration. But E-Verify has been around for quite a long time. Where do you see this going? I mean, do you. Do you see a future changes of documentation? I mean, you know, you and I go through airports now and they do face recognition and they, you know, we go right through TSA. Do we see biometrics and other technology like this having an impact on the employer's ability to confirm that their employees, you know, do have legal documentation to work?

John Fay (23:48)

You know, I definitely, I wish I had the crystal ball. I know the, you know, the talk about biometrics is interesting because almost a decade ago, Congress was debating, you know, what to do about unlawful employment, better ways of ensuring that employers hire legal workforce. And it came up. And then, you know, interestingly, there were. There was a lot of concerns about, you know, having a national ID and whether or not that would violate people's rights. And then all of a sudden you'd have this one ID that would be able to identify you. And that, you know, that made certain people uncomfortable, as well. You know, what I see is I can certainly see E-Verify definitely seems to be growing. It seems like there's a lot of more reliance on it. I could see a lot being done to help perhaps reduce the list of acceptable documents to help prevent fraud. I could see that going in that direction. And then I think, you know, recently, you know, we've now seen, you know, I-9s, you know, E-Verify participants can actually be completed virtually, even remotely, without an in-person type of meeting. So we might see more of that as remote work has really taken off. So, it's funny because, you know, I-9 has been around, like you said, for so many years, but it is always changing.

Gene Marks (25:05)

We talked about I-9s. We talked about E-Verify. We've talked about fines and penalties. We talked about documentation. We've talked about the current environment and the importance of revisiting this documentation and being on guard. Before I let you go, anything else that any other advice that you have that you're giving to your own customers about making sure that we're in compliance in these different kinds of days of immigration?

John Fay (25:26)

Yeah, just to stay on top of all of these different changes and make sure that you have a process in place. Right? I mean, there are a variety different ways of doing this. Certainly if you're a small organization, you know, you can look to have a trusted resource. I mean now that I-9s, you know, can be completed virtually and remotely, a lot of organizations are using, you know, outsourcing that responsibility that can be, you know, one particular method or you can, you know, invest in doing more training. Right? I mean, that's always one of the top things we always recommend with I-9 to make sure that you're keeping up to date with all of these types of things.

Gene Marks (26:09)

John Fay is the Director of Product Strategy at Equifax Workforce Solutions. We've been talking about immigration and compliance. John, great information. Thank you so much for coming on. I know our listeners will really take away a lot of value from this conversation. So, we appreciate your time.

John Fay (26:25)

Thank you very much. Appreciate it.

Gene Marks (26:26)

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/ThriveTopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR, payroll, benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W O R X Paychex can help manage those complexities while you focus on all the ways you want your business business to thrive. I'm your host, Gene Marks, and thanks for joining us. Till next time, take care.

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