Dept. of Homeland Security Launches Mass Audits of Employer I-9 Forms

The Department of Homeland Security (DHS) has significantly stepped up its campaign targeting employers who fail to comply with the hiring and paperwork requirements of federal immigration law. This initiative will result in millions of dollars in civil penalties being assessed against employers for clerical violations even where companies have not been accused of knowingly employing undocumented workers.

On November 19, 2009, the DHS interior enforcement arm, Immigration and Customs Enforcement (ICE), announced the issuance of Notices of Inspection (NOIs) and Administrative Subpoenas to 1,000 employers across the country associated with critical infrastructure-alerting business owners that ICE will audit their hiring records to determine compliance with employment eligibility verification laws. The 1,000 businesses served with audit notices this week were selected for inspection as a result of investigative leads and intelligence and because of the business' connection to public safety and national security-for example, privately owned critical infrastructure and key resources. 

Audits involve a comprehensive review of Form I-9s, which employers are required to complete and retain for each individual hired in the United States. I-9 forms require employers to review and record each individual's identity and work eligibility document(s) and determine whether the document(s) reasonably appear to be genuine and related to that specific individual.

Protecting employment opportunities for the nation's lawful workforce and targeting employers who knowingly employ an illegal workforce are major ICE priorities, for which ICE employs all available civil and administrative tools, including audits. Audits may result in civil penalties and lay the groundwork for criminal prosecution of employers who knowingly violate the law. 

In April 2009, DHS issued updated worksite enforcement guidance emphasizing ICE's major enforcement priorities-specifically focusing on dangerous criminal aliens and employers who cultivate illegal workplaces by breaking the country's laws and knowingly hiring illegal workers. In this strategy, ICE identified I-9 audits as the most important administrative tool in building criminal cases and bringing employers into compliance with the law.

ICE released the following statistics resulting from the 654 employer audits announced in July, 2009:

• ICE agents reviewed more than 85,000 I-9s and identified more than 14,000 “suspect” (i.e., probable fake or identity theft) documents. Suspect documents totaled 16 percent of the those reviewed.
• To date, 61 Notices of Intent to Fine (NIFs) have been issued, resulting in $2,310,255 in fines. In addition, 267 cases are currently being considered for a NIF.
• ICE closed 326 cases after businesses were found to be in compliance with employment laws or after businesses were served with a Warning Notice in expectation of future compliance.

What Should Employers Do to Protect Themselves From The Possibility of Punishing Civil Penalties?

It is clear that a new era in employer sanctions enforcement has dawned for the American business community. Contrary to conventional wisdom in the business community, civil fines are not limited to companies that knew or should have known that its employees were undocumented.

DHS is aggressively looking to raise revenues for more immigration enforcement by targeting relatively innocuous clerical errors, referred to as “substantive violations” because once they occur they generally cannot be corrected without risk of liability. Substantive violations carry a potential penalty of $1,100 per occurrence and there can be more than one on each I-9! Inattention to detail by those responsible for I-9 completion can result in an undetected contingent liability amounting to thousands or hundreds of thousands of dollars.

Businesses need to proactively act to minimize or eliminate this potentially devastating financial exposure. The following steps are essential:

• Conduct an internal, quality control audit of all company I-9s for both current employees and terminated employees for which I-9 retention is required
• Establish a training program for all employees responsible for I-9 preparation
• Correct deficient I-9s in accordance with best practices and ICE policy guidance
• Develop and implement a formal I-9 Compliance Program
• Consider adopting an electronic I-9 completion and storage program offered by third party vendors that meet regulatory “audit trail” requirements
• Carefully evaluate the pros and cons of company registration in E-Verify, the DHS on-line employment verification system

These steps involve a complex evaluation of immigration law, employment law, and personnel policy considerations that must be balanced with a company’s culture and financial resources. The attorneys at Zulkie Partners have considerable experience in developing I-9 compliance programs and representing employers undergoing an ICE audit or facing an ICE enforcement action.

Please contact us if you would like to discuss a worksite enforcement solution for your company.