Creation and

Implementation of an

Internal I-9 Audit Program

NC CUPA-HR 2016 Spring Professional

Development Workshop

April 8, 2016

Contact Information

• Jill Blitstein, Manager of International Employment (IE)– 919.515.4518, jill_blitstein@ncsu.edu

• Stephanie Hines, Specialist in International Employment– 919.513.7525, stephanie_hines@ncsu.edu

• http://www.ncsu.edu/human_resources/intemployment/

• Main number: 919.513.3338

• IE is part of Human Resources at NC State, and is responsible for I-9 and E-Verify monitoring and compliance for the entire university

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Learning Objectives

• Latest guidance from Immigration and Customs

Enforcement (ICE) and the Department of Justice (DOJ)

on conducting internal I-9 audits

• Practical tips on various compliance strategies

(including mandatory training)

• Impact of an electronic I-9 system and how it changes

the monitoring and reporting process

• Example of an interactive “real world” audit that has

successfully spread the compliance message in a non-

threatening and engaging way

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Internal I-9 Audits

Guidance from the Government

I-9 Internal Audit Guidance

• In 2015, the Office of Special Counsel (OSC) for

Immigration-Related Unfair Employment Practices (of

the U.S. Dept. of Justice - DOJ) and the U.S.

Immigration and Customs Enforcement (ICE) unit of the

Dept. of Homeland Security (DHS) released “Guidance

for Employers Conducting Internal Employment Eligibility

Verification Form I-9 Audits”

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I-9 Internal Audit Guidance

• This is a MUST READ document for any institution

planning an internal audit!

• Six pages of Q&A format information

• Biggest takeaway: internal audits must not be

discriminatory or retaliatory themselves – criteria used

for own internal audit could itself potentially become

subject of federal audit or sanctions

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I-9 Internal Audit Guidance

• Several highlights (read entire document!)

– Clearly define purpose, scope and protocols first

– Notify employees in writing of the above

– Correcting errors: only employee corrects Section 1,

and only employer corrects Section 2 or 3• No white-out, erasing content or back-dating

– When to complete newest version of the Form I-9

– Employer may NOT request specific documents to

correct (or complete new) I-9 form

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I-9 Internal Audit Guidance

• Several highlights (continued)

– Cautions employers against requiring all employees

to complete new forms, if not justified – could raise

discrimination concerns

– E-Verify related guidance

– Must provide “reasonable” amount of time to allow

employees to provide documentation for I-9

– Social Security Number Verification Service (SSNVS)

is NOT to be used as ANY part of I-9 process

• See also January 2016 letter from OSC/DOJ

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Discrimination Violations

• Office of Special Counsel monitors and prosecutes most

I-9 discrimination violations, including citizenship and

national origin discrimination, document abuse,

retaliation

• Some violations are also under the jurisdiction of the

EEOC, based on Title VII of the 1964 Civil Rights Act

• There are court cases where employers owed back-pay

and fines for specifying which documents new hires had

to produce for the I-9 process

– Could also be true in internal audit context based on guidance

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Example of Discrimination Settlement

• OSC reached settlement agreement with Macy’s in June

2013:

– Macy’s agreed to pay civil penalty of $175,000 and

back pay of $100,000 to compensate individuals who

suffered economic damages because of Macy’s

employment eligibility reverification practices

– Macy’s was also subject to extensive monitoring by

OSC and reporting requirements for 2 years

– Fine line between ensuring proper work authorization

and avoiding discrimination

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ICE Audit and Compliance Trends

• Creation of Employment Compliance Inspection Center

(ECIC) to process I-9 audits of large employers in 2011

• Continued increase in audit and enforcement activities

– In FY 2013 (latest year available), ICE served 3,127 Notices of

Inspection (NOI) to employers

– Results of NOI’s: 637 Final Orders worth over $15.8 million in

administrative fines

– ICE made 452 criminal arrests tied to worksite enforcement

investigations; of these, 179 were owners, managers,

supervisors or human resources employees!

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Practical Tips on Compliance Training

and Audit Strategies

The NC State Experience

• Last federal I-9 audit: 2007

• No penalties, but were required to create and implement

an I-9 training program for campus

• First we did a sample I-9 audit on new I-9s coming to

Central HR in early 2008

– Decentralized originally, but then we centralized the I-

9 process for better control around 2006/2007

• Then we audited all I-9s in Central HR in 2009

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The NC State Experience

• Audit strategy in 2009:

– Reviewers were trained by IE, and were a select,

small group from Central HR only

– Reviewed every single form we could find

(approximately 16,000 over several months)

– Corrected what we could, and then reached out to

employees to correct or redo I-9 forms as necessary• Did not have rigid timeline for completion of new or corrected

forms, but monitored units for compliance

• Not a fun process – but was necessary

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The NC State experience

• In 2008 we created mandatory training for all HR people

processing I-9s across campus (and out in the

counties), based on first sample audit

– Approximately 400-500 people completed I-9 forms on behalf of

the university before 2012: way too many, with no training

– Created official University Regulation which required training by

IE before anyone was authorized to do I-9s on our behalf

• Had support of Administration, Office of General Counsel

• EVERYONE doing I-9s was required to attend: ouch!

• Training focused on the law, and then the process

– Created our “best practices” for Form I-9 completion

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The NC State experience

• Requested campus units specifically include I-9

responsibility in employee workplans

• Created email to send to supervisors to confirm I-9

training attendance by employees

• Provided immediate feedback to people completing

Section 2 when mistakes were noticed during review

– IE audited EVERY paper I-9 form upon receipt, from 2008-2012

• Process improved, but…started looking at electronic

systems to further increase compliance

– Major issues: lack of timeliness, foreign national document

confusion, incomplete forms

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Lingering concerns about compliance

• Possible penalties for I-9 noncompliance (mistakes, omissions, patterns of errors):

– Monetary fines/penalties

– Negative publicity

– Possible jail time, if government finds a pattern of discrimination or violations

– Time and expense of dealing with government audit

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I-9 Civil Penalties

• Failing to comply with Form I-9 requirements:

– Failure to properly complete, retain and/or make

available I-9 forms for inspection: $110 - $1,100 for

each I-9 form violation occurring after September 29,

1999• Proposed new fines: $500 - $2,000 per violation!

– Document abuse: currently $110 - $1,100 for each

person discriminated against after September 29,

1999

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I-9 Civil Penalties

• Recent decision from the Office of the Chief

Administrative Hearing Officer (OCAHO) – DOJ

– USA v. Anodizing Industries, Inc.

– May 24, 2013 (Case # 12A00030)

– OCAHO reduced the fines assessed to company by

ICE, but specifically noted that “failure to prepare an

I-9 in a timely fashion…is not only a substantive

violation but also a serious one...”.

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Electronic I-9 System considerations

• Concerns about penalties and continued compliance

issues led to transition to electronic (“smart system”)

solution for I-9/E-Verify compliance process

• Biggest issues: COST, COST and COST!

• Reviewed several systems (demos, etc.)

• NC State was able to piggy-back on RFP process of

UNC-Chapel Hill to get best price on same system

– Also used by UNC-Charlotte, Western Carolina University

• We were able to use one-time funds to purchase system

– Had to also find ongoing support for $3 fee for every I-9 form

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Electronic I-9 Systems and Compliance

I-9 Process at NC State

• NC State University moved to an electronic I-9 and E-

Verify system on August 1, 2012

• Only licensed (and trained) Users can access system

and complete electronic I-9 forms on behalf of NC State

– NO paper I-9s at NC State since 8/1/2012!

• Users were selected by College/Unit HR or Business

Officers and were/are required to attend I-9 and E-Verify

(re)training and I-9 system training

– We purchased a limited number of User licenses to be used

over the lifetime of the product (with the option to buy more)

– Once a license is issued, it can never be reused again

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Electronic I-9 System

• Benefits:

– Decrease in mistakes with a “smart system”: literally cannot

make certain errors anymore

– Ability to monitor status of I-9s in electronic flow on a

“dashboard” for easy viewing

– Can receive feed from HR system, so new hires can be (mostly)

timely fed into the I-9 system (but beware of payroll lockout!)

– Can handle remote hires via temporary access by others

– System can send reminder emails about expirations and

required reverifications with some customization

– CAVEAT: just a tool; still requires human inputs and daily usage

and monitoring – system cannot compel timely completion!

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Monitoring I-9 issues

• Can see I-9 and E-Verify process in “real time”

– Which employee has completed Section 1 but still

needs to complete Section 2; which employee hasn’t

even completed Section 1; which employee has 90

days to produce SSC after showing receipt; etc.

• Most systems automatically send I-9 data to E-Verify

and provide an interface with that system

• Can always see I-9, and view/print pdf

• Every action is tracked, date & time stamped

• Can change User access, if limitations needed

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Reporting Capabilities

• For the Users/Units, the dashboard is really the only

“report” they need to achieve and monitor their own

compliance

• Admin Users can create unlimited number of reports on

various fields as desired

• Excellent real-time information - but also creates

potential vulnerability in a federal audit

• NC State specifically uses reporting feature to track

timeliness completion rates, User data

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I-9 Process at NC State

• https://www.perfectcompliance.com/

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• Insert screen shots of Guardian system here (SH)

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Interactive “Real World” I-9 Audit

To encourage and foster better I-9

compliance by HR

Internal Audit of I-9 System Users

• NC State wanted to inspire better compliance and demonstrate seriousness of a real audit

– Decided to audit I-9 Users like ICE would: give 3 days notice, assess potential fines, discuss mitigating circumstances and good faith efforts

– Had senior HR/Business Officer schedule required meeting for unit I-9 Users without mentioning audit

• IE sent audit notice email 3 days in advance, and provided list of names of I-9s to be audited

• We chose 6-7 forms with issues to review as a group

• We provide estimated fine ranges – THAT gets attention!

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Internal Audit of I-9 System Users

• IE follows a script: we discuss what a federal audit would look like, then go through the I-9s with issues and tally the potential fine ranges– We remove the User names from Section 2 of I-9s

• We review the unit’s system dashboard together, and discuss the available resources to Users for assistance with I-9s at any time

• We distribute certificates to Users at the end: ‘I survived the I-9 audit of 2015-2016’

• We send follow-up email to review issues, but also highlight positive I-9 aspects and successes

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Internal Audit of I-9 System Users

• This audit requires no participation from employees who completed Section 1– Any issues have already been corrected at the time of (or

immediately after) completion, before this internal audit

• I-9s are selected for this audit based on type of I-9 mistake, NOT based on nationalities

• Units are selected for audit based on issues

• Users are first shown ‘clean’ I-9 form and we encourage them to find mistake(s) as a group; next slide has the errors circled and we discuss what was incorrect and how to avoid that mistake in the future

• We have received VERY positive responses afterwards!36

Summary: lessons learned

• NC State has conducted several I-9s audits (both paper

and electronic) in the last 8 years, and in our

experience:

– More errors are made on paper forms

– Perfect timeliness, while always the goal, is seldom consistently

achieved, even with electronic tools

– Centralization is very helpful, if feasible; limiting the number of

people who complete I-9s is even better

– Constant training and helpful resources are a MUST

– Electronic system has been huge step forward for us, but the

system is only as good as the people using it!

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Reference Page

• HR International Employment I-9 information: http://www.ncsu.edu/human_resources/intemployment/i9.php

• HR International Employment I-9 FAQs: http://www.ncsu.edu/human_resources/intemployment/i9_faq.php

• HR International Employment I-9 Guardian webpage: http://www.ncsu.edu/human_resources/intemployment/i9guardian.php

• HR International Employment E-Verify FAQs: http://www.ncsu.edu/human_resources/intemployment/everify_faq.php

• NC State PRR on Employment Eligibility Verification (Reg. 05.55.09): http://policies.ncsu.edu/regulation/reg-05-55-09

• USCIS I-9 form: http://www.uscis.gov/files/form/i-9.pdf

• USCIS I-9 main webpage: http://www.uscis.gov/I-9Central

• USCIS E-Verify main webpage: http://www.dhs.gov/e-verify

• I-9 Guardian system log-in webpage: https://perfectcompliance.com

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Questions?

Thank you!

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