Compliance with Immigration Law and the Value of an Independent Form I-9 Audit

Kristina Ruedas

February 2013

Over the last year, the national news has been populated with headlines addressing the fierce debate over immigration reform. Many may not realize that even before the 2012 presidential election, federal law enforcement agencies had begun paying increased attention to businesses’ compliance with immigration laws and regulations. In 2011 alone there were approximately 2,500 immigration-related audits of employee records, resulting in well over $6 million in administrative fines, and the number of audits performed each year is steadily increasing. The main targets for compliance auditing are the proper completion and storage of Form I-9s for every employee and the proper use of E-Verify to check employees’ immigration status. This article will discuss how the potential fines and disruption of company operations resulting from an audit can be greatly mitigated by conducting an independent I-9 audit before you are audited by the government.

The nation’s immigration laws and regulations apply to every U.S. employer, regardless of whether the employer employs immigrants or not, and the fines and penalties for violation of these laws will be assessed regardless of whether an employer employs immigrants. Every U.S. employer is prohibited from knowingly hiring an immigrant who is unauthorized to work or continuing to employ an immigrant once the employer discovers the immigrant is not authorized or is no longer authorized to work. The government only needs to establish the “knowing” element by a preponderance of the evidence, the easiest legal standard to meet, and knowledge will be inferred by notice of certain facts. An employer’s violation of immigration laws and regulations triggers substantial fines and penalties: between $375 and $3,200 for every incident of “knowingly” employing an immigrant not authorized to work (the fine increases for repeat offenders), between $110 and $1,100 for every failure to properly retain and present a Form I-9 for audit, debarment from federal contracts, and in some cases, criminal charges.

The Immigration and Customs Enforcement Agency (“ICE”) begins an I-9 audit of a company by presenting a “Notice of Intent” to inspect the company documents, which gives the employer 72 hours to gather the necessary documents and prepare for the audit. When ICE returns to the company after 72 hours, its officers demand production of Form I-9s for all current and terminated employees, a list of all current and terminated employees with hire and termination dates, copies of all quarterly wage and hour reports and/or payroll information for all current and terminated employees for the period of inspection, quarterly tax information, business information (valid licenses, etc.), proof of enrollment in E-Verify, and any communications with the Social Security Administration regarding mismatched identification numbers. Any delay in production of the above documents beyond the 72-hour period constitutes a violation of the retention requirements for Form I-9s.

ICE pursues companies regardless of size, industry, or geographic location. Oftentimes, these audits are triggered by a former or disgruntled employee who alerts ICE to possible infractions of the law. The availability of U visas, which grant legal status to immigrants who aid law enforcement and report crimes, also creates an incentive for some former employees to report possible violations of immigration law and regulation. Audits are taxing and expensive for a company that is not prepared to handle the audit expeditiously.

Because of the costs associated with government audits, measured in both potential fines and disruption of company operations, an independent audit conducted in preparation of a potential government audit has significant benefits. The purpose of an independent I-9 audit is to discover any evidence that could be used to fine the employer for “knowingly” hiring or continuing to employ an immigrant unauthorized to work; to recommend how to mitigate potential violations and keep current on best compliance practices; to check the efficiency of an employer’s re-verification system for I-9s; and to determine whether there is substantial evidence of an employer’s good faith efforts to comply with the verification system. An independent audit not only provides peace of mind for an employer, but also acts as a significant mitigating factor should a government audit reveal a mistake or inconsistency in documentation.

Please contact us for an internal review of your company’s immigration compliance or to address any other immigration or employment concerns.