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New York Employment Lawyer Discusses Best Practices For an Immigration Customs & Enforcement (ICE) I-9 Compliance Audit

Thumbnail image for Thumbnail image for above-the-bar-logo-no12.jpgWith each passing year, the number of regulations being placed on employers in New York State is increasing. Today’s topic, although not a new regulation, is a critical one that is often overlooked and can pose a significant risk for small businesses and their owners personally. On November 6, 1986, the Immigration Reform and Control Act was passed and thereafter it required employers to verify the identity and employment eligibility of their employees and failure to do so can result in civil penalties and criminal enforcement. See Section 274A(b) of the Immigration and Nationality Act (INA). In short, employers cannot hire undocumented workers. Employers must use a Form I-9 (formally called an Employment Verification Form) to document and verify. Importantly, completion of this short three page I-9 form is required for ALL employees of the company. It may sound like a simple process to only hire employees authorized to work in the country, verify it and then document it but many companies are negligently or intentionally making errors regarding compliance and the Immigration Customs and Enforcement (ICE) has taken note and is conducting targeted and random audits and issuing determinations with substantial economic penalties. Indeed, Infosys Corporation was issued a $34 million dollar fine for systematic visa fraud and related violations of the law. While that case involved systematic fraud, it has served as a wake-up call for all businesses to conduct internal audits before an official inquiry is commenced. If you have any questions about your workforce or employment practices, contact our Award-Wining New York Employment Lawyer at (800) 893-9645 for a confidential consultation to understand your legal obligations and potential exposure. We have helped many small businesses implement and maintain best practices to protect and defend their businesses.

When Do Employers Complete the I-9 Form and How Long Do They Need To Retain Them?

Employers must start the verification process on or before the first day of an employee’s employment and must complete the documentation process within three business days of after the hire date. The third page of the form contains a list of acceptable documents for the employee to select and provide to prove eligibilty to work in the United States. A sample copy of the I-9 form can be found here.

The completed forms are not filed with any government agency upon hire but there are strict retention requirements. Employers must the original I-9 forms for all current employers and make them available for inspection by the federal government upon request. For former employees, employers are required to maintain the original completed form for three years from the date of hire or one year after an employee’s termination date, which is longer. While these storage obligations can be difficult for smaller employers, it is critical to maintain these files. Like many compliance issues – more is not necessarily better- non-compliant forms maintained for beyond the record retention period can lead to additional liability.

Companies should create a checklist detailing the on-boarding process when hiring a new employee. It is recommended that only select employees be trained on the I-9 process so that they can be dedicated to completing the tasks. Too often, an untrained employee – clerical or human resources – can make a mistake in this process – the types of acceptable documentation can be complicated as it can involve reviewing documentation from all over the world.

How Can An Audit Start and What Should an Employer Do?

In general, a compliance audit will be kicked off after an employer receives a letter from ICE. This cannot be stressed strong enough — employers should contact experienced employment law counsel immediately so an internal review can be conducted. A delay in the process by the company may be considered negatively by the government. An audit can be commenced because of a specific complaint by a worker, past practices or random audits. Employers who utilize undocumented workers or misclassified independent contractors are at risk. At times, ICE targets certain industries as well because of their history of using undocumented workers. The number of random audits has increased in recent years and smaller employers are being selected as well.

What Are The Penalties for Non-Compliance?

The civil fines can range from $375 for each worker to $16,000 per violation. Specifically, if a company hires or continues to employ a person knowing that person that is not authorized to work in the United States – the fines range from $375 per worker to $16,000 per violation for repeat offenders. Failure to comply with I-9 form requirements can result in a $110 fine per violation to $1,100 per form for repeat offenders. In addition, committing or participating in documentation fraud can result in $375 per violation to $16,000 per violation. These numbers can become staggering depending on the size of the workforce – note, each fine is based on each violation – if a company has 50 employees, it could have 50 or more violations depending on the circumstances. These fines can add up quickly. Before determining a fine amount, ICE consider multiple factors including — (i) the size of the business, (ii) good faith efforts towards compliance; (iii) severity of the violation; (iv) if the violation involved undocumented workers or were related to authorized employees; and (v) a business’s history of prior violations. Good faith attempts can be viewed in a positive light by ICE. Aside from monetary fines, a criminal sentence of up to six months can be suggested when it is determined that employers have engaged in a pattern or practice of hiring, recruiting or referring for a fee undocumented workers. Companies are encouraged to cooperate during the investigation process and, if a resolution cannot be reached, an employer can request a hearing before Office of the Chief Administrative Hearing Officer.

If you have any questions or concerns about your I-9 process and your compliance obligations, contact our Award Winning New York Employment Lawyer and learn your rights and about best practices. Proactive steps can be critical in preventing compliance errors and mitigating any potential exposure.

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