To Audit, or Not to Audit: That is the I-9 Question

For some time, employers have been confused about how to handle situations relating to potential undocumented workers in their workforces. On December 14, 2015, to address some of this confusion, the U.S. Department of Homeland Security’s Immigration and Customs Enforcement (ICE) and the U.S. Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) jointly prepared a guidance memorandum clarifying how to handle internal I-9 audits.

The ICE-OSC memorandum, “Guidance for Employers Conducting Internal Employment Eligibility Verification Form I-9 Audits,” which is offered in a question-and-answer format, runs through many of the common questions that employers face when deciding whether to perform internal I-9 audits. The cornerstone for much of the guidance provided in the memorandum is employers ensuring consistency and transparency in their approach to internal I-9 audits, and properly documenting any corrective action taken. An inherent tension between the focus of ICE and OSC enforcement, however, means that even the best-intentioned employers will need to hew to a course of action that carefully balances proactive effort to ensure I-9 compliance against a potentially countervailing caution to avoid conduct that could be found to be discriminatory.

Following is a more detailed review of some of the highlights  contained in the memorandum, as well as suggestions on how employers can build a comprehensive—and compliant—internal I-9 audit procedure for their companies.

“Tempt not a desperate man.” (Romeo and Juliet)

Employers often get themselves into trouble by performing “selective” I-9 audits. Unfortunately, even when conducted with pure or naive intentions, selective internal audits can result in claims of discrimination. This includes scenarios in which employers require existing employees to complete new Form I-9 without sufficient justification.

Accordingly, employers should always consider the purpose and scope of an audit, then determine how to—and who will—communicate information to employees. As the ICE-OSC memorandum highlights, employers should consider the following when communicating with employees:

• the reasons for the internal audit;
• what employees should expect from the process; and
• whether the internal audit is independent or in response to a government directive.

Employers should also consider the medium by which the communication should be delivered. The best method is to communicate in writing and include mechanisms to track delivery of the communication (e.g., an email transmission of a letter drafted by the human resources department). It is also important that the audit process remain transparent, a goal that can be achieved by communicating to employees how questions or concerns related to the internal audit can be voiced and answered.

Finally, an employer must consider how it will ensure consistent communication standards when addressing Form I-9 deficiencies. ICE’s and OSC’s suggested practices include:

• notifying the affected employee, in private, of the specific deficiency;
• providing the employee with copies of his or her Form I-9, any accompanying Form I-9 documents, and any other documentation showing the alleged deficiency; and
• if the employee is not proficient in English, communicating in the appropriate language when possible.

Again, the key is consistency and transparency. By following these steps, you will build the necessary foundation to help your organization avoid discrimination claims while achieving your goals of performing a thorough I-9 audit.

“What’s done is done.”(Macbeth)

What do you do when, in the course of your audit, you find an error or omission on a Form I-9? Well, this depends on where the error or omission occurs. But, as a general rule, the key is to not discard or apply correction fluid (e.g., Wite-Out) to the Form I-9. Instead, the ICE-OSC memorandum provides the following guidance:

Form I-9 Section 1

An employer must not correct errors or omissions in Section 1 of the Form I-9. Instead, the employer should ask the employee to correct the error. When doing so, the employee should:

• draw a line through the incorrect information;
• enter the correct or omitted information; and
• initial and date the correction or omitted information.

If an employee needs assistance correcting or entering omitted information in Section 1, the employee can have a preparer and/or translator help with the correction. The preparer and/or translator should:

• draw a line through the incorrect information and enter the correct information or note the omitted information;
• have the employee initial and date the correction or omitted information, if the employee is able; and
• initial and date the correction or omitted information next to the employee’s initials.

Furthermore, if the preparer and/or translator did not previously complete the preparer and/or translator certification block, he or she should:

• complete the certification block; or
• if the certification block was previously completed by a different preparer and/or translator he or she should:
  • draw a line through the previous preparer’s and/or translator’s information; and
  • enter the new preparer’s and/or translator’s information (and indicate that he or she is the preparer and/or translator “for corrections”).

If the employee is no longer working for the employer, the employer should attach to the existing Form I-9 a signed and dated statement identifying the error or omission and explain why corrections could not be made.

If the employer finds that Section 1 was never completed or is missing, the current version of the Form I-9 should be completed as soon as possible. But the employer should not backdate the form. Instead, the employer should clearly state the actual date employment began in the certification portion of Section 2. The employer should also attach a signed and dated explanation of the corrective action taken.

Form I-9 Section 2 or 3

If there are multiple errors in Section 2 or in Section 3, the employer may complete sections 2 and/or 3 on a new Form I-9 and attach it to the previously completed form. The employer should also attach to an existing Form I-9 an explanation of the changes made or the reason a new Form I-9 was completed, and sign and date the explanation. If there are not multiple errors, the best way to correct the form is to:

• draw a line through the incorrect information;
• enter the correct or omitted information; and
• initial and date the correction or omitted information.

As with Section 1, if the employer finds that Section 2 was never completed or is missing, the current version of the Form I-9 should be completed as soon as possible. But the employer should not backdate the form. Instead, the employer should clearly state the actual date employment began in the certification portion of Section 2. The employer should also attach a signed and dated explanation of the corrective action taken.

Even when correcting Forms I-9, an employer may not request specific documents when making corrections. Instead, the employer may specify that the particular document called into question cannot be used to correct the Form I-9. But the employee should be permitted to present his or her choice of other documents, as long as they are acceptable for employment eligibility verification purposes.

E-Verify

If an employer discovers through an internal audit that it had inadvertently failed to create an E‑Verify case for an employee hired after it had enrolled in E‑Verify, the employer should bring itself into compliance immediately by creating a case for the employee. Typically, only employers with federal contracts are able to use the E-Verify system to create cases for existing employees. But based on this new guidance, an employer that inadvertently fails to create an initial E-Verify case for an employee will need to create a new E-Verify case when it later corrects its error. If the employer did not use the E-Verify system as a business practice at the time of the hire, it should not go back and create a case for an employee hired during the time when there was deliberate non-use of E-Verify.

Although not mentioned in the ICE-OSC memorandum, it is wise to complete a signed and dated explanation of the corrective action taken and include that explanation with the employee’s I-9 documentation, whether that documentation is stored in physical or electronic files. In addition, upon completing a late E-Verify query, the employer should insert a brief explanation for its tardiness (e.g., “random audit led to discovery that E-Verify query had not been processed”). By doing so, the employer will have a real-time explanation of the good faith efforts taken to correct inadvertent inaction.

Social Security Number Verification Service (SSNVS)

In light of the ICE-OSC guidance (and prior guidance by OSC in a series of technical assistance letters), employers should not use SSNVS to verify the legitimacy of documentation for immigration purposes. Instead, ICE and OSC clarify that SSNVS is a tool to help employers complete Internal Revenue Service Form W-2 (Wage and Tax Statement). Moreover, when an employer becomes aware of problems with mismatching Social Security numbers, it should not immediately take adverse action against an employee.

If an employer improperly runs its employees through SSNVS for immigration purposes and discovers discrepancies, it will trigger a duty to investigate the discrepancies it has discovered. In this instance, most of the guidance related to timing in the context of problematic Social Security numbers encourages employers to grant affected employees a reasonable time to resolve such scenarios (often 90 days).

“The better part of valour is discretion.” (Henry IV, Part I)

In light of the recent guidance, we note employers have even greater flexibility in internal audits than the formal 10-day notice included in ICE audits. The language of the guidance expressly offers that the 10-day rule “has no bearing on the amount of time an employer may provide its employees to address discrepancies discovered through an internal audit.” In other words, a phased approach may be appropriate, in some circumstances, especially when discrepancies arise in an internal audit (without access to sophisticated databases that government authorities would have in a formal audit or investigation).

Unfortunately, this analysis comes with a caveat. The tension between the interests of ICE (punishing employers for ignoring the possible illegality of workers) and OSC (punishing employers who pursue documentation-related concerns too aggressively) places employers in a precarious position, requiring them to walk a fine line between I-9 compliance and discriminatory conduct. It is for this reason that appropriately planning internal audits is vital to success. Appropriate planning will ensure consistency and transparency protecting against discrimination while also ensuring that appropriate action is taken within a reasonable time when discrepancies are found. 

Conclusion

In light of the concerns about balancing the tensions between ICE and OSC, employers must ensure that they adequately document corrections to Forms I-9 and decisions surrounding the reasonableness of allowing employees to gather new documentation to address discrepancies. While the ICE-OSC memorandum helps clarify common questions employers face when conducting internal audits, it does not—and cannot—resolve the tension between complying with I-9 rules and preventing discrimination. Internal I-9 audits are an important step for employers to minimize risk and ensure compliance with federal law, but those audits should be planned and conducted with great care and a sound understanding of the legal principles at play.