surviving an i 9 audit shrm april 2014 - schedschd.ws/hosted_files/calshrm2014/a2/surviving an i-9...

Cynthia J. Lange, Partner April 2014

Surviving an I-9 Audit

© 2007 Fragomen, Del Rey, Bernsen & Loewy, LLP 2

I-9 Compliance

• Marked increase in audits and fines• Including critical infrastructure,

government contractors, industries with high concentration of immigrant labor, and others

• Don’t “play the odds”: audits and corrections do matter!


Foundational I-9 Principles

• I-9 for every “employee” hired after November 6, 1986– Who is an employee?

• Contractors, consultants, partners?

– Who is a re-hire where the old I-9 can be used?

• Must maintain for the duration of employment and the longer of one year post=termination or three years post-hire date


Tips for Section 1

• Completed on or before first day of hire • Completed by all new hires, including temporary or

part time workers• Completed for everyone “working” in US, regardless

of payroll, not completed for people working outside the US, regardless of payroll

• Only Border commuters from Canada or Mexico may provide international addresses, no PO Boxes

• If employee checks Alien Authorized to work must provide “USCIS Number” or “A-Number”


Tips for Section 2

• Section 2 must be completed within 3 business days from date of hire

• Employee must be Physically Present and Original Documents must be reviewed in-person

• Be sure to verify Identity and Work Authorization

• Person who reviews original documents must sign section 2 of the I-9

• Employer may delegate Section 2 review and attestation to non employee (e.g. for remote hires)


Document Tips• All documents presented must be unexpired (after

4/3/09)• ID card must be issued by a federal/state/local

government agency• Voter’s registration card need not have photo to confirm

identity (but see special rule for E-Verify)• Social Security card not acceptable for work

authorization if it contains notation “Not Valid for Employment” or “Valid with INS [or DHS] Authorization only”

• Laminated cards are acceptable unless otherwise prohibited by language on the card

• Birth certificate must be issued by state or local government authority (not hospital issued)


Auditing and Defending Your Clients’I-9 Forms

• “Substantive” vs. “Technical and Procedural”– ICE Operational Guidance, November 2008,

(Regulations pending)– Before any audit or negotiations with ICE on

a NOIF start with this guidance


Substantive Errors

• Failure to prepare or present– After NOI served?– Copies?

• Section 1– Name of employee– Status box– A number (if copies not maintained)– Attestation signed– Attestation dated if before September 30,1996


Substantive Errors, cont’d

• Section 2– Document title, number, expiration date (if

copies not maintained)– Attestation not signed– Not dated within three days of date of hire

• 3 days after clarified by E-Verify; ICE agrees• How does ICE count business days?


Substantive Errors, Cont’d

• Section 3– Not signed– Not completed before expiration of previous

work authorization


Technical or Procedural Errors

• Section 1– Maiden name, address, birthdate– Date of signature on date of hire, if hired

before September 30, 1996– Translator or preparer signature– Note: SSN is optional except for E-Verify

employers


Technical or Procedural, Cont’d

• Section 2– Failure to record document id info, if copies

maintained– Missing company name and address– Missing hire date– Date of attestation after September 30, 1996

• Note: what is local ICE position on timeliness?

• Other violations– Use of Spanish version?– Use of wrong I-9 version?


Limitations on Reliance on Technical and Procedural Defenses

• Intent to avoid IRCA• Repeated failures• Reliance on technical and procedural

guidelines• False corrections• Failure to follow warning notice


Audit and Corrections: Best Practices and Issues

• Only employee corrections in Section 1– Any exceptions recognized by ICE?

• Employer corrections in Section 2: remember “under penalty of perjury”: can the person signing really attest?– Missing signatures– Missing dates


Substantive/Uncorrected Technical Violations

Fine Schedule

% of Violation in Total Workforce

First Offense Second Offense

Subsequent Offense

Up to 9% $110 $550 $1,100

10% to 19% $275 $650 $1,100

20% to 29% $440 $750 $1,100

30% to 39% $605 $850 $1,100

40% to 49% $770 $950 $1,100

50% and Up $935 $1,100 $1,100


Knowing Hire/Continuing to Employ Fine Schedule

% of Violation in Total Workforce

First Tier$375-3,200

Second Tier$3,200-$6,500

Third Tier$4,300-$16,00

Up to 9% $375 $3,200 $4,300

10% to 19% $845 $3,750 $6,250

20% to 29% $1,315 $4,300 $8,200

30% to 39% $1,785 $4,850 $10,150

40% to 49% $2,255 $5,400 $12,100

50% and Up $2,725 $5,950 $14,050


Enhancement MatrixFactor Aggravating Mitigating Neutral

Business Size + 5% - 5% +/- 0%

Good Faith + 5% - 5% +/- 0%

Seriousness + 5% - 5% +/- 0%

Unauthorized Workers + 5% - 5% +/- 0%

History + 5% - 5% +/- 0%

Cumulative Adjustment + 25% - 25% +/- 0%


Anatomy of an Audit• Notice of Inspection• Time and scope of the audit

– Work with agents to make scope manageable – 72 hours response time unless extension granted

• ICE subpoena • Inspection and audit• Notice of Intent to Fine/Warning• Negotiation – civil penalty matrix

– 25% upward or downward adjustment– Discretion still exists


Negotiating the Best Deal with ICE• Always assert good faith: if no unauthorized aliens,

ICE has discretion to warn on first offense• Standard fines

– Knowing hire: $375-$4300– Substantive or uncorrected t and p: $110-$1100– Depends on percentage of substantive errors

• Mitigation/Aggravation factors: size, good faith, seriousness, unauthorized aliens, ICE history

• Remember: Statue of Limitations, Cooperation, Publicity, IMAGE program and other leverage


Electronic I-9 Regulations• The regulations require the electronic system

must:1. Ensure the integrity, accuracy and reliability 2. Prevent, detect and track unauthorized or accidental

creation or changes to electronically completed or stored Form I-9

3. Have an inspection and quality assurance program with regular evaluations of the system and stored Form I-9s

4. Have an indexing system and a retrieval mechanism that permits searches by any data element.

5. Reproduce readable hardcopies. • Employer retains responsibility


Your challenge: Managing the Electronic I-9/E-Verify provider

• ICE has emphasized that employers cannot hide behind commercial providers

• Many reported problems with some electronic providers

• Abercrombie & Fitch fine– $1 million– Michigan only– Internally prepared electronic system– Essentially no I-9’s


What is E-Verify

• No cost Internet based system with information from DHS & SSA

• Matches name with information in SSA/DHS and other government databases

• Voluntary . . . Except:– Federal Contractors– State and local requirements– STEM exception


Preparing to Enroll in E-Verify

• E-Verify Memorandum of Understanding (MOU) and the employer responsibilities

• Determine what entity is enrolling• Determine what hiring site(s) enrolling• Decide who will need to access E-Verify

and who will be responsible for owning the process.

• Determine if any changes are necessary to the company’s business processes


Preparing to Enroll In E-Verify• Understand how E-Verify impacts the Form I-9

– SSN– List B documents– Copies of supporting documents– Data from the I-9

• Understand how the company processes its Forms I-9– Where and When do employees complete the Form I-9– Does your company forward its Form I-9s to a central

location– Does each location where the Form I-9 is completed have

a computer with internet access


Revisiting Your E-Verify MOU• Note, it might have changed while you weren’t

watching!• Gives broad authority to the government:

permits DHS to review E-Verify records, I-9 forms, to interview the employer—and employees!

• Requires safeguarding of access and data• Penalty—kicked out of the program• Data sharing with other agencies


E-VERIFY - NEW INITIATIVES

• Monitoring and Compliance – Expanded List of Behaviors– MOU with OSC

– Incorporation of commercial data • Photo Matching

– U.S. Passports & RIDE (DMVs)

• Promoting Participation• Worker Protection

– Videos advising workers of rights– Self-Check


What is CTMS looking for? (It is tracking your behavior)

• Multiple use of Social Security Numbers• Delay in 3-day rule• Pre-screening• Terminations for TNC• Over-documentation


Some Questions for Employers to Ponder

• Do you know that all new hires are going through E-Verify?

• Do you know who has access to your E-Verify account?

• Are you sure they (they are you!) use the system properly?– Applicant screening?– Ex-husbands’ girlfriends?– Sharing passwords?– Deleting users?

• Do all I-9’s completed since enrollment in E-Verify include E-Verify authorizations?


More Questions for Employers to Ponder

• What are your processes when you get a TNC?– Give the employee the requisite notices?– Keep the employee on payroll?– Keep checking the system?– Terminate only on FNC?– DON’T terminate a TNC


Your Goal: Making E-Verify Compliance an HR Operational

PriorityWhat to do?• Implement a compliance mindset—requires

high level of focus• Develop your own “E-Verify User Guide”• Train, train, train• Name an E-Verify Compliance “Owner” and

have them routinely and randomly look at system data

• Consider an outside audit


Negotiating the Best Deal with ICE

• Always assert good faith: if no unauthorized aliens, ICE has discretion to warn on first offense

• Standard fines– Knowing hire: $375-$4300– Substantive or uncorrected t and p: $110-$1100– Depends on percentage of substantive errors– What discretion does ICE have?

• Mitigation/Aggravation factors: size, good faith, seriousness, unauthorized aliens, ICE history


Negotiating the Best Deal: What can you offer ICE?

• Statute of limitations defense: • E-Verify/IMAGE• Cooperation clause• Publicity


Questions and Discussion


THANK YOU!

Cynthia J. Lange

Fragomen, Del Rey, Bernsen & Loewy, LLP2121 Tasman Dr.Santa Clara, CA 408.330.1111

[email protected]