PEO and the I-9 Form
The full weight of that alphabet soup of federal agencies came down on a California company on July 8, 2015 – to the tune of $605,250. The Office of the Chief Administrative Hearing Officer (OCAHO) and Immigration and Customs Enforcement (ICE) audited the I-9 Forms of an event planning business and found 800 paperwork violations. The business’ only defense was that it left the completion of I-9 Forms to its union which, it turned out, used a non-compliant form. This incident raises questions of accountability in Business-PEO relationships.
I-9 Form
The properly compliant I-9 Form asserts an employee’s right to work in the U.S. The form requires proof of identity from U.S. citizens and proof of right-to-work from immigrants. It has three sections and must be completed in person by the employee together with the employer representative. Signatures and copies of the proof are necessary. The third section is a convenience when rehiring a previously certified worker. And, the completed form must be retained throughout the worker’s employment.
Forms must be retained for three years after the employee begins or one year after the employment ends - whichever is longer. Retaining forms longer than necessary exposes the business to some vulnerability on audit, as does the failure to update forms to be sure right-to-work is current.
As reported by SHRM, “’This case demonstrates the need for employers to conduct routine self-audits of their I-9 inventories to ensure that the forms have been properly completed and retained and are ready for inspection,’ said Mary Pivec, a partner in the Washington, D.C., office of Ford Harrison.”
E-Verify
E-Verify lets a business verify an employee’s right-to-work online. It is a fast and convenient verification of the information obtained on the I-9. E-verify is required for Federal contracts. While not required for other business, it can be a best practice discipline because it supports your data.
Verification and the PEO
This burden of detail, administration, and accountability exists, too, in client business-PEO relationships. The U.S. Citizen and Immigration Services instructs, “While both the client company and the PEO are accountable for ensuring that they comply with Form I-9 and E-Verify rules, they may choose an enrollment that best suits their needs.
The business must ensure that either they or the PEO enroll and verify employees in E-Verify where contracts require.The client business can enroll in E-Verify as an Employer and designate itself as a Federal contractor with the FAR E-Verify clause to verify its employees.The PEO must register in E-Verify as an Employer Agent to be able to perform E-Verify queries on behalf of a client company. Both the business and the PEO are accountable for ensuring that they comply with Form I-9 and E-Verify rules, because both the client company and the PEO sign a memorandum of understanding.
Accountability
The PEO is in the business of advising client companies on compliance. But, that does not relieve the client of accountability with regard to the I-9. Questions of accountability in Business-PEO relationships are easily solved at the start of the relationship, but best practice assumes the client business remains aware of and current on compliance.
