The Importance Of I-9 Compliance


Recently, a lot has changed about how we look at certain functions within our business. For a long time many franchisees have not been concerned about employee files or about maintaining I-9s for every employee. Now we have come under a magnifying glass from ICE (Immigration and Customs Enforcement), the Department of Justice, and Homeland Security due to the actions of some franchisees in Long Island and Virginia. We are aware that the Justice Department has closed some stores and issued subpoenas to many franchisees on the East Coast to check their employee records.

SEI has also come under harsh criticism and review by these government agencies, and more recently franchisees were notified by SEI that they were going to come into our stores to review our I-9s and make sure all of our employees are well documented. At the time it was a bit of a shock for everyone, and there was a lot of conversation within the franchisee community about the validity of the request or whether it should even be allowed based on our Franchise Agreement.

During this time the National Coalition and many FOAs sought legal consultations and we spent a lot of time communicating with SEI. After much debate and consideration, given the gravity of the situation with ICE and Homeland Security, and the importance of our image among consumers, we concluded we should cooperate with SEI’s I-9 review request, but only with a clear process in place. We requested that SEI look at current employees only, nothing be done in secret, the review would take place in the presence of the franchisee, no documents would be removed from the store, no copies of any documents would be made, and there would be no employee interviews.

At the time, the National Coalition issued a statement and we made sure we educated all of our peers and local leadership on the review process so they could educate their local stores. Once the I-9 reviews started on July 1, we verified with the stores that were reviewed that the process was indeed being done correctly. Like any big project, there were some incidents where the process wasn’t followed as outlined, but they were corrected immediately upon coming to our attention and the National Coalition having a conversation with SEI.

Since the I-9 review weighed heavily on the minds of all franchisees, the National Coalition invited Robert Haws from Gust Rosenfeld P.L.C. to the July Board meeting to educate us on the process. He discussed the law governing the I-9 form and made sure we were compliant with all of the requirements of hiring an employee so that we won’t have any surprises moving forward.

So what should franchisees do now? The investigation is ongoing. I urge everyone not to take the I-9 situation lightly. If you haven’t filled out I-9s in the past, fill them out now to save yourself headaches later. Use the current date and be compliant from now on. We all know that on the ISP we have a detailed hiring package. Within that kit, there’s detailed information on filling out the I-9 form and what the requirements are. Franchisees should go through that kit step-by-step and make sure that all documents are in order. Some other points you should follow:
• Don’t accept expired documents.
• Leave the original I-9s in the store in which the employee was hired.
• Retain the I-9 for as long as the individual works for you.
• Be consistent—you should have one policy for everyone. If you make copies of IDs and other documents for one employee, you have to make copies for all your employees.
• Do not make multiple copies of I-9s for each store if the employee happens to work at more than one store. His/her employment file should be only at the store where hired.

Also, you should be aware that there are penalties for hiring unauthorized aliens, some of them quite severe. The first offense is a fine of $375 to $3,200 for each unauthorized alien. The second offense is a $3,200 to $6,500 fine for each unauthorized alien. Subsequent offenses are $4,300 to $16,000 for each unauthorized alien. If you fail to properly complete, retain and/or make available for inspection your I-9s as required by law, you may face civil money penalties of $110 to $1,100 for each violation. If you knowingly hire or continue to employ unauthorized aliens, you may face fines of up to $3,000 per employee and/or six months imprisonment.

Robert Haws recommends that we use E-Verify, which is a great free tool from the federal government that provides an automated link to federal databases to help employers confirm the employment auth- orization of new hires, and it’s free. E-Verify helps protect us against fake documents, but again, if you use it for one employee you have to use it for all.

Depending on the outcome of the current government investigations, there could be more subpoenas coming. In light of all of these events, I want to go on record and state that in my fourteen years as a franchisee, the vast majority of franchisees I’ve met are law abiding, honest and upstanding business people. We need to be more vocal about all of the good things we do within our communities and how we’ve become a part of the national fabric as far helping to grow the national economy. We are hard working people who set out every day to honestly earn the money we make. We can’t allow a few dishonest franchisees to ruin our reputation, and that of our brand.

Please call me at 209-481-7445 if you have questions about this topic.