Employers are required to complete I-9s for their employees, but not for people considered to be independent contractors. This appears straight forward enough, but things can quickly get complicated since simply calling someone an independent contractor does not necessarily make them an independent contractor. The definition of an independent contractor depends on many factors centered on how independent the worker really is. For example, can the worker set his/her own hours and work methods, do they bring their own equipment or tools, do they work for others also, etc. These are just some of the factors to consider, and they may sound familiar since they are also used by the IRS to determine whether a person is self employed for tax purposes. However, the fact that the IRS considers a worker to be self employed does not necessarily mean that the worker will be considered an independent contractor or subcontractor for I-9 verification purposes.
Assuming that the worker is an independent contractor the company could still be liable for penalties if it uses the subcontractor or independent contractor with the knowledge that they are unauthorized. See 8 CFR section 274a.5. What constitutes this type of “knowledge” will be a case by case determination. IRCA provides that “knowing” includes “constructive knowledge”, and defines constructive knowledge as “knowledge which may be fairly inferred through notice of certain facts and circumstances which would lead a person, through exercise of reasonable care, to know about a certain condition.” 8 CFR section 274a.l(1). An employer could be held to be on such knowledge when it shows reckless and wanton disregard for the consequences of letting a contractor into its workforce, such as where an employer knows that a contractor has supplied it or others with unauthorized aliens in the past. If the company is using a contractor with a checkered past then it should take precautionary steps to make sure the contractor now has its house in order. There are a variety of contractual provisions which a company might use to protect itself. Employers should consider using contract language imposing on the contractor the duty to comply with all the immigration laws, state and federal, and to require indemnification for any fines or legal fees incurred by the employer because the independent contractor’s employees are not authorized to work in the US. Note however that IRCA prohibits requiring such a bond or indemnity from an individual employee. Counsel should be used to draft the appropriate language. Other contract provisions could include requiring independent contractors to furnish copies of their I-9s and other documentation, or require the contractor to submit to an audit.