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Starting off the New Year Right: A Good Time for Self-Auditing I-9 Compliance

As we are on the cusp of a new administration that has identified immigration enforcement to be a primary focus, now is an ideal time to ensure that verification of employees’ legal authorization to work in the United States is timely performed and documented. By a recent Second Circuit Court of Appeals decision,1 we were reminded to complete Forms I-9 within three days of each employee’s date of hire. Also, those forms must be retained after an employee’s termination for the later of: three years after the date of hire or one year after the date of termination. If an employer does not comply with those requirements, it may face civil penalties between $110 and $1,100 per individual violation.2

In late December, the Second Circuit reviewed a case where Immigration and Customs Enforcement (“ICE”) had identified 138 substantive violations during an audit: The employer did not retain completed Forms I-9 for 84 former employees and did not execute a Form I-9 for any of its current 54 employees within three business days of hire. ICE fined the employer about $795 for each violation, which amounted to approximately $110,000 in fines. An Administrative Law Judge reduced the fine to $75,600 in light of mitigating factors such as the small size of the business, evidence that the employer did not act in bad faith, a lack of a history of violations, and no evidence that the employer actually hired unauthorized workers.

On appeal, the court rejected the employer’s argument that it “substantially complied” with the employee verification requirement by keeping each employee’s identifying documents on file. The court found that the relevant regulations explicitly state that copying underlying documents and retention of such copies do not satisfy the employer’s obligation to fully complete Section 2 of the Form I-9. Our takeaway, then, is the importance of completing the Form I-9 within three business days of each employee’s date of hire and retaining these records for the required period. A self-audit would be a proactive way to ensure compliance and would allow for identification of any practices that may require adjustment. Self-audits allow for an opportunity to correct errors and foreclose the need for corrections in the course of an ICE audit, which, as the Second Circuit noted, does not require any advanced notice for the agency to commence.

1Buffalo Transportation, Inc. v. United States of America, No. 15-3959-ag (2d Cir. Dec. 22, 2016).

2 8 C.F.R. § 274a.10(b)(2).

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.