What is an I-9 Audit?

In November 1986, the Immigration Reform and Control Act was enacted, requiring employers to verify the identity and employment eligibility of their employees using Form I-9.

The U.S. Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE) perform I-9 audits to ensure businesses comply with the law and maintain accurate records. If a company is audited and found non-compliant, it may face fines of up to $2,789 per form, among other penalties. As of June 28, 2024, these fines have increased. You can see the full list of increased penalties on the Federal Register.

Potential Triggers for an I-9 Audit

Now, let’s dig deeper into what can trigger an I-9 audit and how to mitigate your risk.

Flagged by Database

The DHS maintains a database of immigration and employment verification data. That database tracks trends and catches “red flags” to alert potential non-compliance. Some of those trends and red flags include:

• Industry: If you are in an industry that is at a higher risk of non-compliance, you may be targeted. This includes hospitality, retail, and agriculture.
• Geographic Location: Certain geographic “hotspots” are more likely to trigger audits.
• Previous Audit Data: Past errors or a history of non-compliance increase the likelihood of being audited again.

Mergers, Acquisitions, or Changes in Ownership

Transitions in business ownership can prompt I-9 audits to verify continued compliance.

This is especially important if the acquiring company decides to consider the seller’s employees “new hires” since there may be a lot of new I-9 forms to go through.

Complaints or Tips

Complaints are a common trigger for audits since they can come from various sources:

• Current Employees: If current employees discover evidence of incorrect I-9 management or the illegal hiring of undocumented workers, they may file a complaint. These reports are usually the most credible.
• Former Employees: Former employees may file a complaint if they are upset about their termination or if they believe they lost their job to an undocumented worker.
• Job Candidates: Candidates who were not hired may claim they lost the job to an undocumented worker or that immigration status was not properly addressed during the application process. These complaints often lack credibility, but they can still trigger an audit.
• Competitors: Business rivals may file complaints to disrupt operations, though these usually lack evidence.

Media Attention

Negative media coverage, especially related to immigration issues, can attract the attention of ICE and trigger an audit.

Other Government Agency Investigations or Audits

Government agencies collaborate to achieve their goals, so an investigation by one agency might lead to I-9 compliance scrutiny.

• IRS or Other Oversight Agencies: Other labor/workforce-related audits may reveal issues with I-9 compliance.
• Confidential Informants: Confidential informants provide information to the federal government in exchange for protection in their own federal case.
• Co-conspirators: Individuals involved in criminal activities like transporting or harboring undocumented workers may offer information about companies hiring undocumented workers to reduce their sentence.

What Happens If You Are Audited?

If your company is flagged for an audit, the process begins with a Notice of Inspection (NOI). Employers have at least three business days to produce the requested Form(s) I-9.

• Paper Process: If you are using a paper process, copies and scans of I-9s and other relevant documentation that employees provide for their I-9s must be provided.
• E-Verify: Employers using E-verify must make and retain copies of documentation presented by employees for List A of Form I-9.
• Other Procedures: Employers who use an alternative procedure with an employee must retain a clear and legible copy of all documents presented by the employee seeking to establish identity and employment eligibility for Form I-9.

Homeland Security Investigations (HSI) may also request additional documentation, such as payroll information, a list of active and terminated employees, articles of incorporation, and business licenses.

ICE inspectors will review it for completeness and accuracy. Discrepancies may result in warnings or fines, which are determined based on factors such as the size of the business, the number of previous offenses, and the severity of the infractions. If fined, your business is entitled to a hearing if you request one within 30 days of receiving the Notice of Intent to Fine (NIF).For a better understanding of the process, ICE provides a helpful flowchart on its website.

Audits Don’t Have To Be Scary – See How

Even with the best efforts, audits can still happen – but they don’t have to be scary! The key is to be proactive and prepared. If an I-9 audit occurs, having the right information and tools will help ensure it goes as smoothly as possible.