An article in the Wall Street Journal and another in Packer News report that “in an email” to an unknown source, Immigration Customs and Enforcement (ICE) said it will issue I-9 audit notices to over a 1000 employers as part of its national strategy to get more employers to stop hiring workers without legal employment status. Notices to Inspect will be issued across industries. This should come as no surprise to employers. In my post last month, ICE to Establish I-9 Center and Increase Audits, I mentioned that ICE set up a new I-9 Compliance Center. The Center is in Crystal City, Virginia and will house 15 auditors. It sounds like a drop in the bucket in terms of staffing. ICE reported on January 20, 2011, that “from fiscal year 2009 to date, ICE has initiated Form I-9 inspections against 3,769 businesses across the nation.” This still doesn’t seem like many employers are audited, but fines can run into the millions of dollars for a single employer. With the new Compliance Center, ICE means business, and no doubt will seek to exceed the annual numbers of audits.

Employers are encouraged to conduct in-house audits with professional assistance BEFORE ICE comes knocking on the door with a three-day notice to turn over I-9s. If an employer has not been using I-9s at all, or lacks an efficient and compliant system, three days is very little time to become compliant. Moreover, an audit can be very stressful for staff, not to mention expensive if counsel is brought in when there is a crisis, given the short notice. In addition, costly mistakes can be made in the process of getting ready to turn documents over to ICE. For example, improperly editing I-9s or throwing out old ones could result in fines.

What’s the worst that can happen to an employer in an ICE audit situation? Here is a non-exclusive list of what non-compliant employers can face:
-Employees stop showing up for work -Some employees might be fired (correctly or wrongfully)
-Financial penalties per technical violation (forms filled out wrong)
-Financial penalties per substantive violation (forms not filled out at all, not signed, not completed, documents not verified, etc.)
-Financial penalties per unauthorized worker knowingly hired -Criminal sanctions (jail or fines or conditions) for a pattern or practice of knowingly hiring unauthorized workers -Criminal liability for a range of white collar crimes, document fraud, smuggling, conspiracy, etc., if there is a criminal enterprise involved -Asset forfeiture -Shareholder suits -Bad publicity for the company and/or key executives or managers -Reduced revenues or business closure -Discrimination suits by the Department of Justice for improper firing of protected workers -Lawsuits by competitors for unfair competition
ICE publishes information about past cases, some of which are strictly civil audits while others involve large, complicated criminal enterprises. In an earlier post, Employers Should be Aware of ICE I-9 Audit History, I recommended that employers take a look at ICE’s penalty scheme and press releases about past audits and raids.

Many business organizations such as the U.S. Chamber of Commerce and major unions oppose massive audit schemes and mandated use of E-Verify, the government’s online database, until at least two things happen: a legalization program and improved data reliability with biometrics in the E-Verify system. A legalization program would put millions of workers’ information into the E-Verify database system as part of the legalization process. When coupled with biometrics, the numbers of false positives and negatives would be reduced. RIght now, identity theft and inconsistencies between Social Security information and immigration databases often result in tentative non-matches. Other reasons for inadequate data in the E-Verify system, having nothing to do with immigrants without status, include name changes, a glitch in Social Security having to do with recently naturalized citizens, similar names, and identity theft that isn’t limited to immigrant populations. Presently, the number of employers using E-Verify voluntarily is under 15%. However, a number of states have enacted statutes to make E-verify mandatory. Arizona’s statute is presently before the U.S. Supreme Court on federal preemption issues. Meanwhile, as ICE steps up its I-9 audits, employers need to be compliant regardless of whether E-Verify is used. The I-9 rules and audit authority have been around since 1986.