What most small business owners do not know about I-9 compliance will hurt them; likely in the form of substantial civil penalties. However, for those few business owners who are deemed to have knowledge that they are continuing to employ someone who is not authorized to work in the U.S. or have hired someone who is not authorized to work in the U.S., the penalty can be a criminal indictment. The form of the criminal charges varies from False Statement charges to Mail Fraud and Wire Fraud up t and including RICO charges (yes like the mob bosses).
The administrative penalties for substantive and uncorrected technical violations range from $110 to $1,100 per violation. On the other hand a criminal fine can range from $375 to $16,000. So if your business employs 50 people and each I-9 contains a de minimis violation that is left uncorrected, then you can probably be weigh the cost at about $5,500 to settle with ICE.
I've recently done a series of I-9 self audits. Every single company has had multiple substantive violations that could impute knowledge on the business owner that he/she was continuing to employ unauthorized workers. Almost every single I-9 I've come across has contained at least one technical violation. This is not an indictment on the small business owner's lack of knowledge. Some of the largest companies in the country have been hit with inspections and have been fined; including Wal-Mart and Abercrombie.
Now in North Carolina, HB 36 mandates the use of the federal E-Verify system for employers with more than 25 employees. Not only do North Carolina employers have to maintain I-9 compliance or face federal issues, but if they don't use the E-Verify system, they now face state based penalties.
This is the wave of the future. In most cases, it is the dream of foreign nationals to come to the U.S. for employment and to build a better life for themselves and their families. This is a primary avenue of enforcement for DHS. If they can cut off employment opportunities then they hope to stem the flow of people who are violating the immigration laws. For the states that inact the type of legislation as North Carolina did, they think they are protecting their residents. Whether or not they are is unknown and whether or not the state law is constitutional is another discussion.
My best advice is to create a culture of compliance within your company. It is a critical first step. Briefly, by performing a self-audit before ICE gets involved in your backyard, creates the beginning of a "good faith" argument that you are self-policing. Then establish a written hiring and employment eligibility verification program. Finally train your staff on compliance and outsource to an immigration law firm to handle annual audits. Again, that is a very brief overview of the beginning of a culture of I-9 and work authorization compliance.
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