Documents at Hiring and Form I-9 Audits

Among other responsibilities in today's evolving regulatory landscape, HR professionals are tasked with ensuring compliance in hiring. Federal immigration laws mandate certain requirements, like Form I-9.

What Is the I-9 Form?

Form I-9 is mandatory for all U.S. employers and must be completed for every new hire, whether the hire is a citizen or a non-citizen. The form verifies the identity and employment authorization of the employee. Employers must retain these forms for a specified period and ensure they are available for inspection, if requested by authorized government officials.

Form I-9 Compliance Basics

• Section 1: This section is the responsibility of the employee and must be completed by the first day of employment. It calls for basic information specific to the employee: name, date of birth, address, telephone number, SSN, etc.
• Section 2: The employer completes this section within three business days of the employee's start date. This section lists the types of unexpired documents that the employee needs to provide to properly authenticate the answers to Section 1 and his or her work eligibility for work.

Pro-tip: Employers should avoid over-documentation in Section 2. Establish a policy of accepting not more than the required minimum number of documents necessary for compliance. Requiring a different number of documents for any one applicant may form the basis for a discrimination claim.

Preparing for an I-9 Audit

The Department of Homeland Security (DHS) or Immigration and Customs Enforcement (ICE) has the authority to conduct an audit of a company’s hiring documents, and such audits are on the rise.

An I-9 audit may be triggered by random selection, complaints, business license reviews, or suspicious employment patterns. Typically, ICE will issue a Notice of Inspection (NOI). The federal agency may have a subpoena for this information, but one is not necessary. In addition to employee files, ICE can request Company documents related to payroll, tax, and business formation (e.g., Articles of Incorporation).

In the absence of a subpoena or warrant, ICE must provide an employer with an NOI at least three business days prior to an I-9 audit.

To prepare for an I-9 audit, Employers are encouraged to:

1. Conduct an internal self-audit.
2. Correct mistakes properly (without backdating or using white-out); attach a memo for substantive changes and maintain the original form.
3. Ensure that I-9 forms and other employment specific documents are stored separately from medical records.
4. Train HR teams on compliance requirements.
5. Maintain an audit trail and seek legal counsel.

Following the Audit, ICE will issue the Company a notice of the results. Ideally, a NOI Results (aka “Compliance Letter”) is issued, which means the Company is complying with federal law. Otherwise, the Company might receive Notices of “Suspect Documents” or “Discrepancies” or “Technical or Procedural Failure.” These can lead further to a “Warning Notice” or a “Notice of Intent to Fine.”

Federal Penalties

Fines may be assessed for paperwork violations and knowingly hiring unauthorized workers. The penalties can vary from $272 to $27,018 per form or worker, based on the number and severity of instances of non-compliance.

Recordkeeping and Retention

Employers must retain I-9 forms for three years after the date of hire or one year after employment ends, whichever is later. These records must be stored securely and be accessible within three business days of an audit notice.

E-Verify

E-Verify is a voluntary (for private employers) federal electronic system that uses DHS and Social Security Administration records to validate employee eligibility. Employers sign a Memorandum of Understanding outlining their consent to certain obligations and responsibilities, such as notifying DHS if the Employer continues to employ someone who is subject of a final non-confirmation of eligibility. In exchange, the Company receives a rebuttable presumption that it has not knowingly employed an unauthorized worker who is subject to a final non-confirmation, which impacts the nature and degree of any applicable civil fines and civil or criminal liability for any action taken in good faith based on information provided through E-Verify. Note: some federal contractors or employers in certain states are mandated to use E-Verify.

HR professionals must be proactive in understanding and implementing I-9 compliance measures, including conducting annual internal audits, centralizing the I-9 administration process, and documenting compliance efforts. It is also important to regularly update and review onboarding training to ensure that the organization remains compliant. Should a question arise, employers should consult with employment counsel.

About the Author: James J. O’Connor is a member of Barrett McNagny’s Labor and Employment team. He has over twenty years of experience working with businesses on compliance matters and defending employment claims. He can be reached at jjo@barrettlaw.com or 260.423.8868.