INS Guidelines for Conducting a Private I-9 Audit

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Published: Friday, 01 February 2013 12:54

First, review and evaluate the present IRCA compliance procedures. Section 1 should be completed at the time an employee is hired- Employers may be held liable for an employee's failure to complete Section 1. The employee has three business days from the date of her or his hiring to provide the employer with the documentation of identity and work authorization needed to complete Section 2 of the I-9 form ("three business days" requires an employer to count weekends and holidays as business days if the employer is open for business on those days). If, within that time, the employee produces a receipt showing that he or she has applied for a work authorization or identification document, the employee must be given 90 days to produce the required documentation. The employer must complete Section 2 of the I-9 form within three business days of the date an employee is hired. Employees must not be required to produce specific documents. The employer must accept the documents enumerated in the Form I-9 "Lists of Acceptable Documents" in any of the combinations indicated on the form.

I-9s must be retained for the duration of an employee's employment, plus one year, or for a minimum of three years from the date of hire, whichever is longer. Employers must keep a record of employees whose work authorizations will expire and reverify the authorization to work of such employees prior to expiration.

It is desirable to review every I-9 form the employer has prepared. To accomplish this is goal, INS recommends that the party conducting the audit start by identifying every employee hired (or rehired) after November 6, 1986, using payroll records or other records. Next, create two master lists of: (i) all active employees, with their dates of hire noted; and (ii) all terminated employees for whom an I-9 form is required, with dates of hire and termination noted. Create an "I-9 audit tracking form" for every listed employee, filling in each employee's name, date of hire, and date of termination (if applicable).

With larger employers, it may not be practical to inspect every I-9 form. A review of a random sample may be sufficient to reveal common errors, which can be corrected when discovered and prevented in the future. To perform a random sample audit, choose employees from personnel records in some random manner (for example, select all employees whose social security numbers end in an even number, or all employees born in May). Be sure to select a representative sample, that is, a sample that includes I-9 forms prepared at different times, by different managers, and, where appropriate, at different facilities. Create an I-9 audit tracking form for each randomly selected employee, filling in the name, date of hire, and date of termination, if applicable, for each selected employee. Gather I-9 Forms, Match Each I-9 Form to its Corresponding I-9 Audit Tracking Form, and Reconcile Any Differences. If there is an audit tracking form without a matching I-9 form, conduct another search for the I-9 form. If the form cannot be located, have the employee and employer complete a I-9 form. Do not back date the form. If the audit being conducted is of all of the employer's I-9 forms, rather than only of a random sample, and I-9 forms without corresponding audit tracking forms are located, determine why these discrepancies exist. Identify the employees for whom the employer has incomplete records and find out why they are not listed in the company's payroll records. Reconcile all inconsistencies.

The appropriate action for employers to take concerning Forms I-9 that are lost, destroyed, or not maintained as required by the retention requirements of the INA is to come into compliance with the law as quickly as possible. However, past violations of this nature cannot be retroactively corrected.

Missing information should be conspicuously inserted, initialed, and dated contemporaneously with its insertion. The employee should provide any missing information in Section 1 of the Form I-9; the employer should complete Sections 2 and 3 of the form. In cases where it is necessary to go back to the employee for additional information, be sure that the employer makes a special effort to avoid anti-discrimination violations. The employer should not require more documentation than is necessary to meet IRCA's requirements. The employer should allow the employee to present any document or combination of documents sufficient to satisfy the requirements of IRCA.

Omissions and mistakes discovered on a completed I-9 Form cannot be retroactively corrected. However, further violations may be prevented by taking corrective action as soon as the omissions or mistakes are discovered, since employers have an ongoing obligation to comply with the law. Incorrect information should be corrected, and the correction should be initialed and dated. If the employee remains employed by the employer, there is no paperwork error that cannot be corrected -- other than the failure to complete the form within three days of the date of hire. If the employee has been terminated, however, it may be impossible to correct errors or omissions in I-9 forms that have been uncovered in an audit.

As an alternative to the suggestions made in the preceding paragraphs that an employer insert and/or correct information on I-9 forms that a private audit has found do not comply with the requirements of IRCA, the employer may generate new I-9 forms. Such new forms will not comply with IRCA's three-day post-hire completion requirement. If done correctly, however, generating such new forms will negate all other violations and enhance a good faith defense. If this alternative is chosen, the employer must retain the original I-9 form.

For small employers, INS recommends a "binder system" for maintaining I-9 forms. In the binder system, the employer keeps two large three-ring binders, one for current employee I-9 forms and one for terminated employee I-9 forms. Organize the employer's I-9 forms alphabetically by employee within the binders. When a new employee is hired, her or his I-9 form is to be placed in the current employee binder. At the time an employee is terminated, her or his I-9 form is transferred to the terminated employee binder, and the date of termination is noted in the margin of the I-9 form. Periodically review the terminated employee binder to determine which I-9 forms may be discarded and which must be retained pursuant to the requirements of 8 CFR § 274a.2 (b)(2)(i)(A).

For larger employers, consider microfiche storage of I-9 forms, which is permitted under 8 CFR § 274a.2(b)(2)(ii). Although the regulations do not expressly permit computer storage of I-9 forms, some employers have implemented a computer imaging system that allows storage of a picture of the I-9 form in a computer database. Where employers wish to implement such a system, it is prudent to maintain the original I-9 forms in storage, in the event that the INS refuses to accept computer images of I-9 forms.

When keeping track of employees with limited-duration work authorization for purposes of reverification has proved difficult, INS recommends the establishment of a "tickler" system. Depending on the size and sophistication level of the employer, such a system may be as simple as a desk calendar on which handwritten reminders are entered concerning the need to reverify an employee's eligibility to work, or as complex as a computerized tickler system that prints out daily, weekly and/or monthly reminders of the need to reverify work eligibility of specific employees.

Although copying documents is not required -- and does not relieve the employer of the obligation to complete the I-9 form -- such a practice is advisable. If such a copy is made, it must be retained with the I-9 form. In most cases, copies of documents will assist an employer and its counsel in preparing for an INS audit and in defending against claims that appropriate documentation was not demanded or presented. Furthermore, maintaining copies of documents will aid an employer in defending against assertions that it accepted fraudulent documents that it should have known were not genuine.

Finally, maintaining photocopies of documentation that the employer has examined in the course of completing I-9 forms makes it easier for the employer to conduct the periodic audits of its IRCA compliance effort. The OCAHO has found photocopying documents and attaching those copies to the I-9 form to be a mitigating factor in the imposition of a fine.

Practice indicates that the I-9 forms should be kept separate from employee personnel files to avoid charges of discrimination based on the information contained on the forms concerning an employee's age and national origin. In addition, keeping I-9 forms separate from personnel files facilitates their production at the time of an INS audit. It also eliminates the necessity of separating the I-9 forms from the personnel files at the time of an INS audit or producing personnel files for the INS that may contain sensitive or business information to which the INS would not otherwise be privy. Evaluate and Meet Employer's Education and Training Requirements.

Latour and Lleras can assist your company in protecting itself a confidential, internal I-9 audit.