The staffing industry plays a critical role in finding placements for individuals within client companies. While some staffing firms may offer some full-time and permanent placement opportunities, most of their placements are more temporary in nature. Whatever the nature of the placement, one thing remains the same—staffing firms must ensure that a Form I-9 is completed for employees to ensure compliance with the regulations put forth by the federal government.

Staffing Industry Enjoying a Business Boom

Recent trends seen by staffing companies across the nation are showing that the industry remains strong and should be preparing for another productive season ahead. One of the most prevalent trends is people seeking remote work opportunities, often in the form of freelance or contract opportunities. Some individuals may be pursuing a part-time job to supplement a job they already have.

Those positioned to do hiring and placement within staffing companies should be prepared because a busy year translates to a need for a solid understanding of and diligence in handling a steady stream of I-9 forms to achieve compliance.


How Companies in the Staffing Industry Can Handle Form I-9 Completion

Just like every other business in the United States, staffing firms are also required to complete a Form I-9 for every individual they hire.

There are two important employment dates for individuals working with a staffing firm to observe:

  1. The day a person joins the assignment pool for the staffing firm
  2. The day the person is assigned a job

In many cases, the staffing firm can choose which date they prefer to work with for I-9 purposes, but to meet compliance standards they must continuously use the same form of measurement. This means they must use one of the two aforementioned dates, and then use it continuously moving forward for every employee’s completed Form I-9. The same type of date used for an employee’s Form I-9 should also be used for their E-Verify case, when applicable. Failure to do so could result in noncompliance if they are officially audited by a government agency.

Consequences of Noncompliance in the Staffing Industry

Because all United States businesses are required to complete Form I-9s for their employees, U.S. staffing firms are no exception to the rule. Government agencies such as the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) perform official audits of companies, and it is possible for a staffing firm to be one of them.

In 2022, a landmark case (United States v. R&SL, Inc.) involving a staffing firm resulted in the company being liable for an estimated 1,400 plus Form I-9 violations that resulted in an assigned penalty of roughly $1.5 million. Some of the top compliance issues found were the firm’s inability to show a person was authorized to work in the U.S., failure to prepare or present all Form I-9s, failure to meet some Form I-9 deadlines, as well as a host of other common form mistakes, such as:

  • Missing pages
  • Blank pages or fields
  • Missing reverifications
  • Invalid or missing List A, B, and/or C documents
  • Incomplete expiration dates or document numbers

When audited, a company will receive violations per employee, not per overall category of mistake. This means that if a staffing firm were to make the same compliance mistake on every form they handle, it could result in multiple violations and heavy punitive fines. In the end, the accrual of such violations and subsequent penalties could be enough to force a company to ultimately close their doors.

Top Compliance Challenges for the Staffing Industry

Most temporary placements by the staffing industry are to simply fill a short-term work assignment for a company that:

  • had an employee vacate that position briefly due to a medical absence or maternity leave
  • has a small-scale project that requires only a limited window of time
  • has an increase in demand of their services or supplies that cannot be met by regular employees alone

This type of arrangement means that the majority of hires a staffing company makes are not permanent, which could result in multiple temporary placements of one individual at different companies over the course of a year. Multiple placements in various companies for just one person throughout a twelve-month period essentially creates a high turnover rate, which can wreak havoc on Form I-9 compliance for those without a good I-9 intelligence tool like digital compliance software.

Another substantial challenge for staffing firms is the proper storage of Form I-9s. Because these firms are finding placement for hundreds if not thousands of individuals over the course of a year, they are then tasked with storing the forms in a manner that meets federal compliance standards.

While these challenges can feel unique to the staffing industry due to the volume of forms they handle annually, digital I-9 software can be a welcome resource for helping these companies achieve or maintain compliance.

Digital I-9 compliance software is designed to help users achieve and maintain compliance with federal law while streamlining the work it takes to do so. The software is designed to be user-friendly, reduce the incidence of human error, assist with documentation, and provide alerts for looming deadlines.  Comprehensively, the software can be a highly effective tool in helping staffing firms with compliance without extensively adding to their workload.

Those tasked with hiring personnel for U.S. staffing firms should take I-9 compliance seriously because the future of the company could depend on it.