MSA Investigations Blog

Form I-9 Audits: What Employers Should Know

Posted by John Maguire on Mon, Aug 18, 2014 @ 05:18 PM

At the moment, Form I-9 compliance is a hot-button issue in the United States. Immigration and Customs Enforcement (ICE) has recently increased its I-9 audits, which means more employers are being fined for improper filings. A Form I-9 is a mandatory document for employees to complete prior to working for money in the U.S. It was mandated as part of the Immigration Reform and Control Act of 1986 and with the introduction of the Internet, E-Verify has become a vital part of ensuring the identity of potential employees. E-Verify uses a Form I-9 to verify an individual's identity and employment eligibility with information retained by the Department of Homeland Security (DHS) and Social Security Administration (SSA).

Filing a Form I-9 is a simple process. However, filing incomplete forms or bypassing the submission altogether, carries some stiff penalties. Here are some consequences of Form I-9 violations:

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1) Civil Fines


  • Companies can be fined as low as $110 and as much as $1,100 for failing to comply with Form I-9 requirements. Knowingly hiring a person unauthorized to work in the United States can range from $375 up to $16,000 in civil penalties. Committing document fraud can be punishable in fines ranging from $375 to $6,500. Unlawfully discriminating against an authorized worker can cost a company at least $375 and up to $16,000. Finally, asking an employee for an indemnity bond can be fineable by $1,100 or a full refund of the bond's value. 


2) Criminal Penalties


  • If convicted of hiring, recruiting or referring unauthorized aliens a company would have to pay at least $3,000 or the individuals deemed responsible could face up to six months in prison. 


3) Debarment from Government Contracts


  • Depending on the security clearance or government agency employing the offending company, a government contract could be lost due to Form I-9 violations. 


4) Restitution


  • A company guilty of discriminating against an individual in connection with I-9s, could either be forced to remit back pay to the employee or mandated to hire the individual.


Companies being audited by ICE should comply with all requests for documentation. Showing good will can have a beneficial impact on the ultimate sentence. The Office of the Chief Hearing Officer (OCAHO) is the government agency which adjudicates  I-9 cases. The administrative law judge (ALJ) decides whether or not the fines levied by ICE are fair. In
certain instances, the ALJ may feel the amount is excesive and adjust the total.  In other instances where a violator shows blatant disregard for the guidelines, a harsher fine or even possible jail time are considerations. OCAHO can, also, deem the fine to be fair and take no further action.

In early 2014, a New York restaurant was found negligent in filing nearly 300 I-9s and assessed a fine of $264,605. The ensuing OCAHO hearing found that the fines levied by ICE
were, in fact, too harsh and they were reduced to $88,700. This reduction was in consideration of the restaurant's financial condition. The ALJ recognized the fine was almost 50 percent of the restaurant's total income in 2011 and could have caused its demise. Fines were imposed due to the serious nature of the violations, which, in some cases, was a  total disregard for filing I-9s.

It is imperative for businesses to be current on all I-9 rules and regulations. ICE audits have increased in the last several years and the fines for each violation keeps pace with inflation. In 2008, USCIS adjusted the value of fines due to Form I-9 violations to be more in line with inflation. These fines could rise in the coming years, as could the number of audits performed by ICE. 


For more information please contact MSA Investigations.


Tags: Form I-9 audits, OCAHO, fines