Why Immigration Compliance Still Matters

As companies return to normal business practices following the COVID-19 pandemic, employers should shift their focus back to more “traditional” immigration matters such as Form I-9 compliance. The risks for penalties are as real as ever, and employers should collaborate with immigration counsel to review immigration program compliance to identify and mitigate risk areas.

One such area is compliance related to Form I-9, Employment Eligibility Verification. The Immigration Reform and Control Act, enacted in 1986, requires that employers verify the identity and employment eligibility of their employees. Form I-9 is not filed with the U.S. government, so there are no approvals or other adjudications for employers to know they are completing the Form and process correctly. Criminal and civil sanctions may be imposed for non-compliance. 

How do employers learn of non-compliance?

There are a few ways an employer may learn that it does not have a compliant Form I-9 program: a whistle-blower could file a discrimination claim, alleging that the company asked for more documents than are permissible; an employee could file an immigration complaint unrelated to Form I-9 compliance, which then prompts a Form I-9 audit; or a random audit could be conducted by Immigration and Customs Enforcement (ICE).

Whichever way an employer discovers it has a non-compliant program, it is likely too late unless the employer is prepared. When ICE serves a Notice of Inspection (NOI), the employer has only three days to produce the Forms I-9 requested. ICE will likely request a copy of the employer’s payroll records and may also request other supporting documentation such as a list of active and terminated employees, articles of incorporation and business licenses.

Consequences of non-compliance

If ICE finds technical errors (mistakes on the Form that can be corrected – e.g., failure to ensure that the employee dates Section 1 at the time of hire) or substantive errors (those that cannot be corrected because the employment eligibility failed when the form was completed – e.g., no box checked indicating the employee’s employment status), it could assess fines and/or penalties.  Fines include civil monetary penalties, and further, penalties could include criminal prosecution if the employer is found to have engaged in a “pattern or practice” of hiring, recruiting or referring unauthorized citizens for a fee. 

As of January 30, 2023, penalties for failing to comply with the Form I-9 rules include:

1. Civil fines:

a) Knowingly hiring, recruiting, referring, or retaining an unauthorized alien:

1. 1. 1. 1. 1. 1. First offense (per unauthorized alien): $676 - $5,404
               2. Second offense (per unauthorized alien): $5,404 - $13,508
               3. Third offense (per unauthorized alien): $8,106 - $27,018

b) Form I-9 paperwork violations (per Form I-9): $272 - $2,701

2. Debarment from government contracts

3. A court order requiring the payment of back pay to the individual discriminated against;

4. A court order requiring the employer to hire the individual discriminated against; and

5. Criminal penalties for engaging in a pattern or practice of hiring, recruiting or referring for a fee unauthorized noncitizens.

Employers must consider the impact of these penalties when reviewing Form I-9 compliance. If a company relies heavily on nonimmigrant workers (either through volume or for critical roles, which is almost always the case), it could lose them if they were not actually authorized to work.  Companies with government contracts could lose existing contracts and be barred from entering future ones. Further, the financial consequences of Form I-9 non-compliance could add up quickly (ICE has issued fines in the tens of millions of dollars, along with a press release, which could cause reputational harm).

Regardless of the type of fine assessed, as mentioned, an employer could also suffer reputational harm if the results of the audit are made public by ICE. Record settlements are often considered to be a deterrent, and ICE can (and does) issue press releases to announce findings of systemic visa fraud and abuse of immigration processes, even if the employer and ICE reach a financial settlement. Employers in highly competitive industries could see a loss of potential new talent (individuals unwilling to work for a company that risks its business by not complying with laws), and/or the loss of business (clients who do not wish to be associated with companies that are not compliant).

Identifying and mitigating risk

To identify and mitigate areas of risk, employers should thoroughly review their Form I-9 program and forms. Questions that employers should be able to answer include:

1. Is there a centralized system for maintaining and updating Forms I-9 (e.g., an electronic Form I-9 solution)?
2. Is there a formal procedure for employer designates who complete Form I-9 to escalate questions about documents and unique situations (e.g., internal individual with Form I-9 experience or outside counsel)?
3. Is there a compliant mechanism for meeting the specific government requirements for complying with a Form I-9 audit?
4. Has there been a recent internal audit of completed Forms I-9 to ensure that they are compliant and error-free?
5. Is there a compliant process for making corrections to errors identified on Forms I-9?

Given the potential fines and penalties associated with violations of the rules regarding Form I-9, and that areas of non-compliance are often not obvious when completing the retaining Form I-9, it is recommended that employers seek the guidance of immigration counsel to identify and mitigate areas of risk.

Need to know more?

For further information on immigration compliance or questions related to Form 1-9, please contact Of Counsel Brent Reilly at [email protected].

This blog was published on June 14, 2023, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please visit our dedicated COVID-19 site, subscribe to our alerts and follow us on LinkedIn, Twitter, Facebook and Instagram.