Why I-9 Compliance is Vital

Last year, US Immigration and Customs Enforcement (ICE) quadrupled the number of worksite investigations, a sobering reminder of why I-9 compliance is vital to every employer. These investigations led to a 440% increase in audits, a 560% increase in criminal arrests and an 887% increase in administrative arrests. In the last two years, businesses have been ordered to pay more than $127.8 million in criminal and civil penalties for violations of related laws. Any business owner who has not shored up his I-9 procedures in light of the surge could be making a very costly mistake.

The Purpose of I-9

The Immigration Reform and Control Act of 1986 requires employers to check the identity of all employees and to verify their authorization to work in the U.S. Businesses document these efforts via the Employment Eligibility Verification Form (I-9), maintained for each employee whether a citizen or not. The employee attests to his work eligibility, and the employer attests to verifying that the produced identification documentation appears to be genuine. The two-page form carries 15 pages of instructions, an indication of the serious legal ramifications to both employer and employee for mistakes and outright lies.

ICE may audit any business at any time, for any reason. While ICE has recently been specifically targeting (1) businesses that relate to critical infrastructure and (2) industries that have historically been known to exploit its workers, the agency may initiate an audit signaled by an unrelated investigation by another arm of the Department of Homeland Security or simply by anonymous tip.

An I-9 Compliance Audit

Through each step of the audit process, the business will receive written notice from ICE. It begins with a Notice of Inspection, informing the business that it has three days to produce its I-9 forms and any requested supporting documentation. If auditors discover violations, the employer then has ten business days to correct them or risk financial penalties. Should ICE determine that the business knowingly hired unauthorized workers, the business may be subject to fines, criminal prosecution and debarment from doing business with the federal government. Settlement may be reached with ICE along the way, but if the business continues to challenge the rulings, the case may proceed through a series of administrative hearings.

Determination of Fines

In January 2018, the Department of Justice increased I-9 fines for inflation. They are calculated from the date of the I-9 inspection and are determined by the violation(s)’ placements on the following ICE tables.

The Knowingly Hire/Continuing to Employ table represents the number of violations for employees fitting this description divided by the number of employees that required an I-9. Each ten-percentage point range increases the fine as does whether the employer is a first-, second- or third- (or more) time violator. The minimum fine for a first-time violator with a score of less than 10% is $548, while the maximum on the table is $19,242.

The Substantive and Uncorrected Technical Violations table divides the number of violations by the number of employees requiring an I-9, and also considers whether this is a first, second or third (or more) offense. The minimum fine is $220 while the maximum is $2,191.

The Enhancement Matrix considers five factors unique to the business. Each of these factors can increase or decrease the table percentages by at most five percent.

  1. Its size;
  2. Whether it acted in good faith;
  3. The seriousness of the offense(s);
  4. Whether unauthorized workers were involved; and
  5. Its history of compliance.

Avoiding a Costly Mess

With all of this, ICE is seeking to ensure a “culture of compliance” that will enhance public safety and national security and protect law-abiding companies from unfair competitive advantage. The best way for businesses to live comfortably within this culture of compliance is to, well, comply. The I-9 is a legal document. Both employer and employee attest to what they write as though it were testimony in a court of law, and it is a crime in itself simply to lie on any part of it. The HR professionals coaching employees through the I-9 should fully grasp this for themselves and make certain that the new employees understand that their signatures subject them to perjury charges for everything they have written. If all parties to the I-9 are acting in informed good faith, they are being good citizens of the culture of compliance.

Companies are responsible for the competence and good faith of their lower level HR professionals. It can be difficult for business owners and upper management to oversee the actions of everyone administering the I-9, especially when the forms are being filled out in other locations. ICE recommends that companies conduct self-audits to identify and correct issues before they become problems, and it offers guidelines to do so on its website. Just remember that the Immigration and Nationality Act prohibits discriminatory or retaliatory audits.

Be Prepared: Mergers And Acquisitions Do Not Absolve I-9 Compliance Issues

Mergers and acquisitions create chaotic periods for affected businesses, but they do not absolve those businesses of their obligation to ensure compliance with immigration and employment laws. In fact, the new entity becomes liable for the sins of the old. It must, therefore, perform its due diligence on Employment Eligibility Verification Form I-9 maintenance for all employees or risk civil and criminal penalties.

The current administration has cracked down on I-9 violations, costing businesses millions of dollars and resulting in thousands of arrests of both employers and employees. With the added scrutiny, it is more important than ever to have one’s I-9 ducks in a row. US Immigration and Customs Enforcement (ICE) recommends that businesses conduct self-audits (https://www.justice.gov/crt/file/798276/download) of their I-9 procedures, as long as they cannot be considered discriminatory or retaliatory. An ICE audit may be initiated for any reason—even an anonymous tip—so every business in the country is susceptible at any time.

The Issue

Be prepared for paperwork. The newly acquired or reorganized business entity may take one of two routes in its approach to the old entity’s I-9s. Whichever I-9 strategy it chooses, a representative will need to sit down with each employee.

  1. The new entity may maintain the old ones previously completed I-9s, thereby accepting liability for any omissions or errors on the forms. If this road is taken, the business should make the time to review each form with each employee to update and re-verify the information to protect itself from possible mistakes created by the previous regime’s I-9 procedures. If this process is not completed by the date of the merger or acquisition, the new entity is legally responsible for any errors in the existing paperwork.
  2. The safer route is to complete a new I-9 for each employee before the date of the merger or acquisition. This requires an offer of employment to and acceptance by each employee who will remain on the payroll after the turnover date. The employee must complete Section 1 of the form by that date, and the employer must complete Section 2 within three business days.

The only exception is an employee hired before November 7, 1986, who has “a reasonable expectation of employment at all times.” These employees are exempt from completing I-9s.

If the paperwork must be done—and it must—it may be a good time to sign on to the federal government’s E-Verify program to make I-9 procedures airtight. Businesses such as federal contractors are required to enroll in E-Verify (https://www.e-verify.gov), and some states mandate participation under certain conditions such as business licensing. For most employers, however, the program is voluntary. E-Verify electronically matches employee documentation presented to attest to identity and work status against data maintained by the Department of Homeland Security and the Social Security Administration. The employer instantaneously receives either confirmation of the documents’ authenticity or notice that a problem may exist. E-Verify’s standards on documentation are higher, requiring a Social Security number and photo identification, but that serves only to further safeguard the business from I-9 problems.

So, we have a newly acquired or reorganized business which may or may not elect to shore up its I-9 situation through E-Verify, and we know that a ton of I-9 paperwork lies on the horizon whichever route we take. We can trod through the paperwork and file it away today, but of course, the job is just beginning. In fact, that was the easy part—compiling shiny new or freshly verified I-9s that, today, are in pristine shape. But tomorrow, employee verification documentation will expire on different days of different years, and state and federal laws and regulations will change when least expected. Wouldn’t it be nice if there were a tool that could take the worry and uncertainty out of all this?

The Solution

In 1998, a group of immigration and employment attorneys recognized the complexity of I-9 maintenance and its ever-evolving landscape and designed software to streamline the process and protect businesses. Lookout Services developed I-9 Intelligence, the first software aimed at simplifying I-9 form completion, the employment verification process and the secure, ongoing management of I-9s and supporting documents.

With an impending merger or acquisition, I-9 Intelligence will protect the new entity from old and future mistakes made by careless people administering the forms and from sloppy procedures. Poorly trained or willfully deceptive people acting in the field without oversight can cost a business. Even the most conscientious employer can make mistakes or simply fail to implement an important legal change. This I-9 software negates all of these frightening and all-too-real scenarios, converting a paperwork nightmare into a Human Resources dream by:

  • Guiding the administering professional through completion;
  • Immediately flagging mistakes or missing data;
  • Providing dashboard alerts when forms are late, missing or in need of updating;
  • Reporting on expiring documents, due dates and form retention timelines;
  • Uploading old I-9 forms and checking them for errors and timeliness;
  • Automatically altering forms to comply with new laws and regulations to ensure seamless compliance and
  • Expanding options for complying with E-Verify by permitting even low-level HR employees to enter and receive data.

Take the guesswork out of I-9 compliance and ensure that your newly merged or acquired business is audit-ready from Day 1.

ICE Investigations Surge 400% in 2018

US Immigration and Customs Enforcement (ICE) investigations in 2018 surged by 405% over 2017 to ensure a “culture of  I9 compliance.” The agency’s stated goals are to:

  • Prevent the abuse of workers;
  • Deter further illegal immigration;
  • Stop criminal activity, thereby enhancing public safety;
  • Eliminate threats to national security and
  • Protect lawful workers and companies from an unfair competitive advantage.

To these ends, ICE and Homeland Security Investigations (HSI) joined forces to produce stunning results from investigations to arrests over the previous year.

Worksite investigations1,6916,848405%
I-9 audits initiated1,3605,981440%
Criminal arrests139779560%
Administrative arrests1721,525887%

As an investigative arm of the Department of Homeland Security (DHS), ICE is specifically targeting two types of industries: (1) those that relate to the nation’s critical infrastructure and (2) those that have traditionally employed and have been known to exploit unauthorized workers. The agency may trigger an Employment Eligibility Verification Form (I-9) audit of any business for any reason, but some of its most visible cases of late started with tips from other DHS agencies through their unrelated investigations and from the tip form on ICE’s website. Tipsters are not required to provide their names or other identifying information so that they may choose to remain anonymous.

With the rising number of audits comes a slowdown in the process, sometimes taking a year to complete and further complicating a difficult and costly headache for HR professionals. Businesses must be aware of the current climate and take every possible step to avoid triggering an I-9 audit and the expensive sanctions that can follow.


While it can take years for the federal government to turn an audit into a conviction, several high-profile cases and trends have emerged in the last two years that should make business owners reevaluate their I-9 procedures for weaknesses. The consequences of others’ misdeeds are sobering.

  • The owner of a slaughterhouse in Tennessee pleaded guilty to tax and wire fraud and employing illegal aliens. He will pay $1.4 million in restitution before his sentencing which may include prison time and fines. 104 alien employees were arrested on immigration violations.
  • HSI arrested 17 people for a criminal conspiracy to exploit illegal laborers, fraud and money laundering and is investigating violations at agricultural businesses in Nebraska, Minnesota and Nevada.
  • A Texas trailer manufacturer is under criminal investigation for hiring 160 people using identities stolen from US citizens.
  • In FY2018, businesses were ordered to pay over $20.4 million in civil and criminal penalties. One Texas business forfeited over $5.5 million, and an Oklahoma business paid more than $1 million.
  • FY2017 saw the largest financial penalty ever issued in an immigration case. Asplundh Tree Experts of Pennsylvania was ordered to forfeit $80 million and to pay an additional $15 million to settle civil claims for willful blindness to lower level practices of hiring and rehiring illegal aliens.

While the numbers of indictments and convictions remained relatively steady over the last year due to the time it takes to complete the process, the message is clear to HR professionals—make sure I-9 procedures are rock solid. ICE recommends that companies conduct self-audits to identify and correct issues before they become problems.