Introduction
Being compliant when it comes to payroll is a complex and ongoing process for every business owner. With so many forms and due diligence measures required, it seems like as soon as one form is complete, another one appears. One of the first forms required to be filled out by new hires is Form I-9 which we will be discussing in this article.
What is Form I-9?
Form I-9 is also known as the Employment Eligibility Verification form because it is required to verify the identity and eligibility of a potential employee. This form is needed for every new employee that is added to payroll. There are two different sections on Form I-9, with the first section needing to be completed by the employee on the first day they are hired, and the second section needing to be filled out by the employer within three business days of the hire date.
What are the Sections?
As mentioned previously, there are two sections and two supplemental sections if applicable. Section 1 is filled out by the employee and includes identification information such as:
- Full name
- Date of birth
- Social security number
- Citizenship status
- Work authorization status (U.S citizen, lawful permanent resident, alien authorized to work, etc.)
- Contact information such as email and phone number
- Address
The employee then signs to confirm the accuracy of the information provided. Any missing or invalid information could result in a violation.
Section 2 is filled out by the employer. The employer is required to examine the information from Section 1 to make sure it is realistic and completely filled out. They then enter in the employer information such as the authorized representative who looked over the document, the name of the organization, the address of the organization, and first date of employment.
Supplement A is used if there was a preparer or translator used for Section 1. In this section, whoever filled out the form on behalf of the employee would fill out their information. Supplement B is used for reverification and rehires. This would typically be done if there was a legal name change for an employee, the employee requires reverification, or if the employee was rehired within three years of when Form I-9 was filled out originally for the rehired employee.
Verification Documents
When an employee is done filling out the I-9, the employer is required to get certain documents from them to verify their identity. Any documents provided must be in good standing and not expired. There are three different lists of potential documents that can be provided to prove identity. The employee can either provide one item from List A or provide an item from List B and an item from List C. A full list of acceptable items can be found here(1).
As an example, an employee could either provide a U.S Passport, which is in List A, or the employee could provide both a driver’s license (in List B) and U.S. Social Security Card (in List C). You would not be able to provide two items from List B to avoid having to provide something from List C and vice versa.
Penalties for Non-Compliance
Form I-9s are very important to fill out as there can be severe punishments if you are found to be out of compliance. The current administration has been cracking down on violations more harshly than before. Currently, the fees and penalties can be between $288 to $2,861(2) per form for first time paperwork violations. For knowingly hiring someone out of compliance with I-9, the minimum fine starts at $716 and goes up to $28,619 if you are a repeat offender getting the maximum fine.
Conclusion
While Form I-9 is not overly complicated, it is still an incredibly important form to be filled out to avoid heavy fines and penalties. Ensuring everything is filled out correctly is an important onboarding step for your new employees. For any help making sure that you and your employees are filling this form out correctly, reach out to Volpe Consulting & Accounting!
If there’s a pain point within your operation that you’d like to discuss, we’re here. We’d appreciate the opportunity to look into it with you and hopefully provide some insight as to how you can move forward. For more information, or to just put a few faces to the name,
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