1. AVOID SKATING ON THIN
ICE
Form I-9 Compliance, Audits,
Penalties and Appeals
2. Introduction
Speaker background
Session Overview
Employer’s Duty to Complete and Maintain Form
I-9
Common Errors and istakes
Recommended Compliance Policy Provisions
Benefits of External Audit
Responding to Enforcement Action
3. Duty to Complete and Maintain
7th
Edition– mandatory use May 2013
The new form is 2 pages
Page one completed by new hire no later than first
day of work for pay
Section 2 on page 2 completed by employer no
later than 3rd
business day the employee starts
work for pay
Section 3 on page 2 completed only if work
authorization expires
4. Section1
Employer Responsible to Verify:
Employee provided information in all required
fields
Employee signed and dated the form
Ensure preparer/translator section has been
completed, signed and dated (same date as
employees signed) if applicable
Note whether employee indicated whether
employment authorization will expire
5. Section 2, Employer Review and
Verification
Employer responsible for completing section
2 and must physically examine the
documents presented by the employee, and
sign the form.
Documents Lists:
A – identity & authorization
B – identity only
C – work authorization only
6. Examining Documents
If new employee presents documents that do
not appear to be genuine, reject the
document and ask for other documents that
satisfy the requirements.
If employee writes name that differs from
documents, ask employee for reason for
difference.
Attach a memo to I-9 explaining discrepancy
7. Section 3, Reverification and Rehires
Employer may complete Section 3 when:
Employee’s employment authorization or
documentation of employment authorization has
expired
Your employee is rehired within 3 years of the
date that Form I-9 was originally completed
Your employee changes his or her name
8. Correcting Form I-9
Employers may only correct errors made in
Sections 2 or 3
If you discover an error is Section 1, ask the
employee to correct the error
The best way to correct the form is to:
Draw a line through the incorrect information
Enter the correct information
Initial and date the correction
9. Retaining Form I-9
Date employee began work for hire
Add three years to that date: X
Date employment was terminated
Add one year to that date: Y
Which date is later: X or Y?
Employer must retain I-9 the later of the two
dates.
10. Storing Form I-9
No matter how you choose to store Form I-9,
you must be able to present to government
officials within 3 days.
Original Paper or Electronic
Include controls to ensure the integrity,
accuracy and reliability of ESS.
Include controls to ensure an audit trail so
that any alteration or change can be
accessed
11. Common Errors and Mistakes
M&D Masonry Case Study
March 11, 2014, OCAHO assessed penalty
of $228,000 to a Georgia construction
contractor based on a 2010 audit.
M&D produced 342 I-9s as result of NOI.
ICE issued NIF alleging 339 violations
87 failures to prepare and/or present I-9s
252 violations for failures related to Sections 1 & 2
12. Common Errors and Mistakes
OCAHO’s decision detailed the errors found
on the 252 Form I-9s:
34 failures to ensure employees signed the
attestation in Section 1
60 failures to ensure employees checked the
status box in Section 1
3 failures to ensure employees checked only one
status box in Section 1
13. Common Errors and Mistakes
10 failures to ensure employees who attested to
status as lawful permanent residents entered their
respective alien numbers (A#)
81 occasions where the employer representative
failed to sign Section 2
21 occasions where the employer failed to record
the issuing authority for a List B document
(driver’s license)
25 employer failures to provide the document
number for a List A, B or C document
14. Common Errors and Mistakes
7 occasions where the employer recorded
unacceptable documents or provided insufficient
information about a document
Based upon an 84% error rate, ICE assessed
a baseline penalty of $935 for each violation.
ICE enhanced the penalty 10% due to
seriousness of violation and the employer’s
large size, and reduced the penalty by 5% for
good faith.
15. Compliance Policy Provisions
Developing and implementing a written Form
I-9 Compliance Policy is critical. Five
essential elements:
Who is in charge of I-9 Compliance
How to complete the form to avoid common
mistakes
Should supporting I-9 documents be retained
Is the company using (or required to use) E-Verify
How should I-9 forms be stored and purged
16. Compliance Policy Provisions
Appoint an I-9 Responsible Officer
The larger the number of employees involved in
the I-9 process, the larger the I-9 error rate
RO last person to view I-9 before it is recorded in
any tickler system and filed
RO authority to go to HR employee who
completed Section 2 to correct any
mistakes/omissions
Maintain purge and re-verification
17. Compliance Policy Provisions
Mandate semi-annual training for all HR
employees that are tasked with completing
Section 2.
Review and revise all I-9 Reverification
Procedures
Conduct Annual Voluntary I-9 Audits
18. Benefits of External Audits
Historically self-auditing does not typically
reduce fines, and often result in additional
liability exposure caused by mistakes such
as:
Redoing all I-9s and throwing away originals
Separating document copies from Form I-9s
Making corrections without initialing and dating
Inserting backdated information
Failure to complete audit
19. Benefits of External Audits
External audit performed by counsel can:
Identify forms that need corrections and provide a
forum for all corrections to be made
Provide statistics on form error rates, instances of
particular errors, and incidences of errors for staff
members responsible for completing the form
Estimate civil fine liability
Uncover undocumented workers and missing I-9s
Identify I-9 forms that can be legally purged
20. Benefits of External Audits
Properly completed external audit can
provide good-faith defense to ICE audit
Start 5 year statute of limitations on corrected
substantive errors
Audit results may be protected from
disclosure under work product doctrine
Impact of Sarbanes-Oxley Act of 2002
21. Responding to Enforcement Action
Department of Homeland Security (ICE/HSI)
Office of Special Counsel for Immigration
Related Unfair Labor Practices
Department of Labor
Employers will generally receive a written
Notice of Inspection (NOI) at least three days
before the inspection
Contact LEGAL!!! Can obtain additional time
22. Responding to Enforcement Action
Employer must retrieve and reproduce
electronically stored I-9s
Provide officer with necessary hardware and
software to inspect electronic documents
Provide any existing electronic summary of
the information recorded on I-9s
Produce retained original paper Forms I-9
and any related documents
23. Responding to Enforcement Action
Notice of Inspection Results – “compliance
letter”
Notice of Suspect Documents
Notice of Discrepancies
Notice of Technical or Procedural Failures
Warning Notice
Notice of Intent to Fine
24. Responding to Enforcement Action
Companies may attempt to negotiate reduced
fines
Request review of fine by administrative law
judge (OCAHO) within 30 days of receipt of NIF
Appeal OCAHO decision to Federal Circuit
Court of Appeals
25. For Further Information Contact
Ryan J. Hatton
Halleland Habicht
33 South Sixth Street, Suite 3900
Minneapolis, MN 55402
612-836-5504
rhatton@hallelandhabicht.com
Editor's Notes
1986 / I-9 started / enforcement / documentation/ document fraud
Law practice – Wallmart 2005 – 11 million dollar fine for I-9 violations/ all subcontractors required to sign certification of I-9 compliance auditor
Federal law requires that all employers verify the identity and employment eligibility of all new employees within three days of hire. Completion of the form I-9 for all hires was made mandatory by the Immigration Reform and Control Act of 1986.
The employer also has a duty to not discriminate against an employee based upon national origin
May delegate responsibility to responsible agent, but retain liability for errors.
World’s most complicated 1 page form is no longer.
Today’s topic is important because routine I-9 paperwork violations can lead to thousands and even millions of dollars in fines, and other sanctions.
FY 2012 was a record year for Immigration and Customs Enforcement-Homeland Security Investigations (HSI), the agency charged with I-9 enforcement.
In 2012, HSI commenced 3,004 I-9 investigations and completed 495 investigations that resulted in charging $12,475,575 in administrative fines.
376 business were debarred.
HSI also arrested 520 persons in conjunction with these investigations, including 240 business owners, managers, supervisors and human resources employees, all charged with harboring and knowingly hiring undocumented workers
Few employers know that new hires are not required to list their social security numbers in Section 1 (unless the employer participates in E-Verify).
Employees can have help completing Section 1, including using a translator
Employer is obligated to make available the complete instructions to the form and the List of Acceptable Documents
Employer may need to reverify employee’s authorization when employment authorization expires. The employee will need to present a list A or List C document to show continued employment authorization for re-verification on or before the date their current employment authorization expires.
Note that the expiration date for employment authorization provided by your employee in Section 1 may or may not match the expiration date of the List A or List C docuemnts your employee presents for Section 2. for re-verification purposes, the earlier date should be used to determine when re-verification is necessary.
Employee chooses which documents to present.
Physical examination of unexpired original documents – does not include looking at documents via webcam during a remote on-boarding process.
Enter the document title, issuing authority, number(s) and expiration date from the original documents presented by employee.
Enter employer’s business name and address. If multiple addresses, use the address where Form I-9 is completed.
Date
Recommended to maintain a photocopy of the documents. Must return original documents to employee.
List A: US Passport, Permanent Resident Card (note do not reverify), EAD that contains a photograph
List B: Driver’s license, state id
List C: Social security card, EAD w/o photo, birth certificate US cit.
If employee presents a document in which his/her name is spelled slightly differently than the name written in Section 1, ask employee for reason. If it reasonable appears to be genuine, you may accept the document.
Ask employee to use full legal name in Section 1
Ask employee to correct I-9 and initial change; provide a different document with correct spelling
If employee wrote in Section 1 a completely or substantially different name from name on the document, ask employee for reason. If employee maintains that the name in section 1 is the legal name and you are satisfied the document relates to the employee, you may accept the document. Attach a memo to the I-9. If employee voluntarily provides proof of a name change, keep a copy with the memo.
If employee provides a document that does not reasonably appear to be genuine and/or relate to the individual, or if they cannot present other documents to satisfy the requirements of I-9, you may terminate employment
When employee’s employment authorization or EAD expires, you must re-verify to ensure employee is still authorized to work. Remind employees, at least 90 days before the date re-verification is required to present List A or List C documents.
Employers should not re-verify U.S. citizens, Lawful permanent residents that present a green card (permanent resident card), List B documents
Be sure to record the document title, document number and expiration date if any. Sign and date Section 3
If you previously completed Section 3, or if the version of the form you originally used is no longer valid, use Section 3 of current version.
Name changes: Not required to update Form I-9 When employee has a legal change of name. It is recommended that you maintain correct information on Form I-9 and note any name changes in Section 3. Ask employee to provide documentation of legal change of name to keep with Form I-9
To correct multiple errors, you may redo the section on a new Form I-9 and attach it to the old form.
A note should be included in the file regarding the reason you made changes or completed a new form.
Be sure NOT to conceal any changes on the form.
A way that suits your business needs.
The case originated after the Atlanta Journal Constitution published an article, “Illegal Hiring for Airport Construction,” in which an M&D foreman was quoted as saying M&D was employing undocumented workers.
After ICE read the article, it served a Notice of Inspection on M&D seeking the I-9 forms of current employees and employees terminated in the last three years. The contractor provided 342 Forms.
Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO)
Note benefit of retaining photocopies of documents – can correct errors.
Overall, ICE assessd 339 violations at $981.75 for a total of $332,813.25. The OCAHO reduced the fine to $228,000.
E-Verify is not a safe-harbor. It is simply an add on, and strict Form I-9 compliance remains an obligation of an E-Verify employer.
Some companies are required to utilize E-Verify, particularly those contracting with the government and subject to Federal Acquisition Regulations (FAR). Some service contracts with the state of Minnesota also require E-Verify certification
One of the most problematic issues for consistent I-9 compliance is the number of employees involved in the process.
The larger the number, the larger the I-9 error rate. One way to combat this problem is to create a funnel-like system, so that all I-9s are eventually the ultimate responsibility of only one person.
In addition, the Responsible Officer will be tasked with maintaining the systems that indicate when an I-9 can be purged and when an I-9 needs to be re-verified due to work authorization expiration.
The Responsible Officer should be provided with advanced training and should be given direct access to immigration counsel so that problematic documentation issues can be quickly resolved.
At first glance by a lay person, Form I-9 does not appear to be that complicated; however, experience has shown that there are dozens of mistakes that can be and are made during the I-9 process.
Error rates often run as high as 90%, even in companies that make compliance a priority.
One misguided piece of information can quickly become company policy, thus tainting an entire system.
Regular and repeated training for all individuals tasked with completing Section Two of the form is recommended to fully align an employer's real-world practices with its own I-9 policy, legal requirements, and changing government guidance.
Reverification of an employee's immigration status documents is required in specific instances, most notably when the document provides specific work authorization and contains an expiration date, such as for H-1B workers or those with Employment Authorization Documents. Failing to complete timely reverification in these instances may lead to inadvertent employment of a person who is no longer authorized to work in the United States. However, reverifying when it is not required or legally permitted is even more problematic. This most often occurs in the case of legal permanent residents who have provided their I-551 Card (green card) as evidence of work authorization and identity for I-9 completion.
Ill-advised remediation attempts can turn a technical error into a substantive error or worse – fraud, if there is intent to hide past mistakes. Further, commencing an audit without completing it can expose employer to fines for knowing and continuing violations
This kind of information allows a company to estimate civil fine liability, tailor training to particular staff, issues or locations and make meaningful changes to its I-9 process based upon the audit results. The audit may even uncover undocumented workers and missing I-9s, and will identify I-9 forms that can be legally purged.
Both technical and substantive errors can be identified and corrected.
Unlike self-audits, external audits results and related materials are confidential and not subject to disclosure if they reflect an attorney’s legal strategy and thought processes.
Investigations and audits may be protected from discovery if they are prepared “in anticipation of litigation.” They may be protected as long as litigation is reasonably anticipated and not merely speculative.
Courts have consistently held that “investigation by a federal agency, such as ICE – in light of its recent stepped-up enforcement activity, presents more than the remote prospect of future litigation.
The requirements of SOX put at risk companies who chose to involve managers and/or employees in the self-audit process. Conducting an audit under attorney supervision adds the protection that employees may not be required to disclose information pertaining to exposure uncovered by the audit, as may be required under SOX.
An I-9 investigation is initiated by the service of a Notice of Inspection (NOI) upon an employer compelling the production of Forms I-9. HSI allows three business days to present the Forms.
Often, ICE will request the employer provide supporting documentation, which may include a copy of payroll, list of current employees, Articles of Incorporation, and business licenses.
OCI – document abuse and immigration status discrimination
DOL – Labor Certifications, Labor Conditions Applications, Wage/hr – compliance/ H1(b) dependence
July 2013 – MUA between OCI and DOL to share investigation information
Compliance letter used to notify company that it was found in compliance
Suspect Documents – advises employer that based on review of I-9 and documentation submitted by the employee, ICE has determined that an employee is unauthorized to work in the US and advises of possible penalties for continuing to employ that individual
Discrepancies – advises employer that based on review ICE has not been able to determine work eligibility. The employer should provide the employee with a copy of the notice, and should give the employee an opportunity to present ICE with additional documentation to establish employment eligibility
Technical/Procedural failures – identifies technical violations and gives employer 10 days to correct. Uncorrected technical and procedural failures will become finable substantive violations
Warning Notice – issued in circumstances where substantive violations were identified, but circumstances do not warranty a monetary penalty and there is the expectation of future compliance by the employer
The Government's initial assessment is delivered in a document called a Notice of Intent to Fine. An employer may receive a monetary fine for all substantive and uncorrected technical violations. In determining penalty amounts, ICE considers five factors: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations.
Companies may attempt to negotiate reduced fines or request review of HSI's fine calculations by an administrative law judge at the Office of the Chief Administrative Hearing Officer (OCAHO).
Both of these strategies are often successful in reducing the amount a business must pay.
However, most settlement agreements include additional concessions such as regular HSI site visits for I-9 review, agreements to participate in E-Verify, ICE supervised in-house I-9 audits of other company locations, and HSI-led I-9 training of company personnel.
Press releases – ICE enforcement strategy
Recently, taking an appeal to OCAHO has been a very successful strategy for employers to reduce I-9 fines. Small businesses have been especially successful in reducing fines, often by more than 70% of the original assessment.
The HSI tendency when preparing a Notice of Intent to Fine is to use the highest multipliers possible regardless of the size of the business, often levying fines that will bankrupt or severely affect business operations. OCAHO provides a thoughtful and thorough review of the actual violations and requires the government to prove I-9 violations as well as justify fine amounts based upon HSI internal policy guidance.
Understanding the liability risks associated with I-9 compliance is the first step in motivating companies to take seriously their obligations. A clear written compliance policy, regular training and annual audits are best practices.
