I-9 audits present legal concerns for businesses

Indiana’s chapter of the National Federation of Independent Business issued a press release June 23, urging Indiana businesses to prepare for I-9 audits. U.S. Immigration and Customs Enforcement has stepped up its audits of businesses nationwide in an effort to crack down on the employment of unauthorized immigrant workers.

Employers are required to have employees complete I-9 forms, providing documentation that proves the worker’s identity and authorization to work in the United States.

Michael Palmer, a partner in Barnes & Thornburg’s South Bend and Grand Rapids, Mich., offices, said that the I-9 audits – which have become more common during the Obama administration – are a softer approach than previous methods of immigration compliance enforcement.
 

Palmer

“What employers need to understand is that this process has really taken the place of raids in terms of how ICE is gathering evidence to target employers – not only for I-9 allegations, but also for allegations for knowingly employing unauthorized workers,” Palmer said.

Once ICE notifies a business about a pending audit, Palmer said, “Employers should – and usually do – ask for three days to respond, and usually we hear from them at that time.”

Among the items ICE will ask to review are I-9 forms for current employees and any employee who has been terminated in the past three years, wage reports, and any temporary staffing agreements.

Palmer said that companies that hire through temporary agencies are not required to provide the I-9; that may come from the agency. But because some companies have in the past tried to subvert employment laws by hiring unauthorized immigrant temp workers, Palmer said, businesses must be able to show on paper that they’ve done what they can to verify employment eligibility.

Palmer said he has not received any recent requests from Indiana businesses seeking help with an I-9 audit. But Christl Glier, of-counsel for Ice Miller in Indianapolis, has.

“We’ve been involved in a handful of audits for some Indiana companies – the one most recently of ours is a small startup company,” Glier said. “The things that you see on ICE’s website and in the news and in the media, oftentimes, there are very large companies with a national presence, but smaller companies, that’s a little bit new, for sure,” Glier said.

Glier

Both Palmer and Glier said they aren’t certain how ICE chooses businesses for I-9 audits.

“It’s a bit of a mystery,” Palmer said. “They represent that they only target companies that they suspect are violating the law. Now we know from experience that’s not always the case.”

“Some of the things we’ve seen recently make us think that there is some degree of randomness to it all,” Glier said. “It doesn’t seem to be industry-specific. It just makes you wonder if there’s more going on than some of the specific, very blatant things that are triggering these I-9 audits.”

ICE may be more likely to audit businesses that have been subject to immigration raids in the past, Palmer said. And employers who have received “no-match” letters from the Social Security Administration may also be targeted for audit. The no-match letter – or employer correction request form – indicates that a Social Security number provided for an employee does not match the SSA’s records.

On July 1, Indiana businesses that are contractors or subcontractors for government agencies will be required to use the Internet-based E-Verify system to confirm employees’ eligibility to work.

“We do hear from quite a few employers about this,” Glier said. “Even ones that are not required to use it just yet, but definitely anticipate that that’s the direction we’re heading. The other issue is just the administrative burden that this places on some companies – it takes training, manpower.”

Palmer said he thinks immigration compliance is a growing concern for employers, especially for large companies with offices in multiple states that may be struggling to understand the laws from state to state.

“We have represented clients who we believe have made a good-faith effort to comply with the I-9 process, but yet they’re subject to I-9 audit,” Palmer said. “The I-9 process – it can be confusing, and employers who do make an effort to comply in good faith are still getting caught in the crosshairs.”

Glier and Palmer recommend that employers conduct their own internal audits to ensure they are in compliance with employment law.

“I think the huge problem for employers is trying to balance everything that’s out there – complying with I-9 requirements, worrying about discrimination issues, and what that balance should look like,” Glier said.

Fines for I-9 violations range from $110 to $1,100 for one single, minor, or technical violation. Incorrect I-9 forms can be used as evidence of knowingly hiring an unauthorized immigrant worker and can result in a fine of up to $3,200 per violation.•