New I-9 Penalties Raise Stakes for Restaurants

One of the biggest challenges facing restaurant operators is finding reliable employees. Perhaps it is not a new issue, but it is one of the most common complaints I hear from nearly every type of restaurant. With that challenge, managers are often presented with the quandary of whether or not they should hire undocumented workers and risk the consequences of doing so.

Needless to say, hiring undocumented workers is illegal and should not be considered a viable solution to the problem of finding employees. Even restaurants that attempt to comply with the law, however, can expose themselves to liability on this issue if they are not careful. And under new Department of Justice regulations, that liability just increased significantly.

All employers must complete a Form I-9 for newly hired employees within three days of employment. The purpose of the form is to verify the employee is eligible and authorized to work in the United States. Among other things, the requirements include physically inspecting the employee’s original documents, completing the form properly, and using the correct and most updated form.

Recently, the DOJ issued new rules that increase the fines for violations attributed to the seemingly insignificant task of incorrectly completing the form (as well as the knowing or unknowing hiring of an illegal alien). The rules, which took effect August 1, 2016, increase the minimum fine for a first Form I-9 violation from $110 to $216, and the maximum fine from $1,100 to $2,156. Fines continue to increase for second and third violations. The fine for unlawfully employing an alien, meanwhile, has increased to $530 minimum fee, and maximum fine of $4,313 for a first offense.

If a company is audited, these violations and fines can add up quickly and result in costly penalties. A complete list of fines can be found on the Federal Register.

The civil monetary fines imposed on the employer are not the extent of it; criminal penalties including jail time for knowing violations and engaging in a pattern or practice violations can also be assessed.

The new fines and regulations mean employers should be more diligent with their administrative forms and as always, seek alternatives prior to hiring an employee who is not documented.