The federal Form I-9 seems like a simple, one-page form, but it causes confusion for many large and small employers alike. Keeping up with the data, checking for errors, interfacing with government check services, identifying forms that need to be updated have all been labor intensive tasks until the recent emergence of I-9 compliance software. One of the first solutions is a rules-based system developed by Lookout Services Inc. of Houston, Texas.
Developed by Elaine Morley, an immigration lawyer with Morley & Morley, the Lookout system offers a comprehensive Web-based solution suitable for small businesses up to the largest employers in the country. Many companies with multiple locations are especially interested in the software because it can consolidate records in one, paperless system. Lookout’s solution has been used to process more than two million I-9s from over 5,000 locations.
The system allows companies to complete forms, upload and check data against the federal government’s Basic Pilot program, run management reports about I-9 compliance, identify forms that need updating, and a number of other functions involved in the process.
Morley described Lookout’s solution as the highest level of I-9 compliance available. Some other systems on the market are mainly form completion or HR tools. What makes Lookout’s software stands out is the extensive immigration law intelligence built into the system. Morley said, “What we have is an extensive rules based system. “We provide the assurance that our system will prevent a number of I-9 compliance mistakes.”
The system does not allow anything that should be filled out to be left blank. It also does more difficult things like identify errors in forms and offer guidance how the problems can be fixed. Lookout’s software helps recognize errant or redundant social security numbers within the same company, identifies workplace documents that do not jive with the citizenship status identified by the applicant, ensures that the proper combination of both identity and workplace eligibility documents are used, and alerts a company when work authorization is about to expire for an employee. Companies are notified about potential problems by running reports or receiving email alerts that can be set up to run automatically.
Reduce Document Fraud & Identity Theft
The system guides the employer representative in making judgments about employment authorization documents. Pop-up sample documents and descriptions are available as documents are selected. Tables provide codes required on specific documents to validate their authenticity.
Lookout’s software automatically and seamlessly interfaces with the Basic Pilot/SAVE Program. This allows a company to verify SSN/Name matches, that the citizenship status is correct, and that the person is eligible for work.
It also automatically and seamlessly compares new hire information against the Office of Foreign Assets Control (OFAC) Blocked Persons List for names of individuals not permitted to work for US employers. This helps make sure that a company does not hire anyone known for terrorism or other illegal
activity.
Any new changes to the law or verification processes are automatically updated to the system so that companies don’t have to become experts at I-9 compliance issues. Morley said that in one case a customer reduced calls on immigration issues to its corporate attorney by 99%.
Companies are not required to check worker status via the Basic Pilot program. But using it does provide help to improve compliance. David Adams, sales manager for Lookout Services, said, “I am starting to recommend Basic Pilot more and more. Whatever the government might say, it is defacto a safe harbor. The government is not going to come audit one of the companies using Pilot unless they are a flat out law breaker. The federal government wants companies to use Basic Pilot.”
A recent government raid of Swift & Co., a meat packer, raised questions about the protection afforded by Basic Pilot involvement. The U.S. Immigration and Customs Enforcement (ICE) raided meat plants in six states resulting in nearly 1,300 arrests making it even larger than the IFCO raid in 2006.
Swift had participated in Basic Pilot, but there seem to be concerns that the meat packer knew many employees were not who they said that they were.
Department of Homeland Security Secretary, Michael Chertoff, said, “As we’ve said, if you enter into Basic Pilot and you do it in good faith, that will protect you against criminal and civil liability. Now, I emphasize ‘good faith.’ Obviously, if you enter into Basic Pilot and then you deliberately evade it, that’s a different story.”
Chertoff said the program mainly weeds out phony names and Social Security numbers. He explained that it was not a magic bullet for every kind of problem. It won’t work in the case of identity theft when a new hire has fake documentation with legitimate information. For example, the program does not identify multiple uses of the same Social Security number.
Chertoff said, “If we could get permission from Congress to have the Social Security Administration identify multiple appearances of the same identification, it would help us do our job.”
When it comes to the OFAC check, there are different legal opinions about whether or not it is required. OFAC use was mandated by executive order not legislation. Morley suggested that companies consider OFAC checks on new hires because the fines for hiring someone on the list are in the $100,000 range.
Recent changes in the federal regulations allow for new methods of storage and electronic signature. Lookout Services has engineered these changes into its software. Consistent with federal standards, Lookout’s system offers several ways to capture and store electronic signatures and forms including a “Click to Accept” dialog box, personal identification numbers, or an electronic signature pad. Employers may continue to complete I-9 forms on paper or go completely electronic. These new electronic systems give companies a choice.
Training & HR Management
Lookout’s software integrates with most major corporate hiring and HR tools. Full import and export capabilities allow users to easily move data back and forth between existing legacy software. Lookout engineers can even design custom interfaces for any application. In many cases, I-9 fields can be pre-populated from information submitted when a new hire applied for a job.
The system self-trains employer representatives to complete the I-9 Form correctly while learning at the same time. No additional I-9 compliance training is needed. The system’s tips, alerts, and instant audit capabilities educate the employer representatives as they complete the form. It eliminates the time and money needed for error checking forms.
Providing the data necessary for a government audit or major company event, such as a merger or acquisition, is easy according to Adams. Batch processes for handling terminations and transfers provide additional efficiencies. Historical I-9s can be added and stored electronically by keying them in to
become smart forms and be audited by the system. Lookout Services offers scanning and legacy document services for clients that want to move all their documents onto the system.
Electronic storage options can provide a backup in case paper files are lost due to a fire or other accidental event. Copies of the actual identity and work authorization documents can be scanned and attached to individual I-9s using the system.
Morley commented how one customer lost about 40,000 paper I-9s during a recent hurricane. With centralized electronic storage and hierarchal branch identification, the lost I-9s were just reprinted.
Lookout’s I-9 system tracks all incurable errors, like missing the 3-day deadline for completing I-9 section 2, and the system provides standard reports which list all errors that could result in fines by the company’s hierarchical organizational structure. Access to this reporting system is controlled by a security structure that matches the company’s organizational security structure. The reporting system allows the appropriate level of access based on job responsibility throughout the organization. Everyone involved in oversight can be looking at the same document at the same time.
Most companies use the Lookout solution via the Web. However, it can be customized and installed on a company’s own internal network. This service costs more and has a different pricing model than the basic Web-based system. Adams said that Lookout Services can develop a program tailored to the needs of clients. He added that Lookout would not be undersold. Costs for things like document storage and customization are negotiable. Adams estimated that it cost somewhere between $2-4 per employee per year for companies with at least 100 employees. He laughed, “It will cost less than a trip to Starbucks per hire.”
Given the costs associated with an ICE audit, paying a third party company like Lookout Service can be a good investment. This is especially true for companies with multiple locations that hire immigrant workers or are in targeted industries, such as the pallet business.
Keeping Up With Changes
Lookout monitors changes in immigration law on the state and federal level to ensure that its system is up-to-date on the latest requirements. A number of states have considered some changes to what the federal government requires when it comes to worker authorization.
Most notably, Colorado has passed a law requiring all employers starting this month to store copies of the identity and work authorization documents provided by new employees during the hiring process. Colorado state officials can then require employers to show these documents in addition to the I-9s.
The new Colorado law goes beyond the existing federal requirements, which puts this law in legal jeopardy. It could be overturned by the courts. Until that happens, the stricter requirement is the law in Colorado.
Morley said, “I think we could see more and more states moving in that direction until they are told that they can’t.” Federal law does not require that a company store the documents presented by a new hire as part of the I-9 process. Legal experts disagree as to what is the best practice. Some claim that companies should keep copies on hand to show that documents indeed appeared legitimate even if workers are later found to be illegal workers. Others say that any paper trail you keep could give the government ammunition against you in case of an audit. It all depends on your practices and corporate attitude.
System Features
• Produce compliant I-9s the first time through a rules-based system designed by a leading immigration attorney.
• Web-based system designed for both small and large companies.
• Tracks document expiration dates and pro-actively and automatically sends email alerts to multiple personnel to ensure follow-up actions.
• Available languages: English, Spanish and Polish.
• Prohibits use of duplicate SSN and alien admission numbers within a company.
• Assists document validation with sample documents to reduce fraud.
• Seamless interface with Basic Pilot/Save Program.
• Seamless interface with OFAC (Terrorist) List.
• Reduces time to complete compliant I-9s.
• Reduces cost of redundant I-9 compliance checking.
• Self-trains while productive work is completed.
• Streamlines work flow by interfacing with other HR applications.
• Provides batch processes to handle terminations and transfers.
• Allows for easy disaster recovery and quick audits of historical I-9s.
• Provides paperless solution with electronic signature.
• Managements reports to identify any compliance programs.
• Tracks curable & incurable errors on each I-9 to indicate level of risk.
Dealing with Government Raids
The U.S. Immigration & Customs Enforcement is the largest investigative branch within the Department of Homeland Security. It is tasked with monitoring compliance with immigration and workplace laws.
Morley said, “When ICE decides to audit a company what they typically do is go to the Social Security Administration and ask for the company’s payroll records for a period of time. Then they show up at the company’s door, ask for its I-9s and check to see any problems.”
If your company is raided by federal agents, negative media coverage could be both embarrassing and harmful to your business. Should your Company be audited, you should be prepared to spend a substantial amount of time and effort to retrieve your I-9 records that will be needed to comply with the request. Often companies have to produce three years worth of I-9s. In addition, your company could face a fine due to substantive or procedural violations of law found on your I-9 forms. Having a solution in place like the Lookout Services software could help save you time, money and public embarrassment if ICE decides to audit your company.
Morley said, “Our system may not reduce the likelihood that a company gets audited. But it certainly would reduce the amount of fines a company would likely pay if it were audited.”
ICE targets companies with a large percentage of immigrant workers, high turnover, large numbers of employees, and large percentage of mismatched names. If you happen to be in an industry known for poor I-9 compliance, you could be targeted too. Given what happened last year to IFCO Systems, the pallet industry should consider itself on ICE’s target list.
In order to be ready in case of an ICE audit, a company should have the ability to easily access historical I-9s over the past three years and have records in as good shape as possible. The best way to do this is to have an electronic system that identifies curable errors as they occur, keeps track of expiration dates for all employee documents, and provides management the information it needs to deal with problems before ICE visits.
Changing I-9 Compliance Landscape
As far as the change in Congress meaning any shift in labor policy, Adams predicted that comprehensive immigration reform remains a long shot. There is grassroots activity on the state and local level to bring about immigration reform. The Senate is likely to introduce comprehensive legislation. But the House of Reprentatives may not be any closer to passing it. Many of the Democrats who were elected are as conservative as the Republicans when it comes to anything that looks remotely like an amnesty or earned immigration program. Morley said, “If there is some sort of earned legalization or temporary worker program, these will only come with increased enforcement and possibly phasing in the basic pilot program for all new hires and eventually for all employees.”
Adams identified that any comprehensive bill might possibly include a provision that would require all employers to begin using the government’s Basic Pilot program to check all new hires.
One thing that may be hard to push through would be new, more tamper proof forms of identification. Morley said, “There is neither the political will nor financial ability to create new documents or streamline what documents are available. This is especially true for the whole country.”
Companies that want to see for themselves can test Lookout Services’ software by visiting www.lookoutservices.net or calling 888/522-6704. The Web site includes more information on the product and a free demo presentation.
