In 2009, ICE instituted a new tactic in its battle against the hire of undocumented workers: the dreaded I-9 audit. ICE has shifted away from the Bush-era raids and now conducts employment verification “audits.” The new face of workplace enforcement is the ICE Notice of Inspection (“NOI”), delivered by an ICE “auditor,” the equivalent of a neatly dressed, well-mannered, quiet-voiced ICE accountant. Putting its money where its mouth is, ICE recently notified 1,000 companies of upcoming I-9 audits, affecting employers of all sizes and in every state.

Although the visit is low-key, the NOI is not. The NOI will require the employer to provide a substantial number of documents:

“Form I-9, Employment Eligibility Verification” for:

  • all current employees
  • all former employees in accordance with mandatory retention requirements of 8 U.S.C. § 1324a(b)(3) (three years after date of hire, or one year after termination of employment, whichever date is later).

NOTE: ICE will take custody of the original Forms I-9 (and attached copies of identity documents). A receipt will be provided identifying the number of original Forms I-9 and other documents, all documents provided may be copies, except the I-9s ICE receives.

  • All copies made of any identification and work authorization documents verified in Section 2 of Form I-9.
  • Copies of any E-Verify confirmations generated for individual employees.
  • A list of all current and former employees (in accordance with Form I-9 retention requirements) identifying employee name, Social Security Number, hire date, and termination date. [An electronic EXCEL version of this list is preferred.]
  • Copies of quarterly wage and hour reports and/or payroll data for all employees (current and former) covering the period of the inspection (3Q2007 through 3Q2010). Quarterly Unemployment Insurance Tax Submissions to the Arizona Department of Economic Security for the periods specified are sufficient to meet this requirement.
  • Identification of Employer Identification Number (EIN) or Taxpayer Identification Number (TIN); owner address information, telephone number, and email address; copy of Articles of Incorporation or Organization; copies of state and local business licenses.
  • Identification as to whether the business is a participant in E-Verify or the Social Security Number Verification Service (SSNVS), and if so, the date(s) when participation began.

The NOI will require the documents to be turned over to ICE in three days, a time set by statute, and unlike the process in years past, no extensions of time will be granted.

If you receive a NOI, we suggest that you immediately contact Counsel for assistance to ensure that all I-9s and other documents being provided to ICE have been reviewed, corrected if necessary, and delivered to the auditor with an appropriate index.

The risk of imperfect or non-compliance is substantial. In February of 2010, Koch Foods (Cincinnati) paid a $536,000 fine for violation of the employment verification process, and for the hire of 161 undocumented workers discovered upon ICE’s review of company records. In September of 2010, Abercrombie & Fitch paid a $1,047,000 fine for failure to properly verify authorization of its workers using an electronic I-9 system that does not meet DHS requirements, resulting in 100% non-compliance. Where an ICE audit reveals more serious violations, such as an employee fudging the I-9s for personal gain, prison sentences have been imposed, and if the investigation reveals a pattern of harboring or transporting undocumented migrants, the fine and sentencing options increase.

Preparation is Key. These notices serve as a good reminder to employers to always be prepared for an ICE inspection. Employers should be conducting internal I-9 audits, and annual independent reviews of I-9 procedures and policies, carefully reviewing their hiring practices, and ensuring that HR receives regular compliance training. Internal I-9 audits often reveal that some I-9 forms have not been completely filled out, or that certain employees have not been re-verified after their work authorization has expired. It is much easier to correct these common mistakes now, rather than under the weighty pressure of an ICE audit. More importantly, ICE gives more weight to employer’s good faith compliance if the employer has audited its own I-9s prior to receiving an NOI.

In addition to internal I-9 audits, businesses should establish written I-9 and E-Verify policies and procedures that are uniformly practiced and enforced throughout the company, and the appropriate individuals should be designated and trained to handle a visit from ICE.

H-1B “Site Visits”

We continue to hear that contract “investigators” are still conducting site visits to H-1B employers to verify if the H-1B employee is working for the employer and performing the work described in the H-1B petition, and at the approved location. If there has been a change in the work location, be sure to amend the petition and, if necessary, obtain a new Labor Condition Application (LCA) from the Department of Labor. The USCIS contract investigators will want to question employers and their H-1B workers. We suggest a review of your H-1B employment processes to make sure that they are in compliance with the regulatory requirements.

If the site visit reveals disparity in any of the relevant aspects of the H-1B petition, the employer will receive a Notice of Intent to Revoke.

Wages: H-1B employees must be paid the higher of the “prevailing wage rate” or the wage rate being paid U.S. workers in that location in the same job category. The prevailing wage rate is found on the Labor Condition Application, which was included with the H-1B petition when it was submitted to USCIS.

The PAF: H-1B employers must keep an H-1B “Public Access File” (PAF) available for review by USCIS or the Department of Labor. The PAF is prepared prior to the beginning date of employment and should include the required documents as of the date the H-1B employment begins. We suggest that you audit your PAF files to be sure they are up to date.

End of Employment: Finally, if an H-1B worker’s employment ends before the expiration date of the approved period of employment, the employer must notify USCIS (by mail is sufficient). In addition, the employer must offer to pay the cost of the return (transportation only) of the H-1B worker to his or her home country. There are no regulations covering this requirement; we recommend that the offer of a one-way ticket to the employee’s home country be available for a period of 2-4 weeks after the final day of employment. Other types of arrangements may be appropriate, but the employer should be consistent with respect to all H-1B employees, irrespective of the location of their native country.