Corporate and Employment Services
I-9 Audits and Compliance
All U.S. employers are required by law to have their employees properly complete a Form I-9 within three days of employment. The I-9 form is required to be completed, regardless of an employee’s citizenship status. This means that any employer, whether for large company or small 2 person companies, must provide the I-9 form to a new employee hired after 1987 for completion. Even for an individual who hires a household domestic worker, the decision needs to be made whether the person being hired will be considered an employee or the person who holds himself or herself out for employment should be considered an independent contractor. If it is determined that the person will be an employee, the form I-9 must be presented for completion by the employer, and if it is not provided back to employer completed, signed and with correct original forms of identity and work authorization documents, as listed on the form instructions, the employer may not legally employ the person. The Form I-9s must then be retained by the employer for 3 years after the date of hire or 1 year after the employment is terminated, whichever is later.
Upon completion of the I-9 Form, the form itself need not be filed with any government agency. However, Immigration and Customs Enforcement, hereinafter ICE, an agency under the U.S. Department of Homeland Security, investigates employers and enforces the regulations that require I-9 compliance. The ICE agents and auditors may request production of the I-9 Form and accompanying employment documentation. ICE may initiate an audit by serving a Notice of Inspection on the employer, which will give the employer at least 3 business days to provide the requested documents.
Due to the possible violations and fines associated with failure to complete, retain or properly provide the Form I-9 to new employees, an employer should consult with an immigration attorney when a business first initiates business operations. Another time to seek an immigration attorney’s advice is when a business re-organizes or reviews its own business practices. Systematic violations or employer errors may be identified during an internal audit that could save a company thousands of dollars in later legal fees, possible federal criminal charges and civil administrative costs for failure to comply. An employer should specifically have human resource personnel training or company handbooks or literature to prepare any new person hired in the human resource department, or anyone who handles interviewing, marketing and hiring practices for the company. Whether legal advice is sought prior to receipt of an audit, an employer who faces an audit should consult an immigration attorney to determine the best strategy for complying with I-9 requirements, regardless of whether there are few or many employees and regardless of their citizenship.
Even a small employer with a staff of four people who are all known to be U.S. citizens still faces I-9 audit violations if the employer does not request the employee to complete the I-9 form, if the form is not returned to the employer within three business days, if the employee does not present original documents to verify identity and employment eligibility, or if the I-9 form is not completed correctly. It is not the apparent or perceived status of the new employee that matters; it is the requirement of having the form I-9 correctly completed and maintained by the employer that matters.
I-9 Non-Compliance Determinations
Non-compliance with I-9 requirements carries severe potential consequences, including civil penalties and criminal prosecution. ICE may fine an employer anywhere between $375 to $16,000 for knowingly hiring or continuing to employ unauthorized workers. For uncorrected technical violations and substantive violations, including failure to produce an I-9 Form, ICE may levy fines of $110 to $1,100 for each violation.
The following are some of the most common responses to suspected non-compliance during an I-9 audit:
Notice of Suspect Documents: This means that ICE determined that 1 or more employee is not authorized to work in the U.S. However, the employer and employee may provide additional documentation if they disagree with the determination.
Notice of Discrepancies: If ICE was unable to determine whether an employee is eligible for employment it will send this notice.
Notice of Technical or Procedural Failures: When ICE finds non-substantive violations an employer will have 10 days to correct the failures before ICE will fine the employer.
Warning notice: Warnings are only provided where ICE uncovers substantive violations, but expects future compliance from the employer and the circumstances do not warrant monetary fines.
Notice of Intent to Fine: ICE issues these notices for substantive and uncorrected non-substantive violations, as well as for knowingly hiring or continuing to employ unauthorized workers.
ICE considers the following factors in issuing monetary fines:
E-Verify is a voluntary system wherein an employer agrees to be bound to a system of checks between the U.S. Department of Homeland Security and the Social Security Administration to verify the information and documentation new employees provide during the I-9 process. E-Verify is an internet based system administered by U.S.C.I.S. to allow an employer to verify information provided by the new employee. The I-9 Form still needs to be completed by the employee and employer, in order to allow the employer to receive required for the internet query. The only document that differs for the new employee trying to complete the I-9 Form for an E-Verify registered employer is the “List B” document must be one that contains a picture of the individual employee applicant.
E-Verify participation is not mandatory, except for employers located in certain states that require E-Verify or employers who have federal contracts and subcontractors who work for federally employed contractors.
It is important to note that E-Verify does not, in and of itself, ensure compliance with I-9 requirements. The I-9 Form still must be presented, completed and retained properly.
Also, in order to avoid any type of discriminatory practice by an employer, the E-Verify registered employer must sign a memorandum of understanding (:MUA”) and must assign a person who handles new employment in the company to receive training on E-Verify usage. The MUA explains the agreement of the employer to contractually bind the employer to use the system properly and the training describes the proper usage of E-Verify so that the employer will only use the system (1) for a new employee; (2) after a person is hired; and (3) after the new employee completes the I-9 Form. The employer is required to submit the E-Verify query no later than the third day of paid employment, to be in compliance of the I-9 regulations and E-Verify usage.
Determining whether to participate in E-Verify is a matter of whether an employer has certain federal contracts or subcontractors or whether the employment takes place in a state that requires its usage. It is best to seek counsel and advice on whether E-Verify is required and/or whether an employer may want to register to participate in E-Verify.
IMAGE is a program that was conceived to be a partnership between ICE and private sector employers seeking to self-police their own hiring practices. Participating in IMAGE is voluntary and allows employers to identify non-compliance with workforce hiring practices and procedures, and also rectify non-compliance in a cooperative manner with ICE. Employers who choose to follow ICE’s I-9 “best practices” and participate in IMAGE both agree to participate in E-Verify and agree to receive an I-9 audit to review their own workforce. This program allows employers to enjoy a possible reduction in civil penalties if they are found in violation of I-9 requirements, provides training to employer participants in hiring practices, and identifies best practices for having a lawful workforce. Additionally, participating in IMAGE can be a mitigating factor considered in the determination of fines associated with violations. Despite the apparent benefits of the IMAGE program, employers should consider receiving legal advice before opting to join the IMAGE program due to the nature of the self-assumed ICE audit and the fines associated with violations.
The Pinjuh Law Firm provides consultation, in-house audits for self-policing, human resource personnel training, handbooks and materials, and legal advice on ICE I-9 audits, E-Verify and IMAGE participation, and workforce compliance matters.