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Knock, Knock. It’s ICE. Are Your Forms I-9 in Order?

Tue, 05/21/2019 - 12:12 -- admin25

by Kelli Gavin

Federal law requires employers to verify the identity and employment eligibility of all employees. Failure to do so can result in civil or criminal sanctions. The Employment Eligibility Verification Form I-9 documents this verification. Forms may be inspected by Homeland Security’s Immigration and Customs Enforcement. Below is a hypothetical audit from start to finish:

Notice of Inspection: ICE Auditor Smith appears at BigBuilders (BB) on May 1 and serves the owner with a Notice of Inspection. This notice states that BB has three business days to give ICE its original Forms I-9 for all current employees. BB gives 100 Forms I-9 to ICE.

  • Best practice: Make copies of all Forms I-9 as ICE may have the originals for 1-2 years. This also allows an external auditor to predict what issues may be found and what fines may result.

Internal Audit: BB hires immigration counsel. Counsel audits the I-9s and supporting documents retained by BB. Counsel can evaluate potential violations to estimate a fine. Counsel discusses creating policies and procedures that ensure a culture of compliance (I-9 training, E-Verify, internal audits).

  • E-Verify is a free web-based system that provides an instant employment authorization result. It must be used on all new hires from the time of enrollment but cannot be used to pre-screen or verify current employees.
  • Best Practice: Make copies of documents provided by employees. While not required, it is highly recommended for internal audit purposes and a good faith defense.

Notice of Suspect Documents: Auditor Smith delivers a list of 50 BB employees who ICE suspects do not have work authorization. BB is given 10 days to ask the employees for alternate documents. BB does not have to disclose to employees that company is under ICE audit. Name discrepancies can cause employees to appear on this list.

  • Warning: an employee’s name appearing on the Suspect Document list is not grounds for termination alone. During an I-9 audit, employees should only be fired once ICE confirms lack of work authorization or based on another termination reason.
  • Best Practice: Create a replacement plan now to determine what positions suspected employees hold, which employees can be terminated immediately, how much time is needed to train replacements, and resources for finding a legal workforce. Do not wait for ICE confirmation, planning ahead will lead to better informed business decisions.

Notice of Technical and Procedural Errors: Auditor Smith provides BB with a notice concerning Form I-9 technical errors. Proof of completed corrections must be provided to ICE within 10 business days. Substantive errors are uncorrectable; these include: failure to timely complete an I-9 (Section 1- first day of employment; Section 2- three business days from date of hire); failure by the employee or employer to sign the Form I-9; or, missing I-9s.

  • Corrections will usually be made on copies of the I-9s. Original forms may not be returned until the audit is complete.

            Confirmation of Notice of Inspection Results: ICE confirms that 45 employees do not have authorization and must be terminated in 5 days. BB terminates 20 employees by the deadline.

  • Companies may be civilly fined for any employee retained after the deadline. Employees may not be kept indefinitely without consequence.

Notice of Intent to Fine and Negotiation: BB is issued a Notice of Intent to Fine of $82,200. ICE currently uses fine matrices to calculate violations (regularly adjusted for inflation). Companies may be fined for 1) substantive or uncorrected technical Form I-9 violations, 2) knowingly hiring unauthorized workers, and 3) continuing to employ unauthorized workers. Counsel and ICE attorney will negotiate a settlement agreement. Counsel will request a lower fine and determine the final date of employment for unauthorized workers. A hearing with an Office of the Chief Administrative Hearing Officer may be requested if negotiations fail.

  • Calculation method: Divide total violations by total employees to determine violation percentage. Percentages correlate to a monetary penalty that is assessed per violation.
    • For BB: 25 violations divided by 100 employees equals 25 percent.
    • BB will be fined $1,754 fine per employee retained for a total of $43,850 solely for continuing to employ violations.
    • The remaining portion of the fine comes from paperwork violations.
  • Alternate outcome: If ICE finds that company is compliant, a warning notice may be issued in lieu of a fine. The more employees terminated by the deadline, the better chance of this outcome occurring.

What Else Could Happen?

  • Raid
  • ICE audits again
  • Criminal charges (pattern or practice, fraud, harboring)
  • IER/DOJ discrimination investigation
  • Debarment from federal contracts
  • DOL audit

ICE audits can be quite lengthy; even straightforward cases may take more than one year to complete. Employers and counsel should be diligent and move towards compliance before ICE arrives. Worksite compliance impacts all businesses and the laws should be paid the same reverence as filing taxes, following safety regulations, and reporting discrimination.

Kelli Gavin is an Associate at the Law Office of Richard A. Gump, Jr. P.C. She can be reached at kelli@rickgump.com.

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