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I-9 Audit: What To Expect

I-9 form is the Department of Homeland security form that is used for verification of employee’s eligibility accept employment in the United States. Here is the link to the I-9 form and instructions to it.

Starting from November 6, 1986, employers in the United States must complete the I-9 form for each employee (see below exceptions). From 1996 the government authorized the use of a project called E-verify which is used to determine employee’s eligibility through comparing information reported on I-9 form to the Social Security Administration and Department of Homeland Security databases.

Participating in E-verify is optional for most of the employers. However, those who chose to participate in the e-verify program, have to comply with its requirements. E-Verify is the only Federal electronic employment verification program available to employers to validate the lawful employment status of new hires. The Federal government has made changes to this system since its inception in 1997 and continues to make and plan for additional enhancements.

Like with any government regulation, once imposed, there will be checks or inspections for its compliance. I-9 audit is getting more and more common not only amongst the large employers but amongst the medium and small size employers as well. A company can be selected for audit randomly or as a result of reporting by some agency. Those companies that participate in e-verify might be selected if there are numerous violation during the use of the program: many pending cases that should have been closed; multiple profiles for the same individual; discrepancies in the dates of hire, etc.

First, an employer will receive a notice of audit with the list of documents that should be provided to the auditing body within a specified time. Then, after the compliance the auditing body is likely to request additional documents (as it usually takes several months for them to examine all the documents). Most often, in the end, an employer will receive a Notice of Intent to Fine.

The I-9 inspection purports to verify compliance with the I-9 form regulations. First and for all, the form must be completed by both the employee and the employer. The employee has to complete the I-9 form no later than the first date of employment. (It means that the form can be completed earlier than the first date of employment but only if employee accepted the offer of employment). Employment is defined as the first day of work in exchange for wages or other remuneration. For the hire date in E-Verify, an employer should enter the ‘employee’s first day of employment’ date from the ‘Certification’ in Section 2 of the employee’s Form I-9.

Section 2 of the I-9 form must be completed no later than the third business day from the date employee was hired. While completing Section 2, an employer must examine originals of the documents confirming eligibility for employment. Important: an employer cannot specify which documents an employee may present to confirm his or her edibility. The list of documents I supplied on from I-9.

After the form I-9 is completed, an E-verify case has to be created and it should be created no later than the third business day after en employee starts work for pay.

Exceptions to I-9 compliance:

An employer does not need to complete I-9 form for the following employees:

  • Hired on or before November 6, 1986
  • Employed for casual domestic work in a private home on a sporadic, irregular, or intermittent basis;
  • Independent contractors;
  • Providing labor to you who are employed by a contractor providing contract services (e .g ., employee leasing or temporary agencies); or
  • Not physically working on U.S. soil

See further: Who needs to complete Form I-9: Q&A from USCIS

Due to the numerous technicalities an employer must observe while completing the I-9 form and managing the E-verify database, the probability that the audit will find mistakes and impose penalties is very high, some say there are mistakes in 76% percent of paper I-9 forms. What are the penalties for the I-9 violations an employer may face?

Civil Fines and Criminal Penalties for Form I-9 Violations

Civil Violations First Offense Second Offense Third Offense
Minimum Maximum Minimum Maximum Minimum Maximum
Hiring or continuing to employ a person, or recruiting or referring for a fee, knowing that the person is not authorized to work in the United States. $375 for each worker.$3,200 for each worker. $3,200 for each worker.$6,500 for each worker. $4,300 for each worker.$16,000 for each worker.
Failing to comply with Form I-9 requirements. $110 for each form.$1,100 for each form. $110 for each form.$1,100 for each form. $110 for each form.$1,100 for each form.
Committing or participating in document fraud. $375 for each worker.$3,200 for each worker. $3,200 for each worker.$6,500 for each worker. $3,200 for each worker.$6,500 for each worker.
Committing document abuse. $110 per violation.$1,100 per violation. $110 per violation.$1,100 per violation. $110 per violation.$1,100 per violation.
Unlawful discrimination against an employment-authorized individual in hiring, firing, or recruitment or referral for a fee. $375 per violation.$3,200 per violation. $3,200 per violation.$6,500 per violation. $4,300 per violation.$16,000 per violation.
Asking an employee for money guaranteeing that the employee is authorized to work in the United States, also called an indemnity bond.
  • Pay $1,100 for each bond the employee paid to the employer.
  • Refund the employee the full amount of the bond. If the employee cannot be found, this refund will go to the U.S. Treasury.
Civil Violations First Offense Second Offense Third Offense
Engaging in a pattern or practice of hiring, recruiting or referring for a fee unauthorized aliens.
  • Up to $3,000 for each unauthorized alien.
  • Up to 6 months in prison for the entire pattern or practice.
  • Up to $3,000 for each unauthorized alien.
  • Up to 6 months in prison for the entire pattern or practice.
  • Up to $3,000 for each unauthorized alien.
  • Up to 6 months in prison for the entire pattern or practice.

It is obvious that the penalties may "swallow" any business. That is why it is essential that an employer conducts regular self-audit for the I-9 compliance; and, once receives a notice for inspection , consults with an experienced counsel ASAP.

The strategies of addressing the audit findings will be discussed in our future publications.

Government resources for E-verify:

E-Verify User Manual for EmployersDecember 2013
E-Verify User Manual for E-Verify Employer AgentsDecember 2013
E-Verify user Manual for Corporate AdministratorsSeptember 2013
E-Verify Quick Reference Guide for EmployersSeptember 2013
E-Verify Quick Reference Guide for E-Verify Employer AgentsSeptember 2013
E-Verify Supplemental Guidance for Federal ContractorsSeptember 2012
E-Verify Quick Reference Guide for State Workforce Agencies (SWA)September 2013
E-Verify Quick Reference Guide for Clients of E-Verify Employer AgentsSeptember 2013
E-Verify Enrollment Quick Reference GuideSeptember 2012
E-Verify Enrollment Guide for State Workforce Agencies (SWA)April 2008
How Do I Use E-Verify - "How Do I" Guide for EmployersAugust 2008
M-274, Handbook for EmployersApril 2013
Self-Assessment Guide for E-Verify Web Services UsersJune 2012
Self-Assessment Guide for E-Verify Direct Access UsersJune 2012
Supplemental Guide for Web Services UsersDecember 2013
Training Requirements and Guidelines for Web Services UsersDecember 2013

I-9 Audit: What To Expect: Lawyer's Publications

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