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Form I-9 Audit – Is it on Your Resolution List?

form-i-9-checklistAs the first quarter of 2012 kicks off, this is a time for many companies to look back at 2011 to celebrate success, access opportunities, set goals and make plans for the next fiscal year.  Opportunities may include new markets, new products, increases in advertising or research, reorganization and budgeting. For some employees it will be business as usual while others will take an active role in moving the business forward.

It is reasonable to assume most companies make decisions about the future by first looking to the past. Time is spent reviewing reports, looking at sales history, identifying trends and making plans to improve.   Audits are performed to check compliance with government regulations.  Industry standards are scrutinized and procedures are fine tuned to ensure goals are met.  The past will help pave the path to the future for many organizations.

At this time of reflection and planning many businesses are assessing their hiring practices.  History shows us the last 3 years were years of change for government enforcement of employment eligibility verification requirements.  Since 2009, employers large and small have been targeted for document investigations by Immigration and Customs Enforcement (ICE) and most are found to be out of compliance with the requirements of the Form I-9, Employment Eligibility Verification.

Form I-9 Violations are Costly

Non-compliance with Form I-9 requirements cost employers on average $900 per employee.  Many companies have paid fines well over $100,000! In addition to civil money penalties assessed by the government, the companies audited spent hundreds of man-hours, paid huge legal fees and suffered the public relations nightmare of being the target of an immigration investigation.

What is very important for employers to know about this government enforcement strategy is ICE is performing document inspections – not work site raids. During the ICE investigation each one of your employee’s Forms I-9 will be scrutinized and ANY ERROR, no matter how seemingly insignificant, will be penalized with a fine.  Most of the companies audited and fined last year did not knowingly employ illegal workers; they had simply made mistakes while completing the Form I-9. Their fines were simply for I-9 errors!

Even more infuriating is that most of the I-9 mistakes made could have been avoided with proper training and attention to detail.  I-9 rules allow you to repair many mistakes prior to a government inspection but you must be cautious about making the corrections within the rules.

Form I-9 Compliance Action Steps

As you make plans for 2012 it is prudent to put I-9 compliance toward the top of the list.  Schedule an independent I-9 audit, get professional training from a qualified Form I-9 expert, carefully make corrections before your business is audited by ICE, and develop an I-9 compliance plan as a measure of your company’s good faith attempt to comply with the requirements of employment eligibility verification and the Form I-9.

If you have questions about an independent Form I-9 audit, contact I-9 Okay today…before its too late.

Will I-9 Violations Cost Your Business?

i-9-violationsDuring July of 2009, Immigration and Customs Enforcement (ICE) initiated an I-9 investigation of Alyn Industries as part of an I-9 document audit initiative that is holding employers accountable for hiring practices. Alyn Industries (dba Electronic Source Company) manufactures printed circuit board assemblies for companies in the aerospace, military, medical, wireless and telecommunication industries. As of December 2010, they had 50 employees.

When Alyn submitted their Forms I-9 in response to the Notice of Inspection, ICE noted several deficiencies including Alyn’s failure to present Forms I-9 for 2 employees, failure to complete Section 1 for 1 employee and failure to complete Section 2 for 59 employees.  Based on the I-9 violations discovered during the audit, ICE issued a Notice of Intent to fine Alyn in the amount of $64,767.00.

When Alyn went to court they argued the fines were excessive because they are a small business, they had no previous violations and the company is a victim of poor economic conditions.  Alyn is a privately owned company that operates one worksite in California. Alyn also argued that they acted in good faith because after the ICE inspections they had enrolled in E-Verify and had instituted other I-9 compliance procedures.

In response to Alyn’s arguments, the judge reminded them the issue of good faith is based on whether the employer reasonably attempted to comply with its I-9 obligations prior to an ICE inspection. The important component of good faith depends on when the employer made the effort to comply.

In the end the judge ruled and Alyn Industries was ordered to pay $43,000 in civil money penalties as a result of Form I-9 violations.

Protecting your company from this type of action is a matter of proactively addressing I-9 issues through training, third-party audits, and compliance policies before an ICE inspection.  Once ICE issues a notice of inspection there is little you can do to mitigate the risk of fines.

Unfortunately many companies like Alyn Industries are doing too little too late to protect themselves against the penalties associated with a Form I-9 inspection.  Take action today. Contact I-9 Okay about Form I-9 training and independent I-9 audits.

Is the IMAGE Program Right for Your Business?

form-i-9-auditIt may be time to take another look at the Immigration and Customs Enforcement (ICE) IMAGE program.  IMAGE stands for “ICE Mutual Agreement between Government and Employer”.  IMAGE was created in 2006 as an initiative designed to encourage employer compliance and strengthen hiring practices in order to curtail the employment of unauthorized workers.

Based on its original design, IMAGE was heavily slanted in favor of the government and gave little to no incentive for employers to join the program.  The original program required an employer to submit to an ICE I-9 audit and be subject to the same penalty structure as non-IMAGE employers.  As of January 2011 only 115 of the over 10 million employers in the U.S. had joined the IMAGE program.

Recognizing the existing IMAGE program to be a dismal failure, the government revamped the program in 2011 and began an educational campaign to give employers information about the new and improved, kinder, gentler IMAGE program.

To be IMAGE eligible an employer is required to:

  • Enroll in the E-Verify program;
  • Establish a written employment eligibility verification policy that includes internal Form I-9 audits at least once per year; and
  • Submit to an inspection of their Forms I-9.

ICE agrees to:

  • Waive potential fines if substantive violations are discovered on fewer than 1/2 of the employers I-9s;
  • Where more than 50% of the Forms I-9 contain substantive violations, ICE will mitigate fines or issue the minimum fine of $110 per violation;
  • Not conduct another Form I-9 inspection of the company for 2 years; and
  • Provide information and training after the inspection.

So, should you consider the IMAGE program for your business?  Opening your doors to the government can be a scary prospect and it is certainly not a decision to be taken lightly.   It is a good idea though to follow the government’s advice even if you choose not to participate in the IMAGE program.

Having a written company compliance plan is smart business and may very well help establish that your company takes Form I-9 compliance and employment eligibility verification seriously.  Conducting an internal audit will help you establish your current level of compliance, correct some mistakes, and establish a training program to move forward with stronger procedures.  These are all best practices to protect your business and mitigate the risk penalties during an ICE investigation.

Whether or not you decide to join in a partnership with the Federal government it is absolutely appropriate for you to heed their advice when it comes to addressing your Form I-9 policies and procedures.

Notices of Inspection Served by the Feds

ICE served another round of inspections notices on November 4th. According to a statement released by the ICE department of public affairs:

ice-notice-of-inspection“U.S. Immigration and Customs Enforcement (ICE) issued Notices of Inspection (NOIs) to various employers on Friday, Nov. 4. These inspections are designed to determine whether or not the businesses are violating U.S. employment laws by hiring unauthorized workers. The names and locations of the businesses will not be released at this time due to the ongoing nature of the inspections.”

This type of action by ICE has become a last quarter tradition.  It seems every year as the leaves fall off the trees and people begin thinking of turkey and cranberry sauce, ICE crashes the party by issuing inspection notices to hundreds of employers.  These Notices of Inspection are demands for I-9 document records and give an employer a measly 3 days to collect and turn-over all of their current employees’ records as well as all of the employees who have been terminated within the last 3 years.

Once ICE receives the Form I-9 records from the employer, the entire audit process can take a year or more to complete and culminate in a Notice of Intent to Fine which outlines every error and omission discovered by ICE during the review of the documents.  Each error that cannot be corrected by the employer will be assigned a fine amount.  Fines often total tens of thousands of dollars, sometimes employers pay in the millions!

This is a cautionary tale.  If your business did not receive a Notice of Inspection this month, count yourself lucky…but it is no time to relax!

If history is any indicator, ICE will be back in the spring, issuing more notices and your business may very well be on their list.  Taking a proactive approach to managing your I-9 compliance includes conducting a comprehensive audit.  An experienced independent auditor can help you identify areas of non-compliance and assist you in developing a plan to repair the costly mistakes that are inevitable in most organizations.  Statistically, when ICE investigates, they find errors on over 50% of the I-9s they audit and each one of those errors costs you money.

Don’t be fooled into thinking you are immune from a worksite  inspection because you are not hiring undocumented workers.  Remember, ICE will inspect your I-9 process to be sure you are complying with the rules and regulations when you complete the I-9 form for each new hire.  The inspection focuses on Form I-9 compliance, not on looking for illegal workers.

You can help protect your business from the huge fines associated with an I-9 inspection by conducting an internal audit of your own I99 records BEFORE you are visited by government agents.  Put this on your “To-Do List” and move it to the top.  Spring will be here before you know it and the next round of Notices of Inspection will be issued.  Will you be prepared or will you be sorry?

Internal I-9 Audit…Living with a False Sense of Security

form I-9 complianceAs an I-9 Audit Specialist, I remain constantly flabbergasted at the complete lack of attention HR professionals give the Form I-9.  Every day I speak to HR managers who tell me in no uncertain terms that their I-9s are fine and they have nothing to worry about.

My response -  you have a false sense of security and your confidence bubble will likely burst when your company is audited by ICE agents and fined thousands of dollars for non-compliance!

How will you explain non-compliance to your boss?  Will you keep your job?  How will you answer the inevitable questions about your lack of attention to this very important matter?  Is “I didn’t know” going to save your company from bankruptcy and you from losing your job?

I have spent a lot of time trying to figure out why companies are so resistant to seeking help with their I-9 procedures.

Form I-9 Excuses:

  1. We only hire US citizens so we don’t have to worry about an immigration audit
  2. We did our own I-9 audit 2 years ago and everything was fine then
  3. We use E-verify so we are protected
  4. I’ve been in HR for 20 years – I know what I am doing and don’t need your help!

If you hear your voice in any of these answers, here is the reality:

  1. We only hire US citizens – The first thing to note is that unless you are a very small employer with less than 4 employees, you may be accused of discrimination.  It is unlawful for you to deny employment to an individual who is authorized to work in this country based on their citizenship or nationality.  It is important to remember that although the Form I-9 is regulated by Immigration and Customs Enforcement (ICE), it is required for every person you hire, regardless of nationality, and as such even companies that never hire immigrant workers are subject to the same fines and penalties as companies that do.  The I-9 is NOT an immigration form; it is an employment form that must be completed correctly and completely for EVERY PERSON YOU HIRE.
  2. If you have audited your own I-9s you get an “A” for effort but the unfortunate reality is you may have made matters worse.  ICE estimates employers who conduct their own internal audits actually create more issues and problems than if they had not done the audit at all. The problem is most companies that perform their own audit do it with no additional training or advice concerning correct completion of the form or allowable corrections to the form.  Also, it is often the same person or department that originally completed the form checking their own work, therefore perpetuating mistakes they don’t even realize to be mistakes.  Kind of like the fox watching the hen house.
  3. E-Verify is NOT a substitute for a correctly completed Form I-9.  In fact, during an audit, you may face additional scrutiny to be sure you are utilizing E-Verify correctly and following the rules.  E-Verify is giving employers a false sense of security when it comes to I-9 compliance.
  4. The Form I-9 was developed in 1986 and has gone through many variations to end up with the form used today.  The list of acceptable documents has changed, the attestation of work eligibility has changed, the rules governing expired documents, acceptance of document receipts has changed, and many other changes have occurred over the last 25 years. It is rare that I meet someone who has taken any continuing education or formal training concerning the Form I-9.  As with employment law, tax law, OSHA, HIPPA, and other regulations, it is imperative to stay current and seek up-to-date education and training concerning I-9 requirements.  Resting on what you learned 20 years ago is a recipe for disaster.

The Form I-9 should not be this complicated.  It is a one page form that on the surface appears to be easy to complete and just one more thing to do during the on-boarding process.  Unfortunately, because it appears so simple it is rarely given the attention it requires.

Hiring managers are rarely given any formal training to complete the form, and more often than not when a company’s compliance is audited by Federal agents, huge fines are accessed for simple, avoidable errors and omissions.

Just this past week, ICE released information concerning Form I-9 audits conducted in Maine.  Read the news story about this blueberry farm that paid $118,000 in fines for failing to record the hire date on the I-9. This is a very common clerical mistake we find on at least 50% of the forms we inspect during an independent audit.  Can you imagine being penalized over $100,000 for failing to write down a date? It is happening all over this country during ICE I-9 document inspections.

Action to Take to get Form I-9 Compliant

First and foremost, enlist the help of an I-9 specialist to assist you in getting the right training and performing a comprehensive I-9 internal audit.  At I-9 Okay we help companies everyday discover what true compliance means, develop company policies for managing the I-9 process, provide expert training, and conduct comprehensive Form I-9 audits to assess current compliance and move forward toward 100% I-9 compliance.

Stop living with a false sense of security and take action to improve your company’s I-9 compliance today!

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