Immigration Audits: More Frequent, with Larger Penalties

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I-9 Audits on the Rise

In 1986, Congress passed the Immigration Reform and Control Act which established a process of employee verification including the Form I-9. Last year, the form was revised for the first time and since then, immigration law experts report a sharp increase in audits and fines. Immigration and Customs Enforcement audited 250 companies in 2007; 2013 saw four times that many audits. Given the political stalemate over immigration reform, audit rates are expected to continue to increase.

As with any audit, the key is documentation. Are you retaining the full form, with all supporting documents, in a secure file separate from individual employee personnel files? Have you completed each section in accordance with its deadline? Have you reviewed and updated the forms as needed (changes in visa status etc.)?

An additional service available through U.S. Citizenship and Immigration Services is E-Verify, which checks I-9 information against SSA and Homeland Security records. While it can be cumbersome, the process does provide a second level of protection against employment fraud.

The penalties for violations can be severe. For technical violations, employers can be fined $110 to $1,100 for each incorrectly processed form. For the more serious “Knowing” violation, i.e. hiring or continuing to employee a person known to be ineligible to work in the U.S., the fines range from $375 for a one time first offense to $16,000 for a third offense. Habitual offenders can face jail time. In October 2013, the largest I-9 fine ever was handed out to Infosys Limited. For failure to maintain proper I-9 records, including “widespread failure to update and re-verify” foreign national employees, the Department of Justice reached a $34 million settlement with the Indian technology company.

That sort of record-setting penalty is unique, but that does not mean that smaller companies can be lackadaisical with their record keeping. Annual self-audits by a third party are a good way to ensure that documents are being completed and filed correctly. Brokers, ERISA and immigration attorneys and HR consultants are all resources for these sorts of audits. Deland Gibson has compliance specialists on staff who will review HR procedures and documentation.

For more information, contact Margaret Short, Vice-President of Benefits, at

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