Think an I-9 investigation won’t happen to your company? Think again.

L. Ruth Clark
L. Ruth Clark 15 May, 2019

All companies, regardless of size, sector or type of workforce, are subject to investigation by Immigration and Customs Enforcement (ICE), to verify that their employees are authorized to work and that they have properly completed I-9 forms for all employees hired after Nov. 6, 1986. A company that receives a notice of inspection must be able to produce its I-9 Employment Eligibility Verification forms within three business days. If you’re an HR manager and ICE comes knocking, are you prepared?

ICE is dramatically ramping up investigations of all types of employers for I-9 violations. An electronics company was raided last month in the largest workplace immigration sweep in a decade. Notably, the investigation preceding that raid began as an inspection of the company’s I-9 forms after ICE received multiple tips that the company, a Texas office owned by New Jersey-based CVE Technology, may have hired undocumented workers presenting false IDs. The I-9 audit uncovered “numerous hiring irregularities,” according to ICE, leading to a raid in which nearly 300 employees were arrested.

I-9 violations can lead to steep fines, but a regular review can help employers detect errors and avoid penalties. A recent decision in which a New York cleaning company was assessed $44,000 in fines for I-9 violations is a wake-up call for companies to audit their I-9s as soon as possible. Companies should also consider establishing best practices and implementing written I-9 policies and train their staff. Even though the New York employer’s violations all occurred before a new schedule of higher I-9 penalties took effect in 2016, the I-9 errors remained uncorrected and were therefore deemed to be “continuing violations” that carried over into 2016. As a result, the company’s fines were assessed under the increased range of penalties—double the previous range it would have been assessed had it discovered and fixed the errors earlier.

When it comes to the 1-9 compliance minefield, however, good intentions and self-audits can sometimes do more harm than good. One example, where missteps are common, is when a company’s self-audit turns up I-9 errors and HR tries to correct them. HR must make sure the correction is both accurate and adheres to appropriate procedures, particularly where a new I-9 form is created to correct an original, which must still be retained on file. Since penalties are assessed for each noncompliant I-9 form, they can quickly multiply if, for example, HR applies the same incorrect procedure across multiple I-9 forms. For these reasons, companies should not try to audit themselves and should engage an attorney who specializes in I-9 compliance.

In addition to costly fines, companies risk reputational damage for I-9 noncompliance. The Trump administration has not been quiet in raiding employers—it’s using a bullhorn and amping up the volume. Early on, the administration promised to prioritize investigation of employer abuse in visa programs. The April 2017 “Buy American and Hire American” Executive Order directed federal agencies to protect American workers through various measures, including greater scrutiny of employers. In September 2017, ICE levied a whopping $95 million settlement with a nationwide tree company for I-9 violations, including both civil and criminal fines. The settlement also put employers on notice that immigration authorities would leverage reputational harm and violators should expect their names to be splashed across the news. Asplundh Tree Company has become a poster child of I-9 noncompliance. No company wants to be the next example.

Shortly after the settlement with Asplundh, ICE announced that it would quadruple workplace investigations—and it has made good on that promise. From 2017 to 2018, I-9 investigations increased 340%, workplace criminal arrests rose 460%, workplace administrative arrests jumped 787% and the number of workplace enforcement cases initiated increased 305%. New cooperation and information-sharing agreements between federal agencies including the Department of Homeland Security, the Labor Department and the Justice Department mean that a company’s violation in one area of the law could turn into an investigation into other areas.

Companies regularly audit their financial and tax records as part of their routine compliance regime. The same should be true of I-9 records. An I-9 review is an essential business practice, especially in the current enforcement-heavy environment.

L. Ruth Clark is a Partner in the Houston office of Berry Appleman & Leiden LLP.

The information contained here is meant to be informational, and while BAL has made every effort to ensure the accuracy of the information, it is not promised or guaranteed to be complete. Readers of this information should not act upon any information contained on this alert/blog without seeking professional counsel. This alert does not constitute legal advice or create an attorney-client relationship. Any reference to prior results, does not imply or guarantee similar future outcomes.