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When A Company Faces Bankruptcy For Failure To Be I-9 Compliant

Employers are required to verify that all new hires have employment authorization and can prove their identity, but at the same time, they are not allowed to require more or different documents than those deemed acceptable by the regulations. Failure to comply with the requirements can lead to civil as well as criminal charges.

A unit of the Department of Homeland Security, Homeland Security Investigations (HIS) conducts audits of companies to ascertain compliance or violation of the I-9 requirements. Our client contacted us when informed that HIS was investigating other business near their location, and as these other businesses were in the same industry type as the client, the client was concerned that they may also soon be targeted for a surprise audit.

During our audit we found numerous material deficiencies that could have cost the company thousands in fines. The possible minimum fine that could have been assessed against the company would have been enough to force them into bankruptcy proceedings and the closure of the entire enterprise.

The employer had been in operation for about 5 years, but had no formal HR process in place for onboarding if new employees. We helped educate and train the company's Human Resources employees and upper management on the procedures for proper completion and retention of I-9 forms and we assisted the company in preparing clarifying amendments of their hiring and onboarding processes.  We conducted training of Human Resources staff involved in onboarding about the problem of collection of proper supporting documents for form I-9 and provided resources for staff to use if there were questions about documentation that new hires presented.  We checked back with the client one year later and revised the I-9 forms for the new hires they had hired since the audit and were pleased to see that all processes we established were being diligently followed.