How to Prepare for And Handle External I-9 Audits

Published: August 9, 2023 by Vijay Thakkar

Immigration Reform and Control Act (IRCA) of 1986 made it illegal for employers to knowingly hire, recruit, or refer for a fee anyone without work authorization. IRCA’s main purpose, to curtail illegal immigration, remains ever so important in present times and employers need to be very cautious when enforcing it to avoid hefty fines and criminal penalties. Immigration compliance is no longer a slight inconvenience but a business necessity for all employers. For this reason it’s essential for employer sto better understand how to prepare for and handle external I-9 audits.

Importance of Form I-9

To make sure their business operations are in line with immigration laws and policies, employers have one major duty. Within three days from the date of hire, they need to file Form I-9 for each new employee.

An employer is obliged to verify the identity and employment eligibility of a new hire by reviewing their documents to prove their identity and work eligibility. As easy as this may sound, the task to ensure proper completion of the form involves a strict set of timelines and complex rules.

The entire form consists of three sections: the first one must be completed by the employee, the second by the employer – to attest to the accuracy of the employee-entered data by inspecting the original document of the employee’s choice, and the third one is used in case of the legal name change, rehiring or re-verifying the I-9.

These records should be kept on file and not submitted to the government. Keeping them in perfect order at all times must be done to be able to successfully handle external I-9 audits during the ICE inspection. The Form I-9 must exist for each employee and be retained for a set period upon termination, either three years after the date of hire, or one year after the employment is terminated, whichever is later. They can decide to store Form I-9 files on paper, electronically, or as a combination of these methods.

Know What to Expect and How to Handle External I-9 Audits

In the case of an external audit, an employer’s preparedness can make all the difference. Upon receiving the NOI (Notice of Inspection), employersreceiveat least three business days to produce the Form(s)I-9 requested.

Apart from I-9 files, ICE inspectors usually demand to see supporting documents such as a copy of the employer’s payroll, a list of active and terminated employees, articles of incorporation, and business licenses. What they want to make sure of is that:

  • There is an I-9 form on file for each and every employee hired within the last three years or for employees terminated within a year,
  • Every employee is authorized to work,
  • Every document used for verification is valid,
  • I-9 forms have been completed, stored, and retained in compliance with the regulations.

Checking all the legal documents prior to the audit, and making sure the accurate data is available for all employees will ensure an employer will be able to successfully handle external I-9 audits and receive favorable inspection results.

External I-9 Audit Outcomes and Consequences

The desired outcome of an external audit is receiving the Notice of Inspection Results also known as a Compliance Letter. This letter confirms the favorable result of the ICE inspection and relieves the employer of any liability.

In case of discrepancies or suspect documents, employers may expect notices inviting them to provide proper documents showing work authorization, along with additional documents as required.

Technical or procedural failure notices invite employers to correct these violations within ten business days. Otherwise, they would be treated as substantive violations.

Warning notices indicate substantive verification violations but also show that employer compliance can be achieved. These are not issued for repeat offenses. Instead, the most serious outcome of an external I-9 audit is the Notice of Intent to Fine (NIF) which indicates a beginning of a complex procedure in which the employer may be charged a significant penalty for violations detected and not corrected.

Based on the size of the business, good faith, seriousness of violations, presence of unauthorized workers, history, and cumulative adjustment, the base fine amount could be enhanced, mitigated, or deemed neutral.

Proactive Practices are Best Practices

Every prudent employer will do their best to avoid getting entangled with Form I-9 violations and face the consequences of possible non-compliance. We outlined some of the guidelines to help employers ensure their employment practices and I-9 management are in line with the regulations, and handle external I-9 audits in the best possible way:

Establish an I-9 Compliance Policy

Establish an I-9 compliance policy that outlines the procedures for completing, retaining, and storing I-9 forms. Make sure that the policy is up-to-date and that all employees are aware of the policy.

Incorporate Internal I-9 Audits into Your Regular Routine

Internal or self-audits serve to prepare for external audits and allow employers to spot mistakes and discrepancies before the files get to be examined by authorities. ICE encourages this practice and provides guidance for its implementation.

Organize and Review Form I-9s

Keep the forms in a central location, make sure they are properly labeled and indexed, and that you have a process in place to provide the necessary documentation to the auditor. Review your I-9 forms for accuracy and completeness to make sure that all required fields are completed, and that the information is correct.

Keeping Up with I-9 Legislation

Any new change made to the form can have a far-reaching effect. This makes the task of keeping an eye out for the news and updates on the legislation vital. The mistakes made unknowingly are still mistakes – an employer has to keep up with the new guidelines and use the most recent version of the form.

Regular Staff Training

All the staff involved in the I-9 verification has to be well-educated and trained regularly. Starting with information such as instructions on how to complete the I-9 Form, reverification and retention rules, how to prevent the use of fraudulent documents and how to detect them, to how to prevent discrimination and other prohibited actions should be constantly on the radar for updates and flawless administration.

Utilizing E-Verify

As an internet-based system operated by the Department of Homeland Security (DHS) in partnership with the Social Security Administration (SSA), E-Verify allows employers to determine the eligibility of their newly hired employees to work in the US. Even though E-Verify is a voluntary program that cannot be mistaken for an audit, by utilizing its features employers show they are being proactive as a company in keeping their workforce legal.

Automating I-9 Administration

Employers should organize their I-9 forms in a systematic manner that makes it easy to locate and review them during an external audit. In an increasingly digitalized world, an automated system for I-9 administration is an obvious upgrade for every business. It is a time and money saver, and one of the surest ways to improve your I-9 compliance and help you prepare for and handle external I-9 audits.

Balancing technology with human expertise, the digital solution eliminates the pressures of time, compliance, reporting, and record keeping and allows an employer to be ready for audits at any time of the day. This will help to minimize any potential penalties or fines.

Related Posts

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Published: March 9, 2023 by Gordon Middleton

Read this guide to find out how to prepare for an I-9 audit so your business can avoid common mistakes that cause fines and penalties.

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