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Employers Should Be Aware of ICE I-9 Audit History

It still surprises me 24 years after enactment, how many employers still don’t know about their I-9 obligations under the Immigration Reform and Control Act (IRCA) of 1986. Since then, employers are required to complete Form I-9s documenting the work permission status of employees hired after November 6, 1986, including U.S. citizens. Even among employers who know of their I-9 obligations, many still do not fully understand the scope of the I-9 process and record keeping requirements; nor the extent to which Immigration and Customs Enforcement (ICE) has substantially ratcheted up their audits, investigations and sanctions. (See my earlier post on I-9 Form Revisions Subject of USCIS Stakeholders Meeting.)

ICE is the agency responsible for employer audits and raids. Employers should review the ICE press releases to see the size and scope of fines, the mistakes made by employers and the severity of penalties, including criminal indictments. Employers can be fined for failure to complete I-9s at all, for failure to properly complete and retain I-9s, and for “knowingly” hiring unauthorized workers. There are criminal consequences for continuing to hire unauthorized workers, especially after an audit, for a pattern or practice of knowingly hiring unauthorized workers and for more serious offenses such as harboring, smuggling, dealing in or accepting fraudulent documents and related offenses. ICE has been known to indict not just owners and shareholders, but also individual employees, supervisors and managers engaged in such schemes.

A quick look at the ICE website list of press releases concerning workplace enforcement shows these recent examples of settlements or criminal investigations. Every employer should take note:

  • Brownwood Furniture, California – criminal information filed charging president and primary shareholder with obstruction of justice and continuing to hire unauthorized workers;
  • Timbuktu and By the Docks Restaurants, Maryland – owner sentenced to prison for harboring for private financial gain and competitive advantage 24 unauthorized workers some of which he housed. His sentence included $250,000+ fine and forfeiture of another $300,000 in property. He had continued to employ unauthorized workers, and accepted false documents despite a prior enforcement action. He had also received Social Security mismatch letters [a confusing subject and whole other can of worms] and failed to complete I-9 forms.
  • Masters in Metal, California – owners criminally charged for continuing to hire unauthorized workers following I-9 audit three years earlier finding several employees had fake green cards. Although the company reported these people were later terminated, some were apparently in fact not terminated.
  • Abercrombie and Fitch, Michigan – settled $1,047,110 fine for “technology deficiencies” in its I-9 verification system. (See an earlier post, Million Dollar Fine Imposed on Abercrombie & Fitch for I-9 Technology Deficiencies);
  • IFCO Systems, Texas – five managers indicted for conspiring to hire unauthorized workers following a tip at its New York plant;
  • Koch Foods, Ohio – settled a $500,000+ fine for administrative I-9 violations after 161 unauthorized workers were arrested pursuant to a search warrant;
  • 180 Audit Notices issued March 2, 2010 in five southern states;
  • Pilgrams Pride, Texas $4.5 settlement for hiring unauthorized workers at seven plants;
  • 652 Notices of Inspection issued to employers in 2009.

Referring to the one page I-9 form as “an obscure federal document, NPR posted an Associated Press (AP) story about I-9s on November 1, 2010 in “Warnings Abound in Enforcing Immigration Job Rules”, in which the Abercrombie and Fitch case was discussed. AP was able to obtain and analyze summaries of 430 ICE audits conducted between July 1, 2009, and January 31, 2010.

AP found that of 86,000 I-9s reviewed, 22,000 involved “suspect” documents, meaning those workers’ legal authorization to work in the U.S. was not clear. According to AP, “ICE audited more than 200 companies with fewer than 25 employees, including 50 businesses agents listed as having fewer than five workers. More than 250 of the companies didn’t have a single suspect form.”

Employers arrested on criminal charges (e.g. continuing to hire, harboring, etc.) increased from 135 in 2008 to 150 in the 8-month time period, while criminal arrests of workers dropped from 968 to 208, and administrative arrests for deportation also dropped. Meanwhile, ICE claims to have collected $6.9 million in fines this year. But fines can range from just over a hundred dollars per technical paperwork violation, to tens of thousands or a million dollars for “knowing” hires, or like in the Abercrombie case, for “technical deficiencies”.

According to the AP study of ICE audits, many audited employers do not have any violations, while others have paperwork technical violations for which they receive warnings. Others, however, argue that ICE should work more with the U.S. Department of Labor to go after known or suspected employers who also cheat workers of their pay or provide unsafe work conditions.

Many employers find the I-9 procedures confusing, especially when operating in multiple locations or multiple states, using supposed independent contractors, or even in day to day circumstances. That’s where hiring trained legal counsel can be useful to help conduct an internal audit before immigration comes knocking on the door. It’s even more important when there is turnover of HR or other designated personnel to handle the task. When ICE issues an audit notice, there are only three days in which to have I-9s ready for inspection. Calling a lawyer on such short notice can be very expensive, especially if an employer is disorganized. ICE posts the range of potential fines on its website. Just looking these over to see the potential for liability can make legal fees for a more leisurely in-house audit versus representation during a time sensitive defensive ICE audit look like a walk in the park.

While it may seem that overall the number of audits seem relatively low in relation to the total number of employers in the country, the anti-immigrant mood of newly elected members of Congress and President Obama’s likely compromises will no doubt result in more enforcement legislation including more audits of employers. Therefore, employers should consider internal audits of their I-9 practices now.