Immigration Compliance

In the age of the increasingly aggressive I-9 compliance audits and “generous” fines imposed by ICE to settle immigration violations uncovered during its investigations, immigration matters are shifting from traditional handling by human resources professionals to in-house legal departments. With the increasing frequency of ICE's audits and severity of fines levied against violators, to say nothing about significant disruption to company operations due to auditors' visits, it is advisable to use legal expertise to audit the business's current practices and set legally sound policies and procedures before charging HR or administrative professionals with their implementation.

Since most of us did not devote law school years to an in-depth study of the Immigration and Nationality Act and, years after the United States Citizenship and Immigration Services (USCIS) replaced its predecessor, still refer to this government agency as INS, let us refresh a few key compliance rules and best practices.

Key Points

Every U.S. employer, regardless of size and whether it employs foreign workers or not, must complete employment eligibility verification and maintain Form I-9 for each employee hired after Nov. 6, 1986. While it is permissible to keep I-9 files in either hard copy or electronic format, these files should be kept separate and apart from individual personnel files. Additionally, it is advisable to keep I-9 records for current workers separate from those of former employees. In case of an audit, you do not want to inadvertently turn in records that are not subpoenaed.

The following rules should help put an efficient company-wide compliance system in place, regardless of business industry or company size:

• Establish clear employment eligibility verification procedures, assign HR or legal department personnel to be in charge, and assure training and follow-up training.
• Decide if the company will use E-Verify or another government system ( e.g. , IMAGE) for the I-9 process.
• If the government system is not selected, determine whether I-9 compliance will remain manual/hard copy-based or electronic.
• Determine whether or not documentation presented for I-9 verification is to be copied, and clearly formulate any related policies or policy changes.
• Perform an in-house audit of I-9 files for conformity with the I-9 best practices, and plan and implement corrective measures. Assure that HR personnel is trained on appropriate I-9 correction practices and follows them consistently.
• Set a company-wide system for a twice a year I-9 self-audit and a reminder on your due diligence list to review I-9 files at the time of any corporate changes ( e.g. , mergers, acquisitions, layoffs, and seasonal hiring surges)
• Schedule refresher training for HR and administrative professionals charged with I-9 responsibilities on a regular basis, using outside expertise as necessary, and keep records of all such training

As every U.S. employer is obligated to review documentation presented by every employee hired after Nov. 6, 1986, and to fully complete the latest edition of Form I-9 in effect at the time of hire, the strongest employment eligibility compliance policies are centered on a few basic points with related procedures set to support and implement them:

Three-Day Rule

Section 1 of Form I-9 should be fully completed for each worker on their first day of hire, and the I-9 process ( i.e. , documents review and Section 2 execution by the company's representative) should be finished within three days of hire.

Accept Valid Documents Selected by Employee

During Section 1 completion, the worker should be given an opportunity to select one document from List A on the back of Form I-9, or one document from List B and one document from List C. An employee chooses documents to present for verification, and the employer is legally obligated to accept facially valid documents. Importantly, offer letters and employment agreements should not list specific documents a new hire is to bring at the start of employment or any time thereafter. If the employer has a legitimate need to review documents that can also be used for I-9 verification ( e.g. , a company-wide rule for Social Security Cards presented for payroll purposes or driver's license for certain positions), do not mix these otherwise legitimate requirements with the I-9 process, and clearly state the non'I-9 related reasons for these documents.

Maintenance and Upkeep

I-9 files, which contain fully completed and executed Forms I-9 and copies of documents evidencing employment eligibility (if the company copies documentation presented as part of the employment eligibility verification), should be kept separately from personnel records and other employer-maintained documentation. This includes I-9 files for current and former employees. Businesses with multiple offices may choose to keep the I-9 files in a centralized location or at individual offices. In case of an audit, the company should be given reasonable time to transport the I-9 files to the ICE preferred location.

Reverification

All documents presented for I-9 purposes should be unexpired at the time of verification. Identity confirming documents (e.g., driver's license) do not need to be re-checked upon expiration. However, temporary employment-authorizing documents (e.g., Employment Authorization Document or EAD) should be calendared for re-verification by the their expiration time. When performing reverification, an employer should not request or require that a renewed document be presented. Instead, the worker should be allowed to decide which documentation from List A or from Lists B and C to present. The employer's representative should complete Section 3 of Form I-9 at the time of reverification.

Store

Each worker's I-9 file should be retained throughout their tenure at the company. Upon the employee's departure, the I-9 file should be kept for one year from the date of employment termination or three years from the date of hire, whichever comes later.

Purge, When Allowed

Purge I-9 files upon the mandatory record maintenance period completion as per the above, but even outdated records should not be destroyed upon an audit subpoena issuance.

Perform Self-Checks

An in-house audit is the best way to ensure your records are in order and to avoid last-minute efforts to comply when auditors are at the door. It is advisable to perform in-house audits every six months and immediately after any significant business changes, such as hiring surges or layoffs. Provide annual training and refresher training to I-9-responsible personnel.

Exercise Due Diligence

Include I-9 review in your due diligence list when preparing for a merger or acquisition of another company or its employees. The law allows an acquiring entity to “inherit” the purchased business's I-9 records, but remember that this also means inheriting all related liabilities.

Act in Good Faith

Properly maintained I-9 compliance procedures and records protect businesses, but only if your company acts in good faith. If the government proves that the employer has actual knowledge or reason to believe its employees lack legal status and are unauthorized to work, perfect documentary compliance will not help ' and worse ' may be viewed as evidence of concerted efforts to defraud. Supervisors' knowledge of an employee's illegal status would be imputed upon the company under the actual knowledge concept. Under constructive knowledge (i.e., “the employer should have known”), credible information regarding unauthorized employment from trustworthy sources and/or I-9 files documentation with obvious deficiencies will be viewed as evidence against the employer.

Use Immigration Expertise

Have an immigration specialist on call in case of a tricky I-9 documents verification or if you are facing auditors. With short audit preparation timelines upon ICE's subpoena receipt (i.e., three days), having counsel on standby will help you hit the ground running.

The Anatomy of an Audit

The hallmark of the day is that, irrespective of the industry or size of business, an employer may become a target of a random or not-so-random audit (e.g., through a former or current worker's complaint or even a competitor's claim of unauthorized hiring). The current ICE audit approach is centered on an efficient and economically sound model, with the auditors serving a subpoena providing a three-day notice to produce the original I-9 files for the business and outlining documentation for provision, and issuing Notice of Fine upon the audit conclusion.

More often than not, a subpoena is not limited to the I-9 files, but also includes corporate documents including articles of incorporation, employee roster, and wage and hour records. A three-day notice is mandatory and standard, but, depending on the specific circumstances (such as a multi-office situation with I-9 files kept at headquarters), the notice period may be extended based on the subjective business needs. Importantly, extension of the notice period should not be taken for granted and needs to be negotiated with the auditors as quickly as possible.

Even the diligent employer that follows the recommended best practices of I-9 compliance should never waive the notice period and simply turn over the subpoenaed records to the auditors. Rather, the subpoena should be reviewed with in-house attorneys and immigration counsel. The way you use the three-day notice period could make a substantial difference to the audit outcome.

First, assess the current state of I-9 compliance. With the limited amount of time at your disposal and depending on the number of workers at your company, the best approach is to initially review a representative sampling of I-9 forms and accompanying records. If the review indicates deficiencies, the three-day notice period can be used to correct certain mistakes and even to belatedly complete I-9 forms when they are missing in their entirety. Importantly, all corrections must be initialed and dated with the current date, so the auditors are not misled regarding their timing, and the company is not accused of acting in bad faith. Even the belated efforts, if performed correctly, should provide the company with some credit for its efforts to self-correct. Additionally, it is important to determine whether or not all subpoenaed non-I-9-file-related documents are requested legitimately, and whether an argument can and should be made regarding their production.

Upon presenting the I-9 files to auditors, you may have to await the audit outcome for a few weeks or even months. This waiting time is best spent performing a post-audit self-assessment, establishment and implementation of comprehensive immigration compliance practices as per the discussion above, and, importantly, making strategic decisions if audit documentation preparation has indicated a problem with unauthorized workforce.

Often, as the I-9s are turned in to the auditors, the company has already benefited from immigration counsel's expertise and determined that a segment of the workforce is unauthorized. In case of the latter, it is easy to predict that one of the audit outcomes would be the loss of the illegal workers. This is where strategic planning for the remedial measures and future business operations, as well as prior employment policies and procedures, become critical. Importantly, the way you approach this important junction may help or hurt the company when the auditors return with the Notice of Fines. The proper post-audit measures and diligent compliance efforts may affect the outcome of settlement negotiations with the government.

Conclusion

A comprehensive immigration reform will, hopefully, arrive, but in the meantime, taking a back seat to the immigration compliance is a costly and misguided decision for any business to make. When an I-9 compliance program is broken down into clear, gradual steps, the time invested in this effort pays off generously when ICE is at your door.

Irina B. Plumlee is a shareholder in the Dallas, TX, office of Munsch Hardt Kopf & Harr, P.C. Her practice focuses on business and family immigration, including international executive and managerial personnel transfers, investment-based (EB-5) immigration proceedings and U.S. work visas for professional workers, and employment and family-based permanent immigration proceedings, as well as on employers' I-9 compliance, and fairness in employment practices. She can be reached at [email protected].

Many of us are guilty of complaining about our outdated immigration laws and burdensome processes of applying for immigration benefits for foreign workers and complying with a set of regulations that turn employers into makeshift cops responsible for creating barriers to illegal employment. With the dire and obvious need for immigration reform and the equally obvious slow move toward adopting a comprehensive (or, at this point, even a non-comprehensive) solution, some companies fatigued by the debate and hopeful for the slow enforcement choose to put immigration compliance on the back burner.

ICE Audits

As we are nearing the 30th anniversary of the 1986 law mandating Form I-9 Employment Eligibility Verification, there still is a sizeable segment of U.S. businesses that have not taken even the most basic steps to protect themselves in case of an Immigration and Customs Enforcement (ICE) audit. While this approach provides short-term savings of time and money, it has a proven track record of being highly detrimental to the business's future in the long- and even medium-term.

In the age of the increasingly aggressive I-9 compliance audits and “generous” fines imposed by ICE to settle immigration violations uncovered during its investigations, immigration matters are shifting from traditional handling by human resources professionals to in-house legal departments. With the increasing frequency of ICE's audits and severity of fines levied against violators, to say nothing about significant disruption to company operations due to auditors' visits, it is advisable to use legal expertise to audit the business's current practices and set legally sound policies and procedures before charging HR or administrative professionals with their implementation.

Since most of us did not devote law school years to an in-depth study of the Immigration and Nationality Act and, years after the United States Citizenship and Immigration Services (USCIS) replaced its predecessor, still refer to this government agency as INS, let us refresh a few key compliance rules and best practices.

Key Points

Every U.S. employer, regardless of size and whether it employs foreign workers or not, must complete employment eligibility verification and maintain Form I-9 for each employee hired after Nov. 6, 1986. While it is permissible to keep I-9 files in either hard copy or electronic format, these files should be kept separate and apart from individual personnel files. Additionally, it is advisable to keep I-9 records for current workers separate from those of former employees. In case of an audit, you do not want to inadvertently turn in records that are not subpoenaed.

The following rules should help put an efficient company-wide compliance system in place, regardless of business industry or company size:

• Establish clear employment eligibility verification procedures, assign HR or legal department personnel to be in charge, and assure training and follow-up training.
• Decide if the company will use E-Verify or another government system ( e.g. , IMAGE) for the I-9 process.
• If the government system is not selected, determine whether I-9 compliance will remain manual/hard copy-based or electronic.
• Determine whether or not documentation presented for I-9 verification is to be copied, and clearly formulate any related policies or policy changes.
• Perform an in-house audit of I-9 files for conformity with the I-9 best practices, and plan and implement corrective measures. Assure that HR personnel is trained on appropriate I-9 correction practices and follows them consistently.
• Set a company-wide system for a twice a year I-9 self-audit and a reminder on your due diligence list to review I-9 files at the time of any corporate changes ( e.g. , mergers, acquisitions, layoffs, and seasonal hiring surges)
• Schedule refresher training for HR and administrative professionals charged with I-9 responsibilities on a regular basis, using outside expertise as necessary, and keep records of all such training

As every U.S. employer is obligated to review documentation presented by every employee hired after Nov. 6, 1986, and to fully complete the latest edition of Form I-9 in effect at the time of hire, the strongest employment eligibility compliance policies are centered on a few basic points with related procedures set to support and implement them:

Three-Day Rule

Section 1 of Form I-9 should be fully completed for each worker on their first day of hire, and the I-9 process ( i.e. , documents review and Section 2 execution by the company's representative) should be finished within three days of hire.

Accept Valid Documents Selected by Employee

During Section 1 completion, the worker should be given an opportunity to select one document from List A on the back of Form I-9, or one document from List B and one document from List C. An employee chooses documents to present for verification, and the employer is legally obligated to accept facially valid documents. Importantly, offer letters and employment agreements should not list specific documents a new hire is to bring at the start of employment or any time thereafter. If the employer has a legitimate need to review documents that can also be used for I-9 verification ( e.g. , a company-wide rule for Social Security Cards presented for payroll purposes or driver's license for certain positions), do not mix these otherwise legitimate requirements with the I-9 process, and clearly state the non'I-9 related reasons for these documents.

Maintenance and Upkeep

I-9 files, which contain fully completed and executed Forms I-9 and copies of documents evidencing employment eligibility (if the company copies documentation presented as part of the employment eligibility verification), should be kept separately from personnel records and other employer-maintained documentation. This includes I-9 files for current and former employees. Businesses with multiple offices may choose to keep the I-9 files in a centralized location or at individual offices. In case of an audit, the company should be given reasonable time to transport the I-9 files to the ICE preferred location.

Reverification

All documents presented for I-9 purposes should be unexpired at the time of verification. Identity confirming documents (e.g., driver's license) do not need to be re-checked upon expiration. However, temporary employment-authorizing documents (e.g., Employment Authorization Document or EAD) should be calendared for re-verification by the their expiration time. When performing reverification, an employer should not request or require that a renewed document be presented. Instead, the worker should be allowed to decide which documentation from List A or from Lists B and C to present. The employer's representative should complete Section 3 of Form I-9 at the time of reverification.

Store

Each worker's I-9 file should be retained throughout their tenure at the company. Upon the employee's departure, the I-9 file should be kept for one year from the date of employment termination or three years from the date of hire, whichever comes later.

Purge, When Allowed

Purge I-9 files upon the mandatory record maintenance period completion as per the above, but even outdated records should not be destroyed upon an audit subpoena issuance.

Perform Self-Checks

An in-house audit is the best way to ensure your records are in order and to avoid last-minute efforts to comply when auditors are at the door. It is advisable to perform in-house audits every six months and immediately after any significant business changes, such as hiring surges or layoffs. Provide annual training and refresher training to I-9-responsible personnel.

Exercise Due Diligence

Include I-9 review in your due diligence list when preparing for a merger or acquisition of another company or its employees. The law allows an acquiring entity to “inherit” the purchased business's I-9 records, but remember that this also means inheriting all related liabilities.

Act in Good Faith

Properly maintained I-9 compliance procedures and records protect businesses, but only if your company acts in good faith. If the government proves that the employer has actual knowledge or reason to believe its employees lack legal status and are unauthorized to work, perfect documentary compliance will not help ' and worse ' may be viewed as evidence of concerted efforts to defraud. Supervisors' knowledge of an employee's illegal status would be imputed upon the company under the actual knowledge concept. Under constructive knowledge (i.e., “the employer should have known”), credible information regarding unauthorized employment from trustworthy sources and/or I-9 files documentation with obvious deficiencies will be viewed as evidence against the employer.

Use Immigration Expertise

Have an immigration specialist on call in case of a tricky I-9 documents verification or if you are facing auditors. With short audit preparation timelines upon ICE's subpoena receipt (i.e., three days), having counsel on standby will help you hit the ground running.

The Anatomy of an Audit

The hallmark of the day is that, irrespective of the industry or size of business, an employer may become a target of a random or not-so-random audit (e.g., through a former or current worker's complaint or even a competitor's claim of unauthorized hiring). The current ICE audit approach is centered on an efficient and economically sound model, with the auditors serving a subpoena providing a three-day notice to produce the original I-9 files for the business and outlining documentation for provision, and issuing Notice of Fine upon the audit conclusion.

More often than not, a subpoena is not limited to the I-9 files, but also includes corporate documents including articles of incorporation, employee roster, and wage and hour records. A three-day notice is mandatory and standard, but, depending on the specific circumstances (such as a multi-office situation with I-9 files kept at headquarters), the notice period may be extended based on the subjective business needs. Importantly, extension of the notice period should not be taken for granted and needs to be negotiated with the auditors as quickly as possible.

Even the diligent employer that follows the recommended best practices of I-9 compliance should never waive the notice period and simply turn over the subpoenaed records to the auditors. Rather, the subpoena should be reviewed with in-house attorneys and immigration counsel. The way you use the three-day notice period could make a substantial difference to the audit outcome.

First, assess the current state of I-9 compliance. With the limited amount of time at your disposal and depending on the number of workers at your company, the best approach is to initially review a representative sampling of I-9 forms and accompanying records. If the review indicates deficiencies, the three-day notice period can be used to correct certain mistakes and even to belatedly complete I-9 forms when they are missing in their entirety. Importantly, all corrections must be initialed and dated with the current date, so the auditors are not misled regarding their timing, and the company is not accused of acting in bad faith. Even the belated efforts, if performed correctly, should provide the company with some credit for its efforts to self-correct. Additionally, it is important to determine whether or not all subpoenaed non-I-9-file-related documents are requested legitimately, and whether an argument can and should be made regarding their production.

Upon presenting the I-9 files to auditors, you may have to await the audit outcome for a few weeks or even months. This waiting time is best spent performing a post-audit self-assessment, establishment and implementation of comprehensive immigration compliance practices as per the discussion above, and, importantly, making strategic decisions if audit documentation preparation has indicated a problem with unauthorized workforce.

Often, as the I-9s are turned in to the auditors, the company has already benefited from immigration counsel's expertise and determined that a segment of the workforce is unauthorized. In case of the latter, it is easy to predict that one of the audit outcomes would be the loss of the illegal workers. This is where strategic planning for the remedial measures and future business operations, as well as prior employment policies and procedures, become critical. Importantly, the way you approach this important junction may help or hurt the company when the auditors return with the Notice of Fines. The proper post-audit measures and diligent compliance efforts may affect the outcome of settlement negotiations with the government.

Conclusion

A comprehensive immigration reform will, hopefully, arrive, but in the meantime, taking a back seat to the immigration compliance is a costly and misguided decision for any business to make. When an I-9 compliance program is broken down into clear, gradual steps, the time invested in this effort pays off generously when ICE is at your door.

Irina B. Plumlee is a shareholder in the Dallas, TX, office of Munsch Hardt Kopf & Harr, P.C. Her practice focuses on business and family immigration, including international executive and managerial personnel transfers, investment-based (EB-5) immigration proceedings and U.S. work visas for professional workers, and employment and family-based permanent immigration proceedings, as well as on employers' I-9 compliance, and fairness in employment practices. She can be reached at [email protected].