What Triggers an I-9 Audit?
The word “audit” can strike fear in the hearts of HR professionals across the country. With increasing fines, an I-9 audit can turn a small mistake into a big cost.
Maintaining compliance and avoiding costly audits is one of the more complex aspects of working in HR. But don’t worry – we’re here to help you face those fears and understand everything you need to know about what can trigger an I-9 audit and what you can do to avoid it.
What is an I-9 Audit?
In November 1986, the Immigration Reform and Control Act was enacted, requiring employers to verify the identity and employment eligibility of their employees using Form I-9.
The U.S. Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) perform I-9 audits to ensure businesses comply with the law and maintain accurate records. If a company is audited and found non-compliant, it may face fines of up to $2,789 per form, among other penalties. As of June 28, 2024, these fines have increased. You can see the full list of increased penalties on the Federal Register.
Potential Triggers for an I-9 Audit
Now, let’s dig deeper into what can trigger an I-9 audit and how to mitigate your risk.
Flagged by Database
The DHS maintains a database of immigration and employment verification data. That database tracks trends and catches “red flags” to alert potential non-compliance. Some of those trends and red flags include:
- Industry: If you are in an industry that is at a higher risk of non-compliance, you may be targeted. This includes hospitality, retail, and agriculture.
- Geographic Location: Certain geographic “hotspots” are more likely to trigger audits.
- Previous Audit Data: Past errors or a history of non-compliance increase the likelihood of being audited again.
Mergers, Acquisitions, or Changes in Ownership
Transitions in business ownership can prompt I-9 audits to verify continued compliance.
This is especially important if the acquiring company decides to consider the seller’s employees “new hires” since there may be a lot of new I-9 forms to go through.
Complaints or Tips
Complaints are a common trigger for audits since they can come from various sources:
- Current Employees: If current employees discover evidence of incorrect I-9 management or the illegal hiring of undocumented workers, they may file a complaint. These reports are usually the most credible.
- Former Employees: Former employees may file a complaint if they are upset about their termination or if they believe they lost their job to an undocumented worker.
- Job Candidates: Candidates who were not hired may claim they lost the job to an undocumented worker or that immigration status was not properly addressed during the application process. These complaints often lack credibility, but they can still trigger an audit.
- Competitors: Business rivals may file complaints to disrupt operations, though these usually lack evidence.
Media Attention
Negative media coverage, especially related to immigration issues, can attract the attention of ICE and trigger an audit.
Other Government Agency Investigations or Audits
Government agencies collaborate to achieve their goals, so an investigation by one agency might lead to I-9 compliance scrutiny.
- IRS or Other Oversight Agencies: Other labor/workforce-related audits may reveal issues with I-9 compliance.
- Confidential Informants: Confidential informants provide information to the federal government in exchange for protection in their own federal case.
- Co-conspirators: Individuals involved in criminal activities like transporting or harboring undocumented workers may offer information about companies hiring undocumented workers to reduce their sentence.
What Happens If You Are Audited?
If your company is flagged for an audit, the process begins with a Notice of Inspection (NOI). Employers have at least three business days to produce the requested Form(s) I-9.
- Paper Process: If you are using a paper process, copies and scans of I-9s and other relevant documentation that employees provide for their I-9s must be provided.
- E-Verify: Employers using E-verify must make and retain copies of documentation presented by employees for List A of Form I-9.
- Other Procedures: Employers who use an alternative procedure with an employee must retain a clear and legible copy of all documents presented by the employee seeking to establish identity and employment eligibility for Form I-9.
Homeland Security Investigations (HSI) may also request additional documentation, such as payroll information, a list of active and terminated employees, articles of incorporation, and business licenses.
ICE inspectors will review it for completeness and accuracy. Discrepancies may result in warnings or fines, which are determined based on factors such as the size of the business, the number of previous offenses, and the severity of the infractions. If fined, your business is entitled to a hearing if you request one within 30 days of receiving the Notice of Intent to Fine (NIF).For a better understanding of the process, ICE provides a helpful flowchart on its website.
What You Can Do To Avoid An Audit
The best way to avoid an audit is to maintain up-to-date I-9 management procedures. Here are a few steps you can take:
Conduct Regular Internal Audits:
- Ensure that I-9 forms are completed accurately and on time in your current onboarding process.
- Review current and former employee I-9s for errors.
Understand common I-9 errors.
- Provide Training for HR Staff
- HR staff should have up-to-date knowledge of I-9 compliance practices and your company’s procedures.
Stay Informed
- Monitor updates from the U.S. Citizenship and Immigration Services (USCIS) website.
Use an Electronic I-9 Solution
Electronic systems can streamline the process and reduce the risk of errors. For example, Mitratech Tracker I-9 has maintained a perfect 20+ year record of zero client fines.
I-9 Audit Frequently Asked Questions
The outcome of an ICE audit depends on the findings. Here are the potential scenarios:
Positive Outcome:
- Notice of Inspection Results (Compliance Letter): This means your company is in compliance with I-9 regulations.
Negative Outcomes:
- Notice of Suspect Documents: ICE believes you may have employees who are not authorized to work. Further investigation is needed.
- Notice of Discrepancies: ICE cannot verify the employment eligibility of specific employees. You’ll need to provide additional documentation.
- Notice of Technical or Procedural Failures: I-9 forms have errors. You’ll have 10 business days to correct them or face more serious consequences.
- Warning Notice: Serious I-9 violations were found, but you have a chance to correct them and avoid fines.
- Notice of Intent to Fine (NOIF): Significant I-9 violations were found. You’ll receive a proposed fine and have a chance to appeal.
- Final Order: If you don’t appeal the NOIF or lose the appeal, you’ll face the imposed fines.
Remember: Even if you receive a warning or notice of discrepancies, it’s crucial to take the findings seriously and implement corrective measures to prevent future issues.
An I-9 internal audit is like a checkup for your company. It helps you:
- Identify and correct errors before ICE does
- Prevent costly fines
- Demonstrate compliance to employees and regulators
- Reduce the risk of litigation
Regular audits can help you stay ahead of potential issues and maintain a strong compliance posture.
Finding missing or incorrect I-9 forms can be alarming. Here’s what you should do:
- Don’t panic. Mistakes happen.
- Locate the missing form. Check employee files, off-site storage, or with the employee directly.
- Correct errors. If possible, correct the form. For significant errors, create a new form and attach it to the old one with an explanation.
- Complete missing sections. If Section 2 is missing, have the employee complete it.
Remember, it’s essential to correct errors promptly and accurately.
Every employee with a date of hire after November 6, 1986, must complete a Form I-9. This includes:
- Full-time employees
- Part-time employees
- Contract workers
- Temporary workers
Essentially, anyone working for your company needs an I-9.
ICE agents focus on several key areas during an I-9 audit:
- Completeness: Are all sections filled out correctly
- Timeliness: Were forms completed within the required timeframe?
- Document review: Do the documents presented verify the employee’s identity and work authorization?
- Retention: Are I-9 forms being stored properly and for the correct duration?
- Evidence of discrimination: Are there any patterns suggesting discriminatory practices?
By understanding these areas, you can better prepare for an audit and reduce your risk of penalties.
Audits Don’t Have To Be Scary – See How
Even with the best efforts, audits can still happen – but they don’t have to be scary! The key is to be proactive and prepared. If an I-9 audit occurs, having the right information and tools will help ensure it goes as smoothly as possible.
For more information on how Mitratech can help you stay compliant, schedule a demo with one of our team members to see our I-9 management solution in action.
