Is Your Business Prepared for an I-9 Audit?

Posted September 30, 2013

As we near the end of the Government’s fiscal year (September 30, 2013), a new wave of I-9 Audit Notices of Inspection and administrative subpoenas have been received by businesses during the last week in August and the first week in September 2013. There is no pattern; no one industry or region— other than the fact that they seem to come in waves near the end of the quarter or fiscal year. There is no way to minimize risk—you can just minimize exposure because of the “randomness” of these inspections.

ICE audit agents have broad authority to conduct an audit. What triggers an audit can range in many ways: reports from disgruntled workers (former or current); reports from active citizens; reports from other law enforcement agencies; prior history of non-compliance; or complete random audits.

Employers who are in industries that have traditionally relied on large numbers of undocumented labor should take precautions to ensure their organization has implemented I-9 compliance protocols.
Employers who have been audited by ICE in the past for its I-9 records should absolutely ensure that it has taken measures to improve I-9 compliance training for its staff. ICE imposes even heftier fines on repeat violators of I-9 rules.

The Legislature has been more than happy to provide DHS with increase funding for worksite specialists and auditors so for the time being, it looks as though I-9 inspections are going to be a mainstay. So, it’ may only be a matter of time before you’re served with one. Are you be ready?

For the uninitiated employers, there is still a notion that if the organization doesn’t hire foreign workers, I-9 compliance is a non-issue. Don’t let this lull you into a false sense of security. After all, I-9 audits have transformed into a “paperwork” audit where ICE will impose penalties for any I-9 deficiencies even if every worker was a U.S. citizen.

The best defense is to be prepared. Educate yourself and your business partners about what it would mean to be served with a Notice of Inspection. How should you react? Would you be caught off-guard? Do you have an action plan that you could confidently implement to minimize the disruption of your business operation? Do your business partners know of the potential penalties? Do they know you could lose your ability to contract with the federal government? Do they know you could lose your ability to participate in E-Verify (if you do), and what impact would that have on your ability to do business in states where E-Verify is required? Make sure all your I-9 paperwork is kept in a central file, location, or in digital format where auditors can access it readily. You usually only have 3 days to prepare once you receive a notice. If you receive subpoenas and/or warrants, there is no “3 day ” notice requirement. Documents are requested immediately.

When officials arrive to inspect an employer’s Forms I-9, the employer must:

Retrieve Forms I-9 and any other documents the officer requests
Provide the officer with the necessary hardware and software to inspect documents if stored electronically
Provide the officer with any existing electronic summary of the information recorded on the employer’s Forms I-9

Employers who refuse or delay an inspection will be in violation of the law. To avoid fines, penalties, and the wrath of the inspector, you can and should do regular self-audits of all or a good sample of your I-9 paperwork.

Be Prepared — Conduct a Basic Internal I-9 Self-Audit

Basic internal audit considerations include reviewing a meaningful sample, or all, of your I-9 Forms. This review should key in on some particular problems that often arise with regard to proper completion of the I-9 forms. Make sure the person doing the audit is familiar with the requirements, the terminology, and that all of their questions have been answered before they start the self-audit.

A sample internal audit checklist should at least include the following:
Employee Information

Employee name stated incorrectly
Date of birth missing or incorrectly stated
Social Security number missing or incorrectly stated
Address missing or incorrectly stated

Citizenship/Immigration Status

Status is not indicated or is incorrectly stated
If employee is a permanent resident, the alien registration number is missing or incorrectly stated
If employee is not a permanent resident but has authorization to work in the United States, the alien number or admission number is missing or incorrectly stated
Expiration date of employment authorization is missing or incorrectly stated

Employee’s Attestation

Employee’s signature missing
Date of employee’s execution of form missing or incorrectly stated
I-9 not signed on date or hire (first day of employment)

Preparer/Translator Certification

Signature of preparer/translator missing
Name of preparer/translator missing or incorrectly stated
Address of preparer/translator missing or incorrectly stated

Form I-9, Section 2. Employer Review and Verification
List A

Inappropriate document listed
List A document identification missing
List A document identification incorrectly stated
List A document issuing authority missing or incorrectly stated
List A document expiration date, if applicable, missing or incorrectly stated
Receipt showing application for document accepted, but original document not presented within 90 days (within 21 days if the receipt was accepted before November 21, 1991).

List B

inappropriate document listed
List B document identification missing
List B document identification incorrectly stated
List B document issuing authority missing or incorrectly stated
List B document expiration date, if applicable, missing or incorrectly stated
Receipt showing application for document accepted, but original document not presented within 90 days (within 21 days if the receipt was accepted before November 21, 1991).

List C

Inappropriate document listed
List C document identification missing
List C document identification incorrectly stated
List C document issuing authority missing or incorrectly stated
List C document expiration date, if applicable, missing or incorrectly stated
Receipt showing application for document accepted, but original document not presented within 90 days (within 21 days if the receipt was accepted before November 21, 1991).

Employer’s Certification

Date of hire missing or incorrectly stated
Signature of company representative missing
Signature of company representative incorrect (i.e., employee’s signature, wrong placement)
Name of company representative missing or incorrectly stated
Title of company representative missing or incorrectly stated
Name of company missing or incorrectly stated
Address of company missing or incorrectly stated
Date of company certification missing or incorrectly stated
Company certification not signed within three days of hire (first day of employment).

Form I-9, Section 3. Updating and Reverification

If employee listed an expiration date in Section 1, employment eligibility not reverified on or before expiration date
If employee listed an expiration date in Section 1, employment eligibility never reverified
Date of rehire, if applicable, missing or incorrectly stated
Inappropriate employment eligibility document listed (i.e., not a document from List A or List C)
Document title or identification number missing or incorrectly stated
Document expiration date, if applicable, missing or incorrectly stated
Signature of company representative missing
Signature of company representative incorrect (i.e., employee’s signature, wrong placement)
Date of company certification missing or incorrectly stated

For more information on I-9 issues check out I-9 Central, Retaining, Storing, and Inspecting the I-9 Form, Self-Audit Questions and Answers, and Customer Support can be reached as well.

If you have any questions about the information in this blog, give Bressler & Company a call at 559.924.1225.

I-9 Audit, I-9 audit preparation