Fines for I-9 Errors on the Rise

Originally posted June 10, 2014 by Scott Woolridge on

Fines resulting from I-9 audits have exploded in recent years, and immigration law experts say employers should put a high priority on making sure their policies and paperwork are in compliance.

“We have seen a huge increase in fines against employers, and we don’t think that’s going to go away,” says Loan Huynh, a shareholder with Minneapolis-based Fredrikson & Byron.

The fines are levied for failures in compliance with Form I-9. First created as part of the Immigration Reform and Control Act of 1986, I-9 enforcement saw a sharp uptick in audits and fines after a revision to the form in 2013.

ICE audited more than 1,000 businesses nationwide after that update. By comparison, ICE conducted only 250 audits in 2007. With the steady growth in audits and enforcement, businesses paid $13 million in fines by 2012.

Justin Storch, manager of agency liaison for the Alexandria-Virgini.-based Council for Global Immigration, also saw a jump in fines for I-9 mistakes.

“In general over the last several years, it has skyrocketed,” he says. “I’m guessing the numbers will be even higher in 2014 than it was in 2013.”

Storch says that among the issues emerging for employers is a crackdown on workers who might have been approved to work in the United States for a limited period of time, for example a conference or short-term assignment, who then continue to work after its ended.

“It really is important to do everything by the book, and don’t leave any holes open to let the government to come in,” Storch says.

The political stalemate over immigration reform only adds to the problem of ICE audits, according to a recent white paper from Talentwise. “With robust resources at its disposal (ICE is the largest enforcement agency within the Department of Homeland Security), and no clear legislative path to immigration reform in sight, experts predict the pace will continue,” the authors conclude.

Tips for employers

Huynh says there are several steps employers can take to protect themselves. She says having proper documentation — and backing that up with copies, is crucial.

“Under the law, if an employer has made paperwork errors or mistakes … if they have certain supporting documents, the law allows the immigration service to allow [employers] ten days to make corrections,” she says. “None of us are perfect, when we’re completing forms. You want to be perfect as possible, but you really need to make copies of supporting documents.”

The Society of Human Resource Management website has several tips for employers, including being compliant with deadlines.  For example, a new hire must complete Section 1 of the I-9 form on or before the first day of employment, while Section 2 of the I-9 must be completed by the employer within three days of the start date. Other important steps include having your policies in writing and a one person in charge of the process.

“The buck needs to stop with someone,” Loan says. If no one is tasked with ownership of the I-9 paperwork, it’s too easy for things to slip through the cracks. And the consequences of such mistakes can be very high.

Huynh’s firm also recommends semi-annual audits, preferably by a third party. She notes that if there’s an error in a company’s I-9 system, whoever created the system might be the last to notice problems.

“If you have the individuals who are responsible for your I-9 forms do your audit, they will perhaps continue to make the same mistakes,” she says. “It’s always helpful to have [an outside party] help you conduct the I-9 audit.”

Storch also strongly recommends getting an outside source to review your I-9 compliance.

“There are experts out there,” he says. “Immigration attorneys are probably your best resource as far as getting good information. They can help you stay compliant.”

Although there is a cost for using attorneys to help with I-9 issues, Storch say it’s worth it.

“I’m very aware that immigration attorneys can be very expensive, but it can save you money in the long run,” he says.

Huynh points out another benefit:  by using an immigration attorney, the audit can be kept confidential.

“Any findings made as a result of the I-9 audit, if it’s conducted by an attorney, it’s protected under attorney client privilege,” she notes.

The rules around I-9 forms can be very specific and sometimes confusing. For example, those filling out the forms must not use white correction fluid or black permanent marker. The person who fills out the form must be the person who signs it. Employers must retain any pages of the form which the employee and employer enter data. In short, that legal consultant might be a good investment.

The growth of E-Verify

Complicating the issue further is the growing use of E-Verify, a free online system that checks applicants’ I-9 information against the records of other agencies such as the Department of Homeland security and the Social Security Administration.

Many states now require the E-Verify for at least some types of employers. But in many cases, the use of E-Verify is a duplicative effort for businesses, and it requires even more information than the I-9 process.

However, Huynh says some employers like the E-Verify system because it provides another layer of security against employment fraud.

“Some employers feel comforted by the fact that they've done everything they can,” she says.

However, she noted it wasn’t a perfect system, “It’s not foolproof.”

Even with its flaws, Huynh expects the use of E-Verify to grow in coming years, “E-Verify is the future of employment verification eligibility, whether we like it or not.”