I-9 Compliance Audits

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September 21, 2018
Author: Jaklyn Wrigley

In 1986, Congress enacted the Immigration Reform and Control Act (IRCA), which was intended to reduce illegal immigration. Despite the enactment of IRCA, illegal immigration continues to increase. In addition to federal legislation and increased enforcement actions by the government, states are enacting immigration laws that place an increased burden on employers to ensure that their workforce is authorized to work in the United States. As a result, every employer must be diligent regarding employment verification of all employees and I-9 compliance. In Mississippi, employers must take the extra step of using the E-Verify program.

Requirements of IRCA
IRCA was enacted on November 6, 1986 and contains provisions requiring employers to verify identity and employment eligibility, penalties for employment of illegal aliens, and prohibitions against discrimination on the basis of citizenship or national origin.

Employer Obligations
IRCA makes it illegal for an employer to:
1. Knowingly hire an alien who is not authorized to work.
2. Hire any individual without verifying identity and work authorization.
3. Continue the employment of a person if the employer knows or should know the person is not authorized to work.
4. Knowingly forge, counterfeit, alter, or falsely make any document for the purpose of satisfying any immigration-related requirement.
5. Knowingly use, accept or receive any false document for the purpose of satisfying any immigration-related requirement.
6. Discriminate in hiring or firing against a citizen or intending citizen on the basis of national origin or citizenship status.
7. Require any specific document or combination of documents.
8. Require more or different documents than are minimally necessary.
9. Refuse to honor documents that reasonably appear to be genuine.

Who is covered?
All employers are covered, regardless of the number of employees, and all employers must verify identity and employability by completing Form I-9 for each person hired after November 6, 1986.

Employment verification is not required for persons hired, referred, or recruited prior to November 6, 1986 (“grandfather” employees), or for the continuing employment of such persons. Employees, including illegal aliens, retain grandfather status if their employment continues. Employees lose grandfather status when they are lawfully terminated by the employer; quit; are excluded from the U.S., deported, or if they leave the country under a voluntary departure order; or are no longer continuing their employment or are not maintaining a reasonable expectation of re-employment at all times.

Completing Form I-9
The employee completes Section 1 and must insert his or her name, address, and date of birth. The employee is not required to provide his or her Social Security Number for I-9 purposes unless the company participates in the USCIS E-Verify Program. In addition, the employee must attest to immigration status and the validity of documents presented to establish identity and employment eligibility. The employee then signs and dates the form. The employer is ultimately liable for proper completion of the I-9 form and must ensure that Section 1 of the form is properly completed by the employee.

New employees are required to present original documents proving identity and employment eligibility. The employer completes Section 2 of the I-9 form by examining the documents presented by the employee and recording the document number(s) and expiration date(s) in the appropriate columns. The employer must then sign a certification stating that the documents: 1) reasonably appear to be genuine; 2) relate to the individual; and 3) authorize the individual to work. The certification also contains a blank for insertion of the date that work commenced. Copying of documents presented by the employee is permitted for purposes of compliance with verification requirements.

Employees must complete Section 1 of the I-9 form before work commences. For employees hired for three days or less, the entire form must be completed prior to commencement of employment. The employer must complete Section 2 of the I-9 form by the end of the third business day, or within 72 hours after employment commences, even if the employee is not scheduled to work for some or all of that period. There is no prohibition against verification before employment begins, but verification of mere applicants could increase potential exposure to discrimination suits and could be very burdensome.

It is recommended that employers complete the entire I-9 form before permitting the employee to begin working. If strictly observed, this policy will ensure that no forms are completed late. Such a policy will be more effective if new hires are informed well in advance of the need to bring valid documents on the first day of employment.

Retention of I-9 Forms and Documents
I-9 forms must be retained for three years from the date work commences and for one year from the date employment terminates. This means an employer must have a form for every single current employee hired after November 6, 1986. Note that for terminated employees, both tests must be met before a form can be discarded. Once both tests are met, it is recommended to dispose of/shred the forms because there is nothing in the statute or regulations that prevents ICE from fining an employer for improper completion of a form even though it no longer need be retained. It is also recommended that employers keep I-9 forms in files separate from personnel files, so that ICE does not obtain access to information in personnel files in the event of an audit.

Note that copying of documents presented by the employee is permitted for purposes of compliance with verification requirements. Therefore, it is recommended that employers make copies of the documents presented and attach them to the I-9 form. The photocopies can be used to correct problems identified during a periodic self-audit or in advance of a government audit. Keep in mind that mere photocopying of documents does not constitute compliance and will result in penalties if the I-9 form is not also properly completed. Do not only request or retain photocopies from employees you suspect are aliens or have foreign sounding names. Doing so is prohibited under IRCA’s discrimination provisions and may also be held to be national origin discrimination under Title VII.

Enforcement Procedures: The Audit
ICE will follow up on any lead deemed to have a reasonable probability of truth.1 Although a lead-driven inspection may initially focus only upon a few employees, it can quickly expand to a full-blown compliance audit. In 1996, IIRIRA authorized INS to enter into work-sharing agreements with state agencies so it is possible that state labor departments will conduct I-9 audits of employers in connection with their regular duties.

An employer, recruiter, or referrer must make I-9 forms available for inspection upon request by an authorized officer of ICE. The employer may, and should, insist upon three (business) days advance notice of a compliance inspection. The employer can also request a formal, written Notice of Inspection. No subpoena or warrant is required to inspect I-9 forms, but the employer can insist upon a subpoena before granting ICE access to other personnel information. ICE will usually subpoena I-9s and “any and all books, lists, payroll records, and personnel records for each employee hired after November 6, 1986.” While ICE subpoenas are not self-enforcing, there is no immediate legal liability for failure to produce subpoenaed items, failure to comply with the ICE subpoena may have adverse practical consequences, and unless the subpoena is unreasonably burdensome, ICE will usually be able to get a federal court order requiring the employer to comply with the subpoena. Failure to produce I-9 forms is a violation of the retention requirements and will result in penalties.

Penalties for Illegal Employment and Recordkeeping Violations
If ICE discovers violations, a Notice of Intent to Fine may issue, setting forth specific facts regarding each violation and a proposed penalty. Knowingly hiring or continuing the employment of an unauthorized alien (hired after November 6, 1986) will result in a civil fine as follows:
1. First violation = $375 to $3,200 per unauthorized alien;
2. Second violation = $3,200 to $6,500 per unauthorized alien;
3. Third and subsequent violations = $4,300 to $16,000 per unauthorized alien;
4. Pattern or practice violations may result in fines of up to $3,000 per alien, and up to six months in prison.

If ICE discovers only minor paperwork violations, a warning is more likely than a proposed fine. Violation of paperwork requirements results in a penalty of $110 to $1,100 for each individual for whom verification was improper or omitted. An ALJ may ignore the fine proposed by ICE and make a separate determination of what fine is appropriate. In doing so, the ALJ will consider the following factors: (1) size of the employer’s business; (2) the employer’s good faith; (3) the seriousness of the violation; (4) whether the employer should have known that the employment was unauthorized; and (5) past history of IRCA violations.

E-Verify (formerly known as the Basic Pilot/Employment Eligibility Verification Program) is an Internet based system operated by the DHS in partnership with the Social Security Administration. E-verify allows participating employers to electronically verify the employment eligibility of newly hired employees. Several states have enacted laws that require employers to register for and use E-Verify (e.g., Arizona) or allow for a phase-in based on the size of the employer (e.g., Mississippi). For states without E-verify legislation, E-verify enrollment is voluntary. In 2008, President Bush signed an amendment to Executive Order 12989 requiring all federal contractors to use E-Verify.

ICE audits are becoming more and more commonplace, and violations carry a hefty fine. To be prepared for an audit and to limit or avoid liability, it is critical to properly maintain I-9 documents.

NOTE: This document is intended for general information purposes only. It is not a complete or all-inclusive explanation, and it should not be construed as legal advice on any specific facts or circumstances. These topics are highly complex and require fact-intensive analyses. You are urged to consult legal counsel concerning your situation and any specific legal questions you might have.

1 Any person or entity may file a signed, written complaint alleging non-compliance. ICE will also accept and act upon anonymous telephone tips. ICE investigates complaints having substantial validity and may initiate its own investigations even without a complaint. ICE investigating officers “shall have reasonable access to examine evidence.” It is not clear whether this language permits inspection of anything other than I-9 forms in the absence of a subpoena or warrant.

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