Authorized Employees? Form I-9 Non-Compliance Risks

by Robert P. Rudolph

If you have worked in the United States, then you have (hopefully) filled out a Form I-9 Employment Eligibility Verification. The Form I-9, issued by the United States Department of Homeland Security (“DOL”), is used to verify the identity and employment authorization for all persons hired for employment in the United States. Pursuant to the Immigration Reform and Control Act, all U.S. employers are obligated to ensure proper completion of a Form I-9 for each individual employed and are exposed to criminal and civil sanctions for failing to do so.

The procedure for completing a Form I-9 is straightforward, yet many employers fail to properly follow the rules. On the Form I-9, an employee must attest to his or her employment authorization. The employee must also present his or her employer with acceptable documents evidencing identity and employment authorization. The employer must examine the documents to determine whether they reasonably appear to be genuine and to belong to the employee and record the document information on the Form I-9. Employers are required by law to maintain for inspection original Forms I-9 for all current employees. In the case of former employees, retention of Forms I-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 employed, whichever is longer.

U.S. Immigration and Customs Enforcements (“ICE”) uses an inspection program to ensure I-9 compliance as part of the DOL’s strategy to address and deter illegal employment within the United States. Over the past several years, ICE has made a commitment to increase worksite enforcement efforts. According to a December 11, 2018 press release issued by ICE, I-9 audits increased more than 300% during fiscal year 2018 as compared with the previous year.

The inspection process begins with the service of a Notice of Inspection (“NOI”) from the DOL compelling the production of Forms I-9. It also often compels the production of other payroll and corporate documents. Audits can be conducted with three business days’ notice, so employers must maintain organized and updated Forms I-9 at all times. All managerial staff must be trained to handle service of an NOI. Anything said by an employee of the company to ICE will be considered part of the investigatory record and can be used as evidence. Being served with an NOI should prompt the same reaction as service of any other legal papers. ICE should be treated as an adversary and legal counsel should be contacted immediately to assist in responding to the NOI.

An employer may receive monetary fines for all substantive violations and uncorrected technical violations. Employers determined to have knowingly hired or that continue to employ unauthorized workers will be required to cease the unlawful activity, may be fined and may be criminally prosecuted. Monetary penalties for knowingly hiring and continuing to employ violations range from $375 to $16,000 per violation. Penalties for substantive violations, which include but are not limited to failing to produce a Form I-9 for an employee, range from $110 to $1,100 per violation. Accordingly, fines imposed as a result of an ICE investigation can be substantial.

There are a few key takeaways from the increase in investigations by ICE. First, it is important for all employers to conduct a periodic (at least every 6 months) internal audit of Forms I-9 to ensure compliance and readiness for an ICE inspection. This also provides an opportunity to determine what I-9 compliance training may be necessary for staff. Second, employers should have a policy in place for maintaining Forms I-9 of terminated employees for the required timeframe and destroying them when permitted. Third, employers should have an internal protocol in place for responding to legal process, including the service of an NOI. Fourth, employers should consult legal counsel before speaking with ICE or responding to the NOI. In the event of an ICE investigation, violations can be substantial, but good faith efforts for compliance may help mitigate the potential penalties.