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Payroll CPA discusses Form I-9, Employment Eligibility Verification

payroll cpa in Wilmington NC discusses Form I-9

Gary Bode, CPA: We offer training and ongoing payroll support to small companies. For a free phone consult, please call (910) 399-2705.

Form I-9 requires an employer to verify an employee’s federal employment eligibility. What a mouthful! But as a payroll CPA, I see employers ignoring Form I-9. It can seem trivial, since it doesn’t get filed with any governmental agency. It isn’t even an IRS form! But recent immigration laws give it a higher profile, as part of the ongoing illegal alien issue. Though unlikely to be inspected, non-compliance can incur large financial penalties and even jail time. Employers should keep Form I-9 on file for at least three years, or one year post-employment, whichever is later. The Department of Homeland Security can inspect Form I-9 with three days notice, but they don’t have the right to check the employee personnel files without a warrant.

Form I-9 is required for:

  • All employees to work in the United States regardless of age.
  • Employees hired to work at least a part of one day.
  • Agricultural recruiters and referrers.

Form I-9 is NOT required for:

  • Continuously employed employees, hired before November 7, 1986.
  • Folks performing domestic service in a private home that is sporadic, irregular, or intermittent.
  • Independent contractors.
  • Temp agencies.

Section 1

New employees complete Section 1 no later than the first day of work. Make it part of the hiring process. The employee provides their name, address, date of birth and Social Security number. The employee asserts one of three classifications:

  • US citizen.
  • Lawful permanent resident.
  • Alien authorized to work in the United States.

Don’t forget to have the employee sign and date. If a translator was needed, the translator has to sign, too.

Section 2

I suggest completing Section 2 before or on the first day of work. But the law allows you three business days. The employer inspects and then lists the documents provided by the employee. Keeping copies of employee documents is prudent. If an employee stalls or won’t comply, they should be terminated immediately to avoid penalties for knowingly employing a non-eligible employee.

Section 3

Use this for re-verifying an employee’s eligibility. But I would probably just complete another Form I-9.

Employers should read USCIS (US Citizenship and Immigration Services) Form M-274, Handbook for Employers for all the requirements including:

  • Special rules for employees under 18 years old.
  • Special rules for handicapped employees.


USCIS has a free online program to help employers verify the work status of new hires. The sign-up seems cumbersome, but it has a good customer satisfaction level.

We’re a CPA firm that provides payroll services. But we try to make your company payroll self-sufficient through training and ongoing support. We offer a free phone consult, just call (910) 399-2705.

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