Emerging Trends with ICE I-9 Audits

[Editor’s Note: today’s blog is courtesy of Paul L. Zulkie of Zulkie Partners LLC.] Within months of the Presidential Inauguration, the Obama Administration announced a new approach for worksite enforcement. In July 2009, it was clear that businesses would see more audits than they had in years. In November 2009, over 1,000 businesses associated with critical infrastructure received Notices of Inspection. In June 2010, Immigration and Customs Enforcement (ICE) released its 5-year strategic plan reaffirming its commitment towards implementing an effective worksite enforcement program, which includes aggressive criminal and civil enforcement against employers who knowingly violate the law; and continued implementation of programs, such as E-Verify andIMAGE, which are aimed at encouraging employer participation in the process. The change in the focus of worksite enforcement under President Obama stands in sharp contrast to the philosophy of the Bush Administration which placed more emphasis on worksite raids resulting in mass arrests of undocumented workers as well as the criminal prosecution of business owners and managers. The reemergence of I-9 audits and the assessment of civil penalties as an enforcement priority exposes a certain group of businesses to significant liability: those companies who do not knowingly hire undocumented workers but who have traditionally viewed I-9 compliance as an unnecessary nuisance and not one that they should take seriously. Too many businesses relegate I-9 preparation to entry level administrative and human resource personnel who have never been trained on the proper procedures and who work in positions where there is often high turnover. These companies also have dismissed suggestions from outside counsel that internal quality control audits on a periodic basis would be a prudent course of action. Companies that have always remained in the world of paper I-9s have never benefited from the robust tools and quality control features that an electronic I-9 platform can offer. Sadly, by the time ICE serves a Notice of Inspection and asks to review a company’s I-9s the opportunity for pro-active compliance is often replaced by a damage control fire drill. Having been involved in a number of  recent I-9 audits, as well as comparing notes with attorneys around the country, I can offer an executive summary of the fairly predictable sequence of events following the original visit by the ICE agent who serves the Notice of Inspection:

  • Review of I-9s by the ICE Forensic Auditor
  • Service of Notice of Technical Violations for lesser and correctible paperwork errors
  • Service of Notice of Suspect Documents for those employees ICE feels may be undocumented workers
  • Termination of employees listed on the Notice of Suspect Documents who cannot establish their employment eligibility
  • Service of the Notice of Substantive Violations for more serious and largely uncorrectable paperwork errors

For many employers, the final step-Service of the Notice of Substantive Violations-can be a death sentence. Recently, in response to prodding and a Freedom of Information Act request, ICE provided the American Immigration Lawyers Association with copies of ICE’s internal policy guidance on worksite enforcement generally, as well as the methodology of calculating civil penalties for paperwork violations. The memo is extremely long and the details are well beyond the scope of this posting, but it is important to note that policy memo describes various aggravating and mitigating factors that go into the mix of setting civil penalties as well as  “multipliers” that can push the cost of every substantive paperwork violation into the $1,000 range. Among the multipliers are the percentage of I-9s containing substantive violations and the percentage of the work force that had “suspect” documents. Small and medium sized business have recently been faced with ICE demands for civil penalties well into six figures, a price that would push many companies into bankruptcy. The recently released ICE documents suggest that additional, superceding field instructions will be forthcoming. It is hoped that the Obama administration will issue such guidance soon and that it will offer a sensible, transparent approach to worksite enforcement that will not put companies out of business, thereby adding to the unemployment of U.S. workers. While worksite compliance is very important and those who violate our criminal statutes should be prosecuted, at the end of the day substantive I-9 violations are still just paperwork violations, and not the knowing hire of undocumented workers.