The ICE Man Cometh

How to survive a federal I-9 audit

By William F. Dolan

Eugene O’Neal’s classic play, The Iceman Cometh, was a gloomy story of people trapped in hopelessness. Some say that the play perfectly mirrors the feelings a staffing company endures when the modern day ICE Man — an auditor from U.S. Immigration and Customs Enforcement (ICE) — comes knocking on your door to inspect every I-9 form for every employee for the last three years. But do not despair. There is hope.

Starting in 2009, the government shifted its immigration law enforcement strategy to focus on employers. Since then, ICE has conducted thousands of audits, especially of large-volume employers. Staffing companies are a logical target.

Usually, a Notice of Inspection (NOI) either is mailed or hand-delivered by ICE agents. In extreme instances, ICE agents — armed with guns — will walk into your office and serve the NOI or a subpoena in person.

If ICE uses the NOI, the law requires that ICE gives you three days to gather all the requested I-9 documents and payroll records. A subpoena, however, can compel an immediate turnover. In addition, the Department of Labor can show up at any time and demand — without three days’ notice — to see your other employment records (though technically, I-9s are not within the DOL’s authority).

The audit may be done on site or ICE may require you to mail your original I-9s to its local office. All I-9 forms are checked against the DHS databases to assess the legality of the worker and against your payroll records to assess completeness.

It’s important to be prepared for and know how to respond to an actual audit.

1. Train your managers on I-9 completion and conduct internal audits regularly to spot problems before ICE does.
2. Keep I-9 forms in a separate file. It speeds up processing and allows ICE and DOL auditors to audit what the law says they can and no more.
3. For mail audits: Review and make copies of everything you send and use a courier service that gives proof of delivery.
4. Know your rights. If ICE shows up, insist on a written NOI and three business days’ notice. Never sign a waiver. Be polite and cooperative, but don’t answer questions about your employees or hiring practices. Tell the agent you will likely be hiring a lawyer and that you will respond in the allotted time.
5. If you spot errors while gathering I-9s, get legal advice before you correct anything. If you do amend a record, you cannot use correction fluid; be conspicuous about the change (e.g., different color ink), and annotate the date of the change.
6. If subpoenaed, stay out of the agent’s way and call your lawyer immediately. If things are at this stage, it is serious and — just as they say on TV — anything you say can and will be used against you.

When the audit is complete, ICE may issue one of several documents:

Notice of Discrepancies. States ICE is unsure about someone’s eligibility. You must share the notice with the employee and allow the employee to show ICE documentation to establish employment eligibility.

Notice of Suspect Documents. A list of employees whose records do not line up with the DHS databases. If the employee continues to work for you, you face fines or criminal prosecution.

Notice of Technical or Procedural Failures. Identifies technical violations and gives you 10 business days to correct the forms; left uncorrected, the technical failures become substantive violations.

Warning Notice. ICE identified violations, but lets you off with a warning (typically because ICE expects future compliance).

Notice of Intent to Fine (NIF). You will soon be hit with charging documents and either have to negotiate a settlement or go to an administrative trial.

Fines range widely — from $110 to $16,000 per violation. The severity depends on the nature of the violation and whether it was deliberate. For a more detailed explanation of the process and how fines are set, see www.ice.gov/doclib/news/library/factsheets/pdf/i9-inspection.pdf.

William F. Dolan is a partner with the law firm Jones Day. He can be reached at wdolan@jonesday.com.

This article is not legal advice. It is intended for general informational purposes only and may not be quoted or referred to in any other publication or proceeding without the author’s permission. It is not intended to create an attorney-client relationship. The views set forth herein are personal and do not necessarily reflect those of the author’s firm.