DHS Outlines I-9 Employment Eligibility Verification Inspection Process

DHS released an overview of the I-9 inspection process, which includes recommended penalties for noncompliance as well as guidance on how investigators should enhance or mitigate the assessed fine. The recommended penalties are presented in two schedules – one for employers who have knowingly hired or continue to employ unauthorized workers, and another for substantive and uncorrected technical violations on the I-9 form. In both schedules, the range of penalties is determined by dividing the number of violations by the number of employees (violation percentage) and then considering whether it is a first offense, second offense, or a third or more offense.

Employers are required by law to maintain for inspection original Forms 1-9 for all current employees. In the case of former employees, retention of Forms 1-9 are required for a period of at least three years from the date of hire or for one year after the employee is no longer an employee, whichever is longer.

The administrative inspection process is initiated by the service of a Notice of Inspection (NOI) upon an employer compelling the production of Forms 1-9. U.S. Immigration and Customs Enforcement (ICE) typically will allow 3 business days to present the Forms I-9.

Often, ICE will request the employer provide supporting documentation, which may include a copy of the payroll, list of current employees, Articles of Incorporation, and business licenses. ICE agents or auditors then conduct an inspection of the Forms 1-9 for compliance.

When technical or procedural violations are found, pursuant to INA §274A(b)(6)(B)(8) U.S.C. § 1324a(b)(6)(B)), an employer is given ten business days to make corrections.

An employer may receive a monetary fine for all substantive and uncorrected technical violations. Employers determined to have knowingly hired or continued to employ unauthorized workers under INA § 274A(a)(l)(a) or (a)(2) (8 U.S.C. § 1324a(a)(l)(a) or (a)(2)) will be required to cease the unlawful activity, may be fined, and in certain situations may be criminally prosecuted. Additionally, an employer found to have knowingly hired or continued to employ unauthorized workers may be subject to debarment by ICE, meaning that the employer will be prevented from participating in future federal contracts and from receiving other government benefits.

Monetary penalties for knowingly hire and continuing to employ violations range from $375 to $16,000 per violation; repeat offenders receiving penalties at the higher end. Penalties for substantive violations, which includes failing to produce a Form 1-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations.

ICE will notify the audited party, in writing, of the results of the inspection upon completion. The following are the most common ICE I-9 inspection notices:

• Notice of Inspection Results - also known as a "compliance letter," used to notify a business that they were found to be in compliance.
• Notice of Suspect Documents - advises the employer that based on a review of the Forms 1-9 and documentation submitted by the employee, ICE has determined that the employee is unauthorized to work and advises the employer of the possible criminal and civil penalties for continuing to employ this individual. ICE provides the employer and employee an opportunity to present additional documentation to demonstrate work authorization if they believe the finding is in error.
• Notice of Discrepancies - advises the employer that based on a review of the Forms 1-9 and documentation submitted by the employee, ICE has been unable to determine their work eligibility. The employer should provide the employee with a copy of the notice, and give the employee an opportunity to present ICE with additional documentation to establish their employment eligibility.
• Notice of Technical or Procedural Failures - identifies technical violations identified during the audit and gives the employer 10 business days to correct the forms. After 10 business days, uncorrected technical and procedural failures will become substantive violations.
• Warning Notice - issued in circumstances where substantive verification violations were identified but circumstances do not warrant a monetary penalty and there is the expectation of future compliance by the employer.
• Notice of Intent to Fine (NIF) - may be issued for substantive, uncorrected technical, knowingly hire and continuing to employ violations

In instances where a NIF is served, charging documents will be provided specifying the violations committed by the employer. The employer has the opportunity to either negotiate a settlement with ICE or request a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO) within 30 days of receipt of the NIF. If the employer takes no action after receiving a NIF, ICE will issue a Final Order. If a hearing is requested, OCAHO assigns the case to an Administrative Law Judge (ALJ), and sends all parties a copy of a Notice of Hearing and government's complaint, thus setting the adjudicative process in motion.

The Notice of Hearing spells out the procedural requirements for answering the complaint and the potential consequences of failure to file a timely response. Many OCAHO cases never reach the evidentiary hearing stage because the parties either reach a settlement, subject to the approval of the ALJ, or the ALJ reaches a decision on the merits through dispositive prehearing rulings.

DHS/ICE Form I-9 and employer sanctions laws enforcement now targets employers through on-site investigations and administrative or "desktop" audits. 

Employer failure to verify employment eligibility and properly complete and retain Form I-9 subjects the company to stiff criminal and civil liabilities, including imprisonment, asset forfeiture, and treble damages in RICO (Racketeer Influenced and Corrupt Organization) lawsuits by competitors. Executives, officers, managers, supervisors and key employees, as well as accountants, arepersonally liable for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification (EEV) practices.

I-9 compliance (and E-verify for registered employers, now including FAR federal contractors) requires that employers verify all workers’ employment eligibility, or work authorization. Persons not authorized for employment, whether documented foreign nationals (or "illegal immigrants") generally do not have work authorization. The I-9 laws and the employment eligibility verification process restrict employment of illegal or undocumented immigrants and employment of persons who are not "employment authorized".

Employer liability extends to circumstantial evidence and “constructive knowledge”.
  It is unlawful to knowingly hire or continue to employ unauthorized workers. This I-9 process mandates accurate and timely completion of the Form I-9 by all U.S. employers and their employees.

"Knowingly hire" includes "constructive knowledge". The requisite employer's knowledge may be constructive knowledge when it may be fairly inferred through notice of certain facts which through exercise of reasonable care would lead a person to know about; or the employer deliberately fails to investigate such facts. Employer constructive knowledge extends to its subcontractors' and independent contractors' I-9 compliance.

Goulder Immigration Law Firm assists employers with Form I-9 consulting, including I-9 and employer sanctions compliance training, developing a company I-9 and employer sanctions compliance manual, and employment eligibility compliance auditing services.  Written I-9 compliance policies and a Form I-9 and employer sanctions law internal audit will help protect employers from government fines and criminal penalties and help ensure that all I-9 Forms comply with I-9 and employer sanctions laws.