Is I-9 Manager Worth It? ICE Audit Results in $228,000 Fine

Are Form I-9 paperwork violations really that expensive? The answer is yes - and they can cost your business more than $228,000. An assessment by the Department of Justice (DOJ), Office of the Chief Administrative Hearing Officer (OCAHO) resulted in an I-9 related penalty of over $228,000 to a Georgia construction company. This is one of the larger fines issued by Immigration and Customs Enforcement (ICE) for such violations, and it was even below what they originally assessed, which was a fine of nearly $332,000.

This recent case reveals a few lessons about how to treat your Forms I-9 and emphasizes that employers must be compliant with every letter of the law before they come under investigation by ICE.

ICE has been hitting companies hard with I-9 audits in recent years, with seemingly no intention of slowing down. Audits of employer I-9 forms increased from 250 in 2007 to more than 3,000 in 2012, an 1100% increase over a five-year period. Fines for simple errors, such as incomplete forms, range from $110 to $1,100 per violation. Fines increase to $375 to $14,050 per violation for knowingly or continuing to employ unauthorized workers. In 2012, ICE handed out more than $13 million in fines based on violations discovered during these audits. Big and small businesses alike are all susceptible to having ICE audit their records for potential compliance issues.

While some employers think they can cut corners with Forms I-9, many don't realize the plausible threat of an ICE audit. Employers should not be fooled into thinking that the I-9 auditor is harmless. Auditors are trained to scrutinize company documents and practices and gather evidence of wrongdoing to prepare a case against the employer. Even if employers have not hired unauthorized workers, they can still be fined for not complying with I-9 record keeping requirements. I-9 audits don't focus on the employees themselves as much as the employers’ proper completion of Forms I-9. This means that even a company immaculate in its hiring of authorized workers may still receive large fines due to Form I-9 errors. According to Montserrat C. Miller with Arnold, Golden, Gregory LLP, M&D Masonry’s audit came about when a story was released in 2010 that featured a secretly taped conversation in which the foreman discussed hiring illegal workers. Following the release of the story, ICE sent a Notice of Inspection to the construction company requesting three years’ worth of employment records, payroll data, wage and hour reports among other files.

ICE brought two counts against M&D Masonry. Count I alleged that M&D failed to ensure that 277 employees properly completed section 1 of Form I-9 and/or failed itself to properly complete section 2 of the form. Count II alleged that the company failed to prepare and/or present the forms for 87 employees. Though the construction company was brought to ICE's attention following a report about undocumented workers, all of the fines assessed against the construction company stemmed from paperwork violations.

ICE found that M&D used a rubber stamped signature in Section 2 for a large number of Forms at a time the rest of the Form was entirely blank. OCAHO found that this practice fails to reflect a reasonable attempt by M&D to comply with its I-9 obligations and constitutes “false attestation.” According to ICE, fines are determined by adding the total penalizations assessed for knowingly hiring and continuing to employ violations, with the fines for substantive or uncorrected technical violations.

Lessons and Takeaways For Employers

According to this article, there are a few key takeaways from this case:

• Know what those in the field or on-site are doing (specifically those with hiring authority) because their actions can hurt the company. Also, no one other than principals or a designated spokesperson should be authorized to speak with the media.
• Often times, especially where there is high turnover or high volume hiring, employers try to streamline the I-9 process in different ways. One way may be to pre-populate the employer information section in section 2 of the Form I-9. That can be acceptable depending on how it is done, but it is never acceptable to pre-sign section 2 of the Form I-9.
• Have a Form I-9, properly completed, for each current employee. Civil paperwork penalties for the Form I-9, which range from $110 to $1,000, can quickly add up due to aggravating factors and therefore they are never really $110 per violation
• Last but not least, have a trusted partner like OPENonline. Our I-9 Manager provides a single solution for electronic employment eligibility management. By allowing employers to complete and store Form I-9 documents online, I-9 Manager ensures accurate data entry while saving time and reducing paperwork. Plus, I-9 Manager seamlessly integrates with E-Verify to satisfy state and federal regulatory requirements. In short, I-9 Manager helps protect employers from government audits, financial penalties and negative publicity by maintaining compliance with continually changing state and federal regulations.

For more information on OPENonline’s I-9 Manager, contact us now »

Sources

http://www.ice.gov/news/library/factsheets/i9-inspection.htm

http://www.lexology.com/library/detail.aspx?g=5ff6a5d3-6075-4624-9c32-b0daa4d84557

http://www.lexology.com/library/detail.aspx?g=948773fd-2353-4af6-9fd6-01ee1c15853f

http://www.justice.gov/eoir/OcahoMain/publisheddecisions/Looseleaf/Volume10/1211.pdf