On the heels of several years of increasingly strict employment eligibility verification enforcement, the government recently decided to increase fines for future Form I-9 violations, making it more imperative than ever that employers ensure hiring processes are compliant.
Businesses have been facing high penalties as it is for Form I-9 violations and similar errors. A Washington apple orchard, Broetje Orchards LLC, agreed to $2.25 million in civil penalties in early June, after an Immigration and Customs Enforcement audit found nearly 950 employees not authorized to work in the U.S. And a month prior, a Minnesota staffing company, Golden Employment Group Inc., was fined nearly $210,000 following allegations of over 500 Form I-9 violations. When it comes to Form I-9 violations, penalties that reach hundreds of thousands of dollars are not rare. And that's with the current penalty rates. Fines will only grow in the coming months, Law360 reported.
Some penalties nearly twice as high as they were
Starting August 1, penalties for Form I-9 infractions will increase. There are two types of violations that will be punished more harshly come August: employment of individuals who are not authorized to work in the U.S. and Form I-9 paperwork errors. The adjustment, which came about in response to inflation, will see fines go up anywhere between 35 percent and 96 percent, depending on the infraction. While the increases for knowingly employing unauthorized individuals will be smaller than they are for Form I-9 violations, they will still be significant. These penalties will grow as follows:
- First offender fines ranged between $375 and $3,200 per individual.
- Now they will extend from $539 to $4,313.
- Repeat offender fines were previously between $4,300 and $16,000.
- They may now be anywhere from $6,469 to $21,563.
The penalties form Form I-9 paperwork violations will go up by even more. Here is what those increases will look like:
- Previously, paperwork violations led to fines between $110 and $1,100.
- Now the penalties will range from $216 to $2,156 per infraction.
Employers of all sizes face huge fines
This means that even small or mid-size employers - who often see their penalties reduced as a result of their abilities to pay, in addition to other factors such as good faith - will see much larger fines. As for businesses that previously saw fines such as the one levied against Golden Employment Group, penalties could begin creeping toward the $1 million mark. For example, the $605,250 fine Hartmann Studios Inc. agreed to in 2015 would surpass the $1 million threshold under the increased penalty guidance.
It's bad enough that fines are substantially increasing, but there are signs that ICE could start doubling down on already extensive efforts to audit employers' Form I-9s. Law practice Haynes and Boone LLP explained the reason behind this thinking. In recent years both penalties and Form I-9 audit rates have been on a downturn. There were over 3,000 audits in 2013 and 1,320 in 2014. In 2015, the number of audits tumbled to just 435. Through the same span, fine totals dropped from $9.5 million in 2013 to $4.62 million in 2015. However, penalties are now trending upward. If the relationship between fine amount and the number of audits remains direct, one can reasonably expect ICE to conduct more audits from August on.
Come August, it will be even more important for employers to ensure their Form I-9 procedures are compliant. With each paperwork infraction now twice as costly for employers, it's now twice as crucial to make sure Form I-9s contain no violations and all new hires are authorized to work in the U.S.