By: Kevin M. Mosher, Esq.

On July 22 the Department of Homeland Security (DHS) issued a long awaited final rule to its 2006 regulations regarding electronic storage options for the Form I-9. In the end, this final rule slightly amended the 2006 regulations to favor employer's use of an electronic storage system for the I-9s.

In 2006, DHS issued a set of interim guidelines setting forth an employer's ability to store its Forms I-9 electronically. Prior to this, federal law required that all employers maintain the original or a microfiche/microfilm version of the Form I-9 for the statutorily required retention period. For larger companies and businesses with high turnover this created a significant amount of paperwork. Recognizing the digital age, DHS set out a series of requirements that employers could follow to avoid this paper, film or fiche storage obligation. The 2006 rules created a framework by which employers could store the Form I-9 electronically and use electronic signatures.

The July 22 regulation finalizes the 2006 interim rule and amends it slightly in the following ways:

• Clarifies that employers can use any combination of storage mechanisms - paper or electronic storage.

• Clarifies that employers have 3 business days (not calendar days) in which to complete the Form I-9. This clarification was made in the general Form I-9 changes in 2007, but has now been amended with regard to these electronic storage regulations.

• States employers may change electronic storage systems so long as the new system satisfies the regulatory requirements.

• States employers using an electronic storage system need not retain audit trails each time the Form I-9 is viewed, but only when it is created, completed, updated, modified, altered or corrected.

• Requires that employers provide transaction receipts to employees, but only upon the employee's request.

Overall, the final rule offers a handful of nice clarification points for employers. The opt-in nature of the transaction receipt in particular may prove to be a significant paper and time-saving change for high-volume employers such as staffing agencies and large companies; and no longer having to retain audit trails except with certain major events is a good change. Otherwise, the changes are not incredibly substantial from the 2006 interim regulations.

If you have any questions regarding these changes or the electronic storage of the Forms I-9, please contact Kevin Mosher at kemosher@wesselssherman.com