United States: Baby It's Cold Outside: ICE I-9 Audits Increase Over 100 Percent

Last Updated: August 3 2018
Article by Dawn M. Lurie

On July 24, 2018, Immigration and Customs Enforcement (ICE) issued a press release confirming that its Homeland Security Investigations (HSI) division had completed the second phase of a nationwide operation from July 16-20. HSI served 2,738 I-9 Notices of Inspection (NOIs1) to US businesses around the country after serving 2450 during its first phase earlier this year. In sum, HSI has now issued almost 5200 NOIs since the beginning of October 2017. Not only this, but HSI also has made 675 criminal and 984 administrative worksite-related arrests. These numbers clearly indicate that ICE takes worksite enforcement very seriously and companies should prioritize a commitment to compliance. Fines for knowingly hiring or continuing to employ unauthorized workers start at $559 per employee and can be as high as $22,363 for repeated offenses. Paperwork violations range from $224 to $2236. Companies may also face additional fines, penalties and forfeitures, and government contractors may face debarment from federal contracts.

In ICE's press release, HSI reminded employers about its "three-pronged approach to worksite enforcement: compliance, form I-9 inspections, civil fines and referrals for debarment; enforcement, through the criminal arrest of employers and administrative arrest of unauthorized workers; and outreach, through the ICE Mutual Agreement between Government and Employers, or IMAGE program, to instill a culture of compliance and accountability."

These events have been expected and actually follow prior comments by HSI officials that we previously reported, confirming that 2018 will be a year of increased immigration enforcement.

What Happens When We Receive an NOI? ?

  • An ICE audit begins when an auditor and/or an ICE agent arrives at your doorstep to serve the company with a Notice of Inspection.
  • Service can also be accomplished via certified U.S. mail, return receipt requested. Ensure you have a protocol to have a NOI reach the right party in a timely fashion.
  • If in person, the agent will generally deliver the notice and will request to see a manager or the person charged with Form I-9 duties. The person receiving service of the NOI will need to sign a document acknowledging receipt.
  • The company will be provided three (3) days to respond to the NOI, but extensions may be granted with good reason.
  • NOIs should be taken very seriously. In 2017, the largest judgment in U.S. history for illegally employing undocumented immigrants was levied against Asplundh Tree Expert Co.— the company had to pay a total of $95 million in forfeitures and civil claims.
    • Recent experience indicates that ICE is routinely requesting the Forms I-9 only of current employees. However, the agency may ask for both the current and terminated employees Forms I-9 (within the retention period), and the agent or auditor may expand the scope as necessary at any point during the review.

Frequently, the NOI includes an administrative subpoena with an additional document request in addition to the Forms I-9. Generally, ICE requests the following:

  • Current employee list, indicating the date of hire, termination and rehire where applicable;
  • E-Verify information (case number on the I-9 or case details attached);
  • Copies of quarterly wage and hour reports for a defined period for the specific location;
  • Payroll records for the site;
  • Business entity information (e.g. EIN, business charter, articles of incorporation, and business licenses);
  • List of subcontractors and staffing companies that serve the site;
  • "No Match" or "Mis-Match" letters from the Social Security Administration; and,
  • Business entity questionnaire—provided by HSI.
  • Remember, all document copies will need to be submitted with the I-9s if your business retains copies of documents. Generally, as a best practice, we recommend keeping document copies.
  • Are there any special considerations when using an Electronic I-9 System?
  • Yes, using an electronic I-9 system adds additional responsibilities. In order to respond to the NOI, a company may be asked to:
  • Answer questions about the electronic Form I-9 system;
  • Retrieve and reproduce electronically stored Forms I-9, along with any other requested documents;
  • Provide the agent with the necessary hardware and software to inspect electronic documents; and,
  • Provide the agent with any existing electronic summary of the information recorded on each Form I-9, information relating to the required indexing system, and all audit trails associated with each I-9.

Why did my company receive a NOI?

  • ICE prioritizes investigations involving critical infrastructure and key resources.
  • ICE may have received a tip or lead about the business.
  • It could simply be random.
  • If you were blessed with a NOI in the past, this could be a re-inspection.
  • Your company may sit in traditionally targeted industries, such as the service industry, restaurants and hospitality, construction, brick and mortar retailers (e.g. food, clothing, drugstores, and home improvement), food production, landscaping, cleaning, maintenance, or packaging and manufacturing.

What to consider after receiving a NOI?

  1. Take this seriously. Receipt of a NOI should be taken very seriously without regard to the size of your company. If you receive an audit notice, it is critical that you act immediately and secure an experienced compliance expert to guide you through the ICE inspection process—immediately retaining experienced immigration compliance counsel protects your business. Inquire as to the specific background the attorney has in defending companies in ICE investigations rather than just conducting internal audits.
  2. Do NOT waive your three-day right to produce the I-9s. You will not receive any "credit" for handing the box of I-9s over while the agent is waiting in the lobby.
  3. Notify your management and executive teams. Inform management immediately of the government's request.
  4. Collect information. ICE and your attorney will need a fair amount of information, such as whether or not you are a federal contractor, you use an electronic I-9 system, how many locations you have and what the footprint is, the last time you had an I-9 training, etc.
  5. Communicate carefully. Cooperate with the agent, but remember he/she is not your friend but rather a representative of the U.S. government charged with investigating your business. The person receiving the NOI is not obligated to speak with the agent, but should certainly be cordial.
  6. Be cognizant of timing. Every minute counts—the law provides just three (3) business days to collect the Forms I-9 (and photocopies of supporting documents, if copies were made at time of completion) and produce them to ICE, so ensure that you have taken the time to prepare beforehand by mandating good I-9 hygiene, including auditing for missing and incomplete I-9s.
  7. Consider requesting an extension. Consider whether you require an extension of time. While discretionary, generally, if reasonable ICE will accommodate such a request. At a minimum, ICE will likely provide an extension for the documents outside of the I-9s.
  8. Do not discriminate. Treat employees fairly and consistently. Ensure that existing employees are not arbitrarily required to provide new or updated Form I-9 information or document copies. The Department of Justice's Immigrant and Employee Rights Section (IER), enforces the anti-discrimination provision of the Immigration and Nationality Act (INA), 8 U.S.C. § 1324b. Visit their website for information on how to better understand the anti-discrimination provision of the INA.
  9. Post-NOI checklist. Make proactive plans for training and further cleanup. Work with your counsel to assess potential liability and identify trends on Forms I-9 submitted to ICE. Understand what comes next during the lifecycle of an inspection and what type of violations you may be facing.
  10. ICE has increased the number of worksite investigations in 2018 by over 100 percent compared to previous years. As this author stated earlier this year, given stepped-up enforcement, the Administration's focus on immigration, and a newfound emphasis on interagency cooperation, 2018 continues to be a year for US companies to prioritize compliance in an effort to stay out of the crosshairs of a government investigation. Employers should be taking steps to prepare for increased I-9 compliance which were outlined in a prior Alert. Please feel free to contact the author, Dawn Lurie, at dlurie@seyfarth.com with any questions.

Footnote

1 NOIs notify companies that the government is going to audit their records to determine if they are complying with relevant immigration compliance laws. Under federal law, employers are required to verify the identity and employment eligibility of each of its newly hired employees, and must also reverify certain employees with expiring work authorization.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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