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Tips for Dealing with I-9 Audits

Written by  Scott Saier
35-TipsForDealingwI9The best way to avoid a Form I-9 audit is not to try and avoid an I-9 audit. That approach may seem paradoxical— and understandably so. But immigration is a political hot potato right now, and according to the U.S. Department of Labor (DOL), building-service contracting is classified as a “fissured industry,” or one with varied organizational methods of employment, such as franchising, subcontracting, and independent consultants. Given this, the likelihood of a visit from the DOL, Immigration and Customs Enforcement (ICE), or another federal agency is more likely now than ever. All it takes is an anonymous tip from a disgruntled worker, a dissatisfied customer, or a spiteful competitor, and your company—large or small—has three days upon notice before an auditor steps in to scrutinize your hiring practices.
The intensity with which government agencies are increasing their I-9 audits and the strategies they are employing, particularly under the Obama administration, lead some to believe that audits might someday become a mandatory annual procedure, or at least a random one, requiring no provocation or speculation. The Department of Homeland Security (DHS) alone has declared a planned minimum of 2100 audits in 2012, and the ICE has certainly stepped-up not only the amount of their investigations, but the manner in which they target companies under question. According to the Society for Human Resource Management (SHRM), the Bush administration ICE’s focus was on targeting, interrogating, and deporting unlawful employees; however, under President Obama, ICE has increased I-9 audits on employers, leading to administrative fines, and in some cases, criminal prosecution.
Of course, every business owner or manager would rather concentrate their resources on bettering the product, honing their service, and satisfying the customer. But how can that be done in confidence with the very real and serious possibility of fines and litigation? The U.S. Citizenship and Immigration Services website lists the penalties at risk: failure to comply with Form I-9 requirements, or committing document abuse brings a minimum fine of $110 to a maximum of $1100, per form; hiring or continuing to employ a person, or recruiting or referring for a fee, knowing that the person is not authorized to work in the United States lands fines between $375 and $3200, per worker, and up to $16000 on a third offense; engaging in a pattern or practice of hiring, recruiting or referring for a fee unauthorized aliens, up to $3000 per unauthorized alien, and up to six months in prison on the very first offense.
While it may be impossible to completely avoid an I-9 audit in today’s political climate, it is possible to anticipate and alleviate the damages should one occur. To begin instilling a culture of compliance, it would be wise to adapt four fundamental practices to streamline your company’s I-9 process and employment procedures: Education, Preparation, Awareness, and Thoroughness.
Education: Whether your company has a staff of 10 or 10,000, it’s highly important to educate as many employees as possible in the practice of filling out an I-9 form. Obviously, large companies and corporations have the benefit of a well-staffed HR department, but it would be prudent to train all personnel responsible for filling out, filing, and documenting I-9s. To best prepare, the smallest businesses should consider their entire staff as the HR department. Though it might seem a little excessive to educate every employee on how to read and fill out a form, this particular form has proven to be deceptively simple for employers to properly fill out. But the difficulties that arise, along with the consequential discrepancies, all boil down to a lack of sufficient training.
For assistance with your training, ICE is offering the IMAGE (ICE Mutual Agreement between Government and Employer) Certification program, a classroom-based training regimen for administrative and employment teams. Furthermore, the USCIS website provides a free copy of the I-9 form, available for download in English and Spanish, to be used for both the learning process and official employment procedures. A free handbook for employers is also available for download.
Preparation: Once your staff knows how to properly fill out and document an I-9 form, they’ll see how easy it is to make mistakes. And preparation isn’t just about filling out new I-9s correctly—it also involves reviewing every existing I-9 form, of both current and past employees (terminated within the past three years), making sure all the information is verified and accurate. Upon the arrival of the auditor, any relevant forms and data should be readily available and easily accessible.
A quite logical, but often overlooked step in preparation is making sure the forms are filled out by every employee, regardless of classification, and more importantly, making sure they’re filled out on time. The employee must fill out his or her form on or before the first paid day of employment. The employer then has three business days to examine and authorize all related forms and documents. These time frames must be adhered to, particularly by small businesses, which often don’t have the benefit of an HR department.
The most effective way to prepare your business for an I-9 audit is to perform an internal audit. If a BSC opts not to take the more bureaucratic route of participating with IMAGE, or it’s free online counterpart, E-Verify, then they are faced with the daunting, yet necessary task of sitting down with their files and going over each one of them (or at least a completely random sample), and making sure they’re filled out and retained in a proper fashion. Such self-audits should be performed at least once a year. These will enable BSCs to become more comfortably prepared, which will then enable better awareness of compliance policies and preventative practices.
Awareness: With education and preparation comes an increasingly inherent awareness of whether your business is in compliance with I-9 policies. The ICE, DHS, IRS, and DOL are all capable of, and within their jurisdiction to, perform an audit. And according to SHRM, ICE has been known to investigate a business for months without their knowledge or consent before serving a notice of I-9 inspection. Fortunately, it’s also important to be aware that these agencies, if upon investigation find a culture of at least attempted compliance, will appease some of the sanctions or fines and will typically work with the companies at bettering their I-9 practices.
One of the most important matters to be aware of, and something that is often overlooked in the BSC industry, intentionally or out of ignorance, is employee misclassification. In the past, some BSCs have classified unauthorized workers as independent contractors for tax purposes or to shield themselves from any legal prosecution. These mistakes can levy huge fines, and are one of the easiest things to root out with an internal audit. Internal audits are not a panacea of compliance, but they are the most effective way to highlight a BSC’s discrepancies, and make them easier to identify and prevent in the future.
Thoroughness: It should be mentioned that when dealing with an I-9 audit, thoroughness is a double-edged sword. While BSCs want to cover all of their bases, if they’re not careful they can be at risk of discrimination lawsuits that can result in hefty fines and even lawsuits. A healthy dose of thoroughness by any management team in regards to staff maintenance is certainly important, but it should be limited to the self-auditing process and not so much the employment screening. A blog for Hireright.com, a employment screening news and education website, offers a few tips for avoiding I-9 discrimination: do not dictate which documents the employee must present during the screening process, instead allow them to choose one from the list of acceptable identification documents; be sure and treat permanent residents and authorized aliens exactly how you would treat a U.S. citizen (this is in accordance with the Immigration and Nationality Act); be sure not to ask for more documentation than necessary; and make sure to provide equal training and education for all employee classifications.
A Culture of Compliance
Attaining an absolute culture of compliance might seem like an endless task, but it should only take one or two internal audits to identify most detrimental patterns or lingering mistakes. No BSC, regardless of their size, wants to exert this much time and energy to a task they might deem counterproductive to their company’s goals. But bear in mind that I-9 audits are becoming more of a standard in an era where immigration is one of the most contentious political issues in both state and national campaigns. It’s not just a handful of businesses that are being targeted; it’s all of them, especially those that are “fissured.” To this end, don’t assume that you’re losing out on valuable contracts or wasting crucial marketing funds by devoting attention to I-9 audit preparation.
Things may get easier, as I-9 policies are susceptible to change. This year, the USCIS released a report claiming that organizations spend an estimated one-million hours per year on Form I-9 management. In acknowledging that overwhelming number, they have asked the public and affected agencies to submit comments and suggestions addressing desired changes to I-9 forms and enforcement. For the time being, however, some BSCs will continue to suffer from the negative ramifications of I-9 violations, while companies that are in compliance will have the opportunity to focus on more important issues—like growing their businesses.


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