Do You Have Employees? What is an I-9 Audit?

By Attorneys Angela Ho & Nancy E. Miller

In accordance with the Immigration Reform and Control Act of 1986, employers in the U.S.must verify employment eligibility of all employeesthrough the Form I-9, Employment Eligibility Verification.The Form I-9 must be completed for all new hires (including temporary or part-time employment, but not independent contractors), if hired after November 6, 1986. The burden is on the employer to ensure that all employees, citizens and noncitizens, are correctly identified and legallyauthorized to work at the U.S. entity.Failure to abide by regulations in completing and maintaining I-9 forms, whether intentional or inadvertent, can result in substantial fines.

The government requires that specific procedures in the verification process must be followed accordingly. This can include acceptable documents, timeliness of completion, file retention, and re-verification processes. While the form does not need to be filed with a government agency, it is imperative to keep and maintain an updated I-9 database of your employees at all times in case of a government audit. Government audits can come in the form of document production demands or site visits to inspect for proper compliance and are administered by the Department of Homeland Security (DHS), Department of Labor (DOL) and Department of Justice (DOJ). If an investigation reveals that the employer failed to comply with verification requirements or continued to employ unauthorized individuals, DHS or an administrative law judge will impose sanctions.Therefore, it is important for companies to be alert and remain diligent in completing and maintainingI-9 forms.

What civil penalties/sanctions can be incurred for I-9 violations? Or Why should my business care about I-9 upkeep?

The number of I-9 audits conducted by the Department of Homeland Security has been increasing every year. Minor paperwork errors can result in costly penalties; improper discrimination practices in maintaining the I-9 can lead to lawsuits. Additionally, civil penalties are imposed per individual violation, not individual employees or overall violations. Therefore, it is possible that depending on what type and number of violations committed, employers maybe found liable for an exponential amount of fines for each individual employee.
Current civil penalties for violations involving missing or incorrectly retained or completed I-9 forms range from $110 to $1,100 per I-9. Employers who knowingly hire or continue to employ unauthorized aliens can be fined from $375 to $3,200 per alien and subsequent offenses could range up to $16,000. For criminal practices and unlawful discrimination in the I-9 process, fines range from $375 up to $16,000 for repeated offenses per individual. Document fraud can result in fines ranging from $375 to $6,500 for each fraudulent document subject to violation. Various other penalties, such as attorney fees to punitive or compensatory damages, can also apply. In aggregate, and depending on the severity and number of violations, fines can easily reach hundreds of thousands of dollars.

The E-Verify Program

Some employers may wish to consider E-Verify, a voluntary program under the purview of DHS.E-Verify is an online government-sponsored service that assists employers intracking employee employment eligibility specifically in conjunction with the I-9 form. It compares the information on the I-9 form against records from DHS and Social Security Administration databases to make a determination. An important feature of the program is that enrollment and proper use of E-Verify establishes a rebuttable presumption that the company is hiring individuals with legal work authorization. Use of E-Verify could reduce the risk of violations and sanctions imposed on a company in case of an audit. While there are certain advantages to enrolling in the E-Verify program—for example, only E-Verify employers can apply for the 17-month OPT extension for F-1 students—employersshould balance the cost and burden of enrolling in E-Verify.  Additionally, a more in-depth program exists with Immigration and Customs Enforcement (ICE) called IMAGE.

Proper compliance with the I-9 form requires training your human resources staff. When the government audits a company, the employer is given only three days to gather and produce their I-9 record. The best preparation, of course, is preemptive action. In particular, for businesses that employ individuals with nonimmigrant or immigrant status, being knowledgeable of re-verification for an alien’s employment eligibility is a crucial part of complying with standards and avoiding civil penalties. As a preventative best practice, routine training and internal audits should be administered on a regular basis. An knowledgeable and experienced immigration attorney should be retained to work with the employer to review I-9 forms and processes and keep employers apprised of developments in I-9 compliance.