I-9 Forms and Potential Audits by the US Immigration and Customs Enforcement Agency

Keith Madden, Esq.

            Many small businesses start out with the owner performing most of the work for the company.  With success, there usually comes a time when it is necessary to hire employees, so that profits can be maximized.  It is when a company starts hiring employees that business owners learn about the legal requirements and added expenses of Unemployment Insurance, Workers Compensation Insurance, and payroll withholding.  One more legal requirement to add to this list is the requirement under Federal law that all employers must obtain and retain I-9 forms for all of their employees.

            Under the Immigration Reform and Control Act of 1986, all employers are required to verify the employment eligibility of persons hired after November 6, 1986 by using federal form I-9.  The US Immigration and Customs Enforcement Agency (ICE) conducts audits at companies, and the fines that it charges to businesses have raised substantial revenues it the last few years.  Since 2009, ICE has conducted over 7,500 audits and imposed over $80 million in fines. In 2011 alone, ICE conducted 2,740 audits and assessed over $7 million in fines.

            An ICE officer will usually send a notice to the business owner that the officer will conduct an inspection at the business in three days, to determine whether there is compliance with the I-9 requirements.  The ICE officer will also request other business documents and information in order to determine whether the I-9 forms are accurate.

            There can be substantial penalties for problems that the ICE officer finds during his inspection, and it is very important that I-9 forms are not falsified or back-dated.  According to the I-9 form:  "Federal law provides for imprisonment and/or fines for false statements or use of false documents in connection with the completion of this form." An employer who hires an unauthorized worker can be fined between $250 and $5,500 per worker. In addition, such an employer can be barred from federal government contracts for a year. An employee who knowingly accepts fraudulent documentation can also be criminally prosecuted under other immigration laws.

            An employer who fails to keep properly filed I-9 forms can be fined $110 per missing item for each form, up to $1100 per form, even if the employee is legally authorized to work in the US. An individual who knowingly commits or participates in document fraud may be fined between $375 and $3,200 per document for the first offense, and between $3,200 and $6,500 per document for subsequent offenses.

            Fausone Bohn, LLP assists businesses in complying with state and federal law.  If you have questions concerning I-9 forms, or other legal requirements, you can contact attorney Keith W. Madden at (248) 912-3230.