Conduct Your Own I-9 Audit Before ICE Does: 6 Tips for Avoiding Costly Mistakes
U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) conducted a two-phase nationwide operation in which I-9 audit notices were served to more than 5,200 businesses around the country since January 2018. A notice of inspection (NOI) informs business owners that ICE is going to audit their hiring records to determine whether they are complying with existing law.
During the second phase of the operation from July 16 to 20, 2018, HSI served 2,738 NOIs and made 32 arrests. During the first phase of the operation, Jan. 29 to March 30, HSI served 2,540 NOIs and made 61 arrests.
While the agency routinely conducts worksite investigations to uphold federal law, HSI is currently carrying out its commitment to increase the number of I-9 audits in an effort to create a culture of compliance among employers, according to Derek N. Benner, Acting Executive Associate Director for HSI. The seriousness of these investigations is described by Mr. Benner: “This is not a victimless crime. Unauthorized workers often use stolen identities of legal U.S. workers, which can significantly impact the identity theft victim’s credit, medical records and other aspects of their everyday life.
HSI uses a three-pronged approach to worksite enforcement: (1) compliance, from I-9 inspections, civil fines, and referrals for debarment; (2) enforcement, through the criminal arrest of employers and administrative arrest of unauthorized workers; and (3) outreach, through the ICE Mutual Agreement between Government and Employers, or IMAGE program, to instill a culture of compliance and accountability.
From Oct. 1, 2017, through July 20, 2018, HSI opened 6,093 worksite investigations and made 675 criminal and 984 administrative worksite-related arrests, respectively. In fiscal year 2017 (October 2016 to September 2017), HSI opened 1,716 worksite investigations; initiated 1,360 I-9 audits; and made 139 criminal arrests and 172 administrative arrests related to worksite enforcement.
What is the I-9 Form?
The I-9 Form is an instrumental part of the new employee on boarding process, and should be completed within the first 3 days of hire. This form is used for verifying the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States, including both citizens and non-citizens.
To many employers and HR professionals, an I-9 form may appear to be a simple piece of hiring paperwork. However, the one page I-9 form comes with enough rules and regulations to fill a 69-page how-to manual, the M-274 Handbook for Employers.
In order to ensure compliance with the I-9 requirements, it is recommend that employers conduct and audit of their files to ensure that there is a signed I-9 form on file for each employee. These forms should be stored together in a separate I-9 file, rather than each employee’s personnel file. This way, in the event USCIS conducts an audit, the employer only has to turn over the I-9 file, as opposed to information about the employee that is outside the scope of the agency’s audit. Read below for an explanation of the I-9 audits and tips to be prepared in the event you receive a visit from US Immigration and Customs Enforcement (ICE).
Who is an “Employee?”
An “employee” is a person who performs labor or services in the United States for an employer in return for wages or other remuneration. The term “Employee” does not include those who do not receive any form of remuneration (volunteers), independent contractors, or those engaged in certain casual domestic employment.
Who Must Complete the Form?
Both employees and employers, or authorized representatives of the employer, must complete the form. The employee must attest to his or her authorization to work in the United States, and must evidence this permission by presenting the employer with acceptable documents (i.e. passport; or drivers license and social security card; or Employment Authorization Document (EAD) card). The employer must physically examine the employment eligibility and identity document(s) that the employee presents to the employer in order to determine whether the document(s) reasonably appear to be genuine and relate to the employee.
Information from the identifying documents must be recorded in the Form I-9. The list of acceptable documents can be found on the last page of the form. Employers must retain Form I-9 for a designated period and make it available for inspection by authorized government officers. As an additional step in the work eligibility step, employers may use the E-Verify system.
Is the Form In Other Languages?
The Spanish version of Form I-9 may be filled out by employers and employees in Puerto Rico ONLY. Spanish-speaking employers and employees in the 50 states and other U.S. territories may print this for their reference, but may only complete the form in English to meet employment eligibility verification requirements.
Should You Keep Copies of the Employees’ Identification?
You may want to keep copies of the employees’ identification for legal defense purposes. For example, in the event that the documents prove to be fraudulent, the employer will have proof that the documents, on their face, appeared to be genuine and to relate to the person presenting them. In order to avoid violating anti-discrimination laws, if the employer chooses to make copies of documents, copies must be made and retained for all employees, regardless of their national origin or citizenship status. If you participate in E-Verify and the employee presents a document used as part of Photo Matching, you must retain a photocopy of this document.
Keep in mind, copies of the employees’ identification must not be used for any other purpose. If you make copies or electronic images of the employee’s documents, they must be either retained with the corresponding Form I-9, or stored with the employee’s records in accordance with the standards for electronic records retention as specified in 8 CFR 274a.2(b)(3). However, if copies or electronic images of the employee’s documents are made, they must be made available at the time of a Form I-9 inspection by DHS or another federal government agency. It’s best to keep the identification copies with each respective I-9 form, and to keep the I-9 forms together in one I-9 file, as opposed to the personnel files. For the full text, see USCIS’ Handbook for Employers M-274, section 10.5.
I. WHAT HAPPENS WHEN THERE IS AN AUDIT?
The administrative inspection process is initiated by US Immigration and Customs Enforcement (ICE)’s service of a Notice of Inspection (NOI) upon an employer that compels the production of I-9 forms. By law, employers are provided with at least 3 business days to produce the Forms I-9. Often, ICE will request the employer provide supporting documentation, which may include a copy of the payroll, list of current employees, Articles of Incorporation, and business licenses.
ICE agents or auditors then conduct an inspection of the Forms I-9 for compliance. When technical or procedural violations are found, pursuant to INA §274A(b)(6)(B) (8 U.S.C. § 1324a(b)(6)(B)), an employer is given 10 business days to make corrections. An employer may receive a monetary fine for all substantive and uncorrected technical violations.
Employers determined to have knowingly hired or continued to employ unauthorized workers under INA § 274A(a)(1)(a) or (a)(2) (8 U.S.C. § 1324a(a)(1)(a) or (a)(2)) will be required to cease the unlawful activity, may be fined, and in certain situations may be criminally prosecuted. Additionally, an employer found to have knowingly hired or continued to employ unauthorized workers may be subject to debarment by ICE, meaning that the employer will be prevented from participating in future federal contracts and from receiving other government benefits.
Monetary penalties for knowingly hire and continuing to employ violations range from $375 to $16,000 per violation, with repeat offenders receiving penalties at the higher end. Penalties for substantive violations, which includes failing to produce a Form I-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers 5 factors: the size of the business, a good faith effort to comply, the seriousness of violation, whether the violation involved unauthorized workers, and the employer’s history of previous violations.
ICE will notify the audited party in writing of the results of the inspection once it is completed.
II. WHAT ITEMS SHOULD YOU CONSIDER WHEN CONDUCTING AN AUDIT OF YOUR COMPANY’S I-9 FILES?
There are many common mistakes and human errors that can be made while completing and maintaining I-9 records. If an employer fails to complete or maintain I-9 documentation correctly, that employer may fall out of compliance with ICE’s rules and suffer harsh financial penalties.
1. Failure to Comply with the 3-Day Rule
The “three-day rule” is not just an outdated dating custom! By law, the employee must complete section 1 of the form, provide identification documents in person to the employer, and have those documents verified by the employer all within three business days of hire.
Fines for technical violations can range from several hundred to several thousand dollars, depending on the number, severity, and frequency of the offenses. For an explanations of the fines and matrix that USCIS uses to calculate aggravating and mitigating circumstances, click here.
2. Incorrect or Missing Forms
First, make sure you are using the correct I-9 form, as USCIS periodically changes the operative version. For the latest version and instructions, check the USCIS website I-9 page here.
3. Failure to Re-Verify Employee Status
U.S. employers must check to make sure all employees, regardless of citizenship or national origin, are allowed to work in the United States. Non-US citizens must have valid work authorization in order to work for a US employer. Having an Employment Authorization Document (EAD) is one way to prove that an employee is allowed to work in the United States for a specific time period. An EAD card is only valid for as long as the employee has a current immigration status. Make a note of the future expiration date, and check back with the employee for an updated card close to the expiration date.
Be sure to calendar future expiration dates, and ensure that more than one person in the company has access to these dates. Otherwise, they may pass by unnoticed in the event the person in charge of re-verification is out of the office, or no longer in the position at the time of the employee’s renewal deadline.
4. Invalid Identifying Documents
After the employee accepts your offer of employment, provide the employee with a list of acceptable identifying documents to bring with him or her to the office on the first date of work. To make it simple, provide the employee with the list of documents provided on page 4 of the I-9 form–no more, no less. Otherwise, you could be subject to discrimination suits if you target certain employees by asking for additional documentation outside the scope of this form.
In the flutter of activity during hiring, hiring managers may forget to check that all necessary documents are presented and valid. If an employer fails to obtain the right combination of identifying documents from lists A or lists B and C, the I-9 documentation will be considered incomplete and the employer could become subject to fines.
In addition, many forms of identification on the lists also have expiration dates (such as a driver’s license, passport, or EAD card), and if an employer fails to obtain current identification, that can also put them out of compliance. Always verify that the identifying documentation is still valid and not expired.
5. Improper Document Maintenance/Storage
Employers are required by law to maintain original I-9 Forms for inspection for all current employees. In the case of former employees, retention of Forms I-9 are required for a period of at least 3 years from the date of hire, or for 1 year after the employee is no longer employed, whichever is longer.
Store these files in a safe place (i.e. locked file cabinet or secure server) where only limited trusted employees have access to them. In addition, these forms should be stored together in one separate I-9 file, rather than each employee’s personnel file.
6. Lack of Supporting Documentation for E-Verify Photo Matching
In 2010, E-Verify introduced photo matching as a way to prevent employees from using false identifying documents. For passports, passport cards, Permanent Resident cards and Employee Authorization Cards, the E-verify system will require employers to compare the document photo with an onscreen photo as an additional security measure.
ICE also mandates that employers maintain a copy of the employee’s photo identification as a supporting I-9 document, so it is recommended that employers keep a copy of the photo identification on file to avoid any fines.
In order to maintain compliance with ICE requirement, it is vital that the employees in charge of this process are properly trained on obtaining and storing I-9 forms and supporting documentation in a timely thorough, and safe manner. By conducting an internal audit at least once or twice a year, the company can catch and rectify mistakes before an ICE audit results violations and hefty fines.
About The Grady Firm. P.C.
The Grady Firm, P.C. attorneys specialize in helping businesses grow and succeed through employment, business, and immigration law advising for clients in California. They help perform personnel audits, draft/revise Employee Handbooks, train employers on employment law compliance, provide on-demand legal analysis for hiring and firing questions, and provide leadership and sexual harassment training in English and Spanish.
To learn more about ensuring your business is compliant with state and local laws, schedule a complimentary 15-minute consultation with The Grady Firm’s attorneys; call +1 (949) 798-6298; or fill out a Contact Request Form.
*This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.
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