Last week, U.S. Immigration and Customs Enforcement ("ICE") issued Notices of Inspection to 652 businesses throughout the United States to audit those businesses' I-9 records. The Notices alert companies that ICE will soon inspect their hiring records to determine whether or not they are in compliance with the employment verification and eligibility laws. The 652 Notices issued last week exceeds the total number of similar Notices issued for the entire 2008 fiscal year.
Under federal law, all employers (regardless of size) are required to use Form I-9 to verify the identity and work eligibility of all new employees (including U.S. citizens) at the time the employees are hired. Completed I-9 forms must be maintained by the employer, in hard-copy or electronic format, for three years after the employee's date of hire, or for a year after the employee's termination date, whichever is later. Completed forms are not submitted to the government, but must be retained by the employer throughout this period.
During an audit, an employer will be required to produce its I-9s for inspection to an ICE or Department of Labor investigator within three (3) days. Given this short time frame, it may not be possible for even small employers to review and correct all I-9 deficiencies. For example, if an I-9 form is missing or needs to be updated and an employee is out sick or on vacation, three days is likely not sufficient. Larger employers, which might have to review hundreds - or even thousands - of forms, will certainly not have enough time to do so in the three-day period.
Fines for having incomplete or missing I-9 forms can be substantial--up to $1100 for each technical "paperwork" violation, and up to $2000 for a first offense of knowingly hiring an unauthorized worker. Indeed, the day after announcing its I-9 crackdown, ICE issued a press release regarding a settlement with Krispy Kreme Doughnut Corporation following an I-9 audit at a Krispy Kreme doughnut factory in Cincinnati. As a direct result of the audit, Krispy Kreme agreed to pay a $40,000 fine and to take measures to revise its immigration compliance program.
Stepped up I-9 enforcement has only just begun. In its press release announcing the issuance of 652 Notices of Inspection last week, ICE candidly admitted that its actions are part of a "new, comprehensive strategy to reduce the demand for illegal employment and protect employment opportunities for the nation's lawful workforce." Thus, audits-- and settlements like that announced with Krispy Kreme--will soon become far more commonplace than in the recent past.
In this new enforcement environment, employers are urged to be proactive and conduct their own internal audits to ensure that they are complying with their I-9 obligations. As part of this audit, employers should ensure that there is an I-9 on file for all current employees hired after November 6, 1986 (the date the I-9 rules became effective), as well as for any employees terminated in the prior year. The audit should also verify that all I- 9s are complete, signed by both the employee and the employer, and that the necessary documentation has been inspected. If re-verification has not been conducted for any expired documents, the audit will likely uncover that problem as well. Finally, as part of internal I-9 audits, employers should purge from their files any I-9s that they are no longer legally required to retain. Conducting an internal audit and correcting any problems with I-9s will put employers in the best position to defend themselves should ICE ever decide to come knocking at their door.
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