On Nov 24 2009

ICE Releases its I-9 Inspection Overview and New Civil Penalties Schedule

Immigration and Customs Enforcement (ICE) has issued its “Form I-9 Inspection Overview,” to educate employers on Form I-9 audits, and alert the public of its new penalty schedule.

ICE’s Worksite Enforcement Unit released the I-9 Inspection Overview along with its announcement that it will issue a thousand new Notices of Inspection (NOIs) to employers, as Klasko reported on November 20, 2009.  Form I-9 is used by employers to verify the work authorization of new employees hired after November 6, 1986.

A complete description of the inspection and fine process, after the jump.

Employers are required to maintain an original Form I-9 and supporting documentation for all current employees.  Employers also must retain an I-9 file for at least 3 years from the employee’s hire date, or 1 year after the employee’s termination date, whichever is longer.  With ICE’s focus on worksite enforcement, it is more important than ever for companies to properly maintain their I-9 files.  Employers should review current I-9 practices and conduct an internal audit of their I-9 files for employees.

The I-9 inspection process starts with ICE issuing a Notice of Inspection, which compels an employer to produce its I-9 files, along with other documentation such as payroll records, lists of employees, and business licenses.  Since ICE normally allows only 3 days for an employer to produce these documents, the employer must have its I-9 files ready for inspection.  After ICE reviews the files, it notifies the employer of any technical or procedural violations.  For example, ICE can give notice that it suspects certain employees are unauthorized to work, and employers are given time to submit additional evidence.  ICE may alert the employer that it can’t determine an employee’s eligibility to work, and the employee is given time to submit evidence of his work authorization.  The employer also may have committed technical violations when completing its files.

If a review of the I-9 files reveals that the employer has violated the I-9 regulations, but ICE expects compliance in the future from the employer, ICE may simply issue a warning to the employer without assessing any civil monetary penalties.  If there is a serious I-9 violation, a pattern of noncompliance, or the employer fails to correct its I-9 files during an audit, ICE can issue a Notice of Intent to Fine (NIF) to the employer.

Fines assessed through an I-9 audit can be significant, depending on the type of violations listed in the NIF.  Under the new penalty schedule, fines range from $375 to $14,050 if the employer is charged with knowingly hiring undocumented workers.  The fines are calculated by determining the percentage of known unauthorized workers in the employer’s overall workforce.  The fines can increase if the employer is a 2nd or 3rd time violator.  If the employer commits a substantive violation, such as failing to keep adequate I-9 records, fines range from $110 to $1,100.  The fines are calculated by determining the percentage of substantive I-9 verification violations by the employer, and these fines can increase too if the employer is a 2nd or 3rd time violator.  ICE also can increase or decrease the fines based on the employer’s size, good faith, and history of compliance or noncompliance.  ICE may even prosecute criminally if the violations are substantial.

Once the NIF is served on the employer, it only has 30 days to negotiate with ICE and either enter into a settlement agreement, or request a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice.  The government will negotiate with employers on the fines through a settlement process, and immigration counsel can be invaluable during the negotiation process to mitigate fines and help show the employer’s good faith compliance for the future through the implementation of internal I-9 procedures.  If the employer fails to take action after receiving the NIF, ICE will issue a final order and the employer will have to pay the fines.  If the employer has requested a hearing, the case will be assigned to an Administrative Law Judge for a hearing on whether the employer committed a violation and whether the civil penalties were allowable.

Increased I-9 audits coupled with ICE’s prerogative to collect civil penalties from employers necessitate the maintenance of organized I-9 files.