What to Do if ICE Serves Your Business With a Form I-9 Audit

In 2018, Form I-9 audits quadrupled from the previous year, and they're still on the rise today. During the audits, Immigration and Customs Enforcement (ICE) inspectors review businesses' documentation regarding work authorization for their foreign employees. 

I-9 audits can have consequences for employers who fail to comply with the law. Fines and penalties for failed I-9 audits can run into the tens of thousands of dollars, and repeated willful violations of the law could even lead to criminal prosecution in rare cases. 

If you're not sure you're prepared for a Form I-9 audit, you'll want to play it safe and review your current employees' documentation. Here's a look at the I-9 audit review process, as well as advice from experts on how to proactively prepare for an I-9 audit if your business receives a notice of inspection from ICE.

What is an I-9 audit?

Employers who hire foreign nationals are required to fill out and maintain the federal government's Form I-9, which demonstrates work authorization status for each foreign employee. While employers are required to maintain and update these records accordingly, many small businesses are not required to submit any documentation to the government unless they are subject to an audit. As a result, many small businesses allow their I-9 records to fall out of date and sometimes become inaccurate, said Henry Mascia, an immigration attorney at Rivkin Radler. 

"Larger companies have HR professionals that are trained in this area, and they usually do a very thorough job, but small businesses often don't have that sense of urgency," Mascia said. "They don't have to file the I-9; they just have to keep it in their office. So, a lot of companies don't have the sense of urgency that they should, and [despite the surge in audits] we're not seeing many of them do a better job." 

Form I-9 requires you as an employer to verify the identity and employment eligibility of everyone who works for you. Even if an employee leaves, you have to keep their I-9 for at least three years from the date of hire. 

ICE announced in a press release that the agency issued 5,200 I-9 audits from the start of 2018 through July of the same year, which represented a fourfold increase in the rate of audits over the previous fiscal year. While that number is relatively small in the big scheme of things, Mascia said employers should be aware that the Trump administration has made stricter enforcement of immigration law a high priority, and we should expect the trend to continue. 

"Enforcement is something that, by its nature, is affected by the administration that's enforcing the law," Mascia said. "This administration has made it clear that its priority is stricter enforcement, so we can expect more rigorous I-9 enforcement for the duration of this administration." 

When you receive a notice of inspection (NOI), you have three business days to produce the I-9 forms for each employee. The government agency may also ask you to supply supporting documentation, which could include a copy of the payroll lists, lists of current employees, articles of incorporation for the business and any related business licenses. The agency then reviews the forms and issues either a violation or a compliance letter.

Technical violations vs. substantive violations

I-9 audits can result in two types of violations: technical and substantive. As the name suggests, technical violations typically involve paperwork errors or discrepancies in certain information. These errors usually don't result in any fines, and ICE gives employers time to correct the technical errors and return the documentation. Left unrevised, however, technical violations could become substantive violations. 

Substantive violations are the more egregious violations of the law, and these typically result in a fine depending on the nature of the violation. These violations include repeated and unresolved errors on Form I-9, willful distortion of facts, or the submission of false documentation to ICE. The agency maintains a matrix of ranges for fines related to various violations.

I-9 audit fines

I-9 audits vary in the levels of fines they can impose. Depending on the severity of an employer's violation, fines can reach into the tens of thousands per employee. For employers who repeatedly and knowingly violate the law, ICE could even begin criminal proceedings. 

On ICE's website, the agency maintains a fine schedule that outlines what an employer might be subject to pay for I-9 violations. These are the fees listed on the table:

What to do if you're targeted for an I-9 audit

The first thing you should do when you're targeted by ICE for an I-9 audit is contact an immigration attorney to guide you through the process. 

"[Employers] have to have an I-9 for each employee – they risk a fine if they do not – but they do not need to produce the I-9s on the spot," said Kerry Bretz, senior partner at Bretz & Coven. "They have three days from receiving a notice of inspection. Use that time to retain counsel. Counsel will try to have the inspection either at the offices of ICE or the lawyer's office, not the place of business." 

Bretz added that employers are not required to grant agency representatives access to their workplace unless the ICE inspectors have a warrant. Instead, employers or their staff should accept the NOI, ask for a business card, and then take their three days to retain counsel and set a follow-up meeting. 

During the meeting, Bretz said, employers have a few rights and obligations of which they should be aware. 

"You need not answer questions, but if you speak, do not lie. It is a crime to lie to law enforcement," Bretz said. "You can contest fines and have a hearing, often done telephonically. You can negotiate a lower fine or argue mitigating circumstances. However, once a business has been fined and told they must discharge unauthorized employees, they risk criminal penalties if they continue to employ the person or rehire them, knowing they are unauthorized."

How to prepare for an I-9 audit before you are noticed

As with most regulations, the best method is to prepare for an I-9 audit proactively. You might never be targeted, but if you are, it is important to demonstrate a good faith effort to comply with the law and remediate any errors that you might have made in capturing or updating Form I-9 information.

1. Complete forms with employees.

As you might have guessed, filling out the I-9 form is the first step in preparing for an audit, and it should be part of your employee onboarding process. 

There are three parts of the document that require completion by both the employee and the employer. Here's how to tackle each section. 

• Section 1: Employee Information and Attestation: Your employee must fill out this section before or on their first day of employment. The information they'll provide includes their full legal name, additional names if applicable (such as their maiden name), current address, date of birth, citizenship status, alien/USCIS number, Form I-94 admission number or foreign passport number, the date their employment authorization expires, and possibly their Social Security number and/or email address. The employee will then sign and date the form.
  
  
• Section 2: Employer or Authorized Representative Review and Verification: As the employer, you must fill this section out within three business days of the employee's first day. The employee will provide you with the proper documentation (their driver's license, Social Security card, etc.) to prove their identity and employment authorization. Then, you'll be responsible for verifying that the documentation is original and valid, and entering the information from the documents in the form. When you complete it, enter the date of your employee's first day, then sign and date the section, providing your business name and address before returning it to the employee.
  
  
• Section 3: Reverification and Rehires: As an employer, you only need to fill out this section in cases of reverification or rehiring. For reverification, you will examine the presented documentation for legitimacy; record the document title, number and expiration date; and sign and date the section. For rehires, you will confirm that the original I-9 relates to the employee and their documentation has not yet expired, enter the date of rehire, and sign and date the form. If their I-9 form is no longer valid, the employee must provide proper documentation.

2. Conduct an internal audit.

Mascia recommends conducting your own audit to catch errors that ICE would in a formal audit. For small businesses, this might mean going through every employee's Form I-9, but for larger companies, selecting a handful of employees at random should be adequate. Internal audits also give employers the opportunity to update any I-9s that might be inaccurate or out of date. If any employees require reverification of work authorization, an internal audit could be used to stay on top of that process as well. 

"If an employer doesn't have [a] system to remind the person responsible to reverify that authorization, they could be inadvertently employing people not authorized to work," Mascia said. "It's one of those things that slips through the cracks. It can be a lot to keep track of, so having internal procedures for reverifying employment authorization is critical." 

Here are some steps to prepare for an internal I-9 audit process:

1. Gather employee data and I-9 forms.
2. Search forms for errors and omissions.
3. Ensure all forms are compliant and up to date with the current requirements.
4. Note any missing forms or information, as well as any errors.
5. Discard any expired I-9s.
6. Address any issues. 

Some common mistakes employers and employees make on I-9 forms are neglecting to fill out certain sections or meet specific deadlines. For instance, many professionals do not provide their signatures, the proper documentation or information, or their USCIS number if they're a "lawful permanent resident." Review each section carefully during your audit to catch any of these potential mistakes.

3. Correct any errors or omissions.

If you find any discrepancies in your audit, correct them right away. According to U.S. Citizenship and Immigration Services (USCIS), you simply need to draw a line through any inaccurate information and enter the correct information, then initial and date the correction.

If there are many errors, you might consider redoing the entire section and attaching it to the original form, or simply starting from scratch with a new I-9. However, do not try to conceal any mistakes.

4. Store I-9 forms and associated documents in a secure location.

The USCIS recommends storing your forms either onsite or at an offsite storage facility, and in a single format or combination of different formats, such as paper, microfilm or microfiche, and digital. Because these forms hold sensitive information, make sure they're in a secure yet accessible location. 

Keep in mind that I-9 forms must be kept either for three years after the employee's hire date or one year after the end date of their employment (whichever is later). 

Staying on top of Form I-9 might seem like a headache, but it could save you thousands of dollars. While the total number of I-9 audits remains relatively low, ICE is stepping up enforcement at an unprecedented rate. If your business could be a target of an I-9 audit, now is the time to ensure your documentation is in order and up to date. 

Adam Uzialko contributed to the reporting and writing in this article. Source interviews were conducted for a previous version of this article.