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Forms I-9 are not filed with the government. Instead, employers are to store the forms as they see fit. However, the Immigration and Nationality Act (INA) authorizes the Department of Homeland Security (DHS), the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), and the Department of Labor (DOL) to inspect Forms I-9. The DHS, the OSC, and the DOL provide employers a minimum of three days' notice prior to inspecting retained Forms I-9. An official of one of these agencies will inform the employer of an inspection in person or by certified U.S. mail, return receipt requested.
After it has received a notice of inspection (NOI), the employer must make Forms I-9 available upon request at the location where DHS, OSC, or DOL requests to see them. While this may be the location where the employer stores the Forms I-9, the official may request that the documents be brought to an ICE field office, for example.
Some employers choose to enlist legal counsel as soon as they are notified of an audit. Legal counsel may be able to help employers avoid fines, unnecessary business interruption, or negative publicity in certain cases.
At the time of an inspection, employers must produce all documents requested by the NOI. Generally speaking, employers must:
- Produce all forms kept on paper.
- Retrieve and reproduce electronically stored Forms I-9 and any other documents requested by the officer.
- Provide the compliance officer with any necessary hardware and software to inspect any electronic documents.
- Provide the compliance officer with any existing electronic summary of the information recorded on the employer's Form I-9.
E-Verify employers should provide E-Verify case summaries in addition to Forms I-9 when they receive a request for inspection.
Audit considerations for employers using electronic storage systems
Individual audits of employers may vary slightly depending on the auditor. However, if audited by Immigrations and Customs Enforcement (ICE), employers that store Forms I-9 electronically will likely be required to:
- Produce an audit trail. An audit trail shows the actions performed with or on the company's Forms I-9 during a give period of time. Any time an electronic I-9 is created, completed, updated, modified, altered, or corrected, the system must create a secure and permanent record that establishes the date accessed, who accessed it, and what action was taken. The audit trail shows all the actions taken for a particular I-9.
- Provide the name of the software product being used. Employers should be ready to explain to ICE how the system works and how it allows the employer to fulfill its legal obligations.
- Show ICE the employer's electronic indexing system. An indexing system would allow the employer (and ICE) to search for particular I-9s using specific identifiers, such as the employee's name or the type of documentation presented.
- Produce documentation of the system used to capture the electronic signatures on the Form I-9. This includes the identity and attestation of the individual electronically signing the Form I-9.
- Produce at least one printed Form I-9 that is completely electronically generated. This allows ICE to ensure that electronically stored forms can be reproduced as required by the regulations.
- Provide access to the electronic I-9 system to ICE for a demonstration of the generation of an electronic Form I-9. When accessing an employer's system in this way, ICE will be looking to make sure that the integrity of the I-9 process has not been compromised. An electronic I-9 system should not add or move fields, for example, and should not mix the Form I-9 function with other onboarding functions (such as drug screening or background checks).
Who invited the auditor?
There are many different ways an employer could be selected for a Form I-9 audit. Audits are sometimes conducted in response to a tip received by a government agency or a complaint from a current or former employee. Even discrimination claims regarding the way an employer conducts the Form I-9 process could spark a federal audit. A particular round of government audits may also be focused on employers in particular industries.
Employers should also be aware that federal agencies sometimes share information. If a wage and hour audit reveals an employer's noncompliance, that employer shouldn't be surprised if it is selected for an I-9 audit down the road.
Penalties
Fines for noncompliance can be considerable, though they depend on the nature of the violation. Employers have even been arrested on criminal charges for things like knowingly making false statements on the I-9 or knowingly hiring individuals who are not authorized to work.
Fines and/or penalties can also result when forms are missing, when employers make paperwork errors, when documentation is not properly recorded or temporary work authorization has expired and has not been reverified, or when an employer's electronic storage system does not meet requirements.
Good faith defense
An employer that can show that it has, in good faith, complied with Form I-9 requirements may have established a "good faith" defense with respect to a charge of knowingly hiring an unauthorized alien, unless the government can show that the employer had actual knowledge of the unauthorized status of the employee.
Mitigating damages
An employer faced with a federal audit can influence its outcome by providing full cooperation and working to show the employer's good faith efforts to comply with I-9 requirements. Employers would do well to remember that while auditors work for federal agencies, they are human, and will appreciate working with employers who do not make the audit process more difficult than necessary. As mentioned, some employers choose to retain legal counsel when faced with a federal I-9 audit.
The decision of whether or not to hire counsel will depend on a number of factors, including the state of the employer's I-9 processes and forms, and the employer's level of comfort with the Form I-9 process.
Self audits
Particularly in light of ICE's increased focus on auditing employers' I-9 practices, self audits can be a good idea to help employers uncover problems while they can still be corrected and before they result in sanctions. Whether the problem is incomplete forms, procedures not followed, or untrained staff, a self audit can help an employer find and fix any problems in procedures or paperwork, and make corrections before a government inspection.
Fixing these mistakes can help employers avoid costly penalties and also demonstrates good faith efforts to meet the verification requirements. If discovered by the government, however, the same errors could be very costly. Because a self audit can be performed over time, it can be less disruptive than a last-minute audit forced by a government inspection notice. Private I-9 audits can be completed during a company's non-peak season or over the course of several days or weeks, reducing both their cost and effect on the business.
A few cautions
Employers that do choose to conduct an I-9 audit must not audit forms selectively. Auditing only the forms of individuals who are not apparent U.S. citizens is a form of discrimination and should absolutely be avoided. If an employer is concerned that I-9 forms are not in order, the best course of action is to audit the forms of the entire workforce.
Employers that choose to conduct an I-9 audit must also keep in mind that conducting an audit means that errors will likely be uncovered. Employers that are not prepared to fix errors that are uncovered should consider not going through the process of an audit in the first place.
If I-9s contain (or are missing) information that calls into question whether an individual is truly authorized to work in the U.S., and the company knows about the violation but doesn't attempt to fix it, the organization could be guilty of knowingly allowing an individual to work without proper authorization. This is a considerably more serious offense than errors made in good faith.