What Triggers an I-9 Audit? Key Factors You Should Know

Verifying proper identity and work authorization documentation for every employee is a crucial HR compliance function - not just for a company’s efficiency, but also for legal compliance. One of the most important tools in this process is the Form I-9 which is used to verify the identity and employment eligibility of employees in the United States.  

In 1986, the Immigration Reform and Control Act (IRCA) was passed, requiring all U.S. employers to have a completed Form I-9 for all employees hired after 11/6/1986. With the current administration placing a renewed focus on immigration enforcement, it’s critical for employers to stay on top of their I-9 compliance. 

Form I-9s can be audited, and the anticipation of an I-9 audit is overwhelming. Let’s dive into what triggers an I-9 audit, common mistakes that can lead to penalties, and how your company can help avoid costly fines and other legal issues.   

What Is Form I-9 and Why Is It Important? 

Form I-9 is the official U.S. Citizenship and Immigration Services (USCIS) document that every employer must complete for each new employee hired onto their payroll as a W-2 employee. This form serves as a mechanism to verify that an employees identify and whether they are authorized to work in the United States. Simply stated, the employee provides their personal information and documentation proving their identity and work eligibility, and the employer reviews and records this information on the now one-page form.  While that all sounds easy, the guidance Handbook produced by USCIS is over 130 pages which is an indication the process is complex.  

Proper compliance with Form I-9 protects the company from: 

• Fines due to violations 

• Damage to your company’s reputation 

• Legal consequences 

That’s why it's important for HR to ensure that all employees' I-9s are complete, accurate, up-to-date, and retained per the required timelines. 

Why Should Employers Be Aware of I-9 Audits? 

An I-9 audit can be initiated at any time. For HR, understanding the triggers for an I-9 audit, what the process involves and subsequently developing a preparedness plan is key. 

Employers should not assume that their company is immune to audits. Whether the company is randomly selected, flagged by a informer, or chosen due to past violations, it’s critical to be proactive about I-9 compliance.  

What Is an I-9 Audit? 

An I-9 audit is a review of an employer’s workforce eligibility via I-9 records to ensure that the company follows federal immigration laws. The audits are usually conducted by Immigration and Customs Enforcement (ICE), the enforcement agency of the Department of Homeland Security (DHS). 

ICE typically issues what’s called a Notice of Inspection (NOI), which is a formal notice that the company will be audited. Once the NOI is received, employers typically have three business days to provide ICE with the requested I-9 forms, employee records, and any other related documents. In the past employers who submitted the forms immediately and waived the three days regretted it as carefully reviewing the documents can be extremely useful.  Companies can request a deadline extension, but they’re rarely granted, so assume you will only have three business days to respond.  It is recommended that employers deliver the requested documents to the ICE agent rather than having the ICE agent return, if possible.  

The audit process is comprehensive. It usually involves multiple steps, including verification of employee documentation, investigation into any discrepancies, and penalties for any violations discovered. Employers who are unfamiliar with the I-9 process may find themselves overwhelmed if an audit occurs, especially if there are gaps or mistakes in their I-9 records, and because of the short timeframe for responding. 

Employers are not required to allow ICE access into their workplace unless they present a warrant. An administrative warrant signed by an ICE agent authorizes ICE to make an arrest but not search the facility and it does not authorize ICE to enter private spaces, but they can enter the lobby and public areas. It is recommended to have signs indicating which areas are for Employees Only to distinguish public vs. Private areas. 

A judicial warrant signed by a judge will specify the area to be searched and indicate the address and scope of the search; whereas an admirative warrant authorizes ICE to make an arrest but not search the facility. Employers should designate a point of contact who can manage the interaction with ICE. 

Common Triggers for an I-9 Audit 

Now that we have covered what an I-9 audit is, let’s review what can trigger an audit as there are a variety of factors that could lead to an I-9 inspection.  

1. Random Selection & Targeted Enforcement: ICE and the DHS occasionally select businesses for I-9 audits as part of a larger scope and strategy to enforce immigration laws. These audits may be completely random, or they could be part of a targeted enforcement in specific industries. See #6 for a list of industries that are at higher risk for an I-9 audit.
2. Tips & Complaints: Employers may find themselves audited due to tips or complaints from current or former employees, or even competitors and other external sources. The bottom line is that if anyone suspects that a company is employing unauthorized workers, they may report it to ICE or DHS.
3. Discrepancies in Employee Documentation: If discrepancies are found between the information provided on an employee’s Form I-9 and records from the Social Security Administration (SSA) or E-Verify, this can trigger an audit. For example, if the name on a worker’s I-9 doesn’t match their SSA record, it could be a red flag for potential I-9 violations. The federal government has access to several sources of data regarding immigration and employment verification and they can identify trends or discrepancies to determine if audits are needed.  
4. Prior Violations or Previous Audits: Companies that have previously been found in violation of I-9 laws are more likely to face additional audits. A history of non-compliance or past errors can increase the likelihood of being audited again.
5. Industry-Specific Focus: Certain industries are subject to heightened scrutiny due to the nature of their workforce. Industries like construction, manufacturing, food processing, hospitality/restaurants, and agriculture and other industries that are critical to infrastructure such as airports and powerplants often receive additional oversight because they employ a large number of temporary, seasonal, or immigrant workers.
6. Media Attention or Legal Issues: Companies in the midst of public controversy or lawsuits related to workplace violations may also attract attention from ICE. Negative media coverage about potential employment law violations can prompt ICE to initiate an I-9 audit. 

Common Compliance Issues

In many cases, audits are triggered by I-9 compliance violations because employers are unaware of their errors. Common mistakes include: 

•  Missing Forms: Even the most diligent of employers can find they have employees who never completed Form I-9 through an administrative oversight. If you discover a missing I-9 form, then you should complete a new form with the employee as soon as possible, documenting the reason for the delay and demonstrating a good-faith effort to comply with the law.
• Mistakes in Section 1: Section 1 of Form I-9 requires the employee to provide their personal information. Mistakes in Section 1—such as incorrect dates, typos, or missing signatures—can lead to significant issues. Even though these types of mistakes are “administrative,” and not intentional, they are still errors and therefore can be considered violations. If Section 1 is not completed on or before the first day of employment, as required, that is also a violation. 
• Errors in Section 2: Section 2 is where the employer reviews the documents provided by the employee and verifies the employee’s identity and work eligibility. Failing to properly complete this section or missing the employer’s signature can trigger an audit and also lead to issues. If Section 2 is not completed within three days of hire, as required, that is also a violation.
• Inaccurate Information in Section 3: Section 3 is used for re-verification or updating an employee’s information. Errors here like failing to update work authorization or missing documentation can also cause compliance issues.
• Lack of Record-Keeping and Documentation: Employers are required to keep I-9 forms for all current employees and maintain them for a specified period which is typically three years after the hire date or one year after the employee’s termination, whichever is later. Inconsistencies in recordkeeping and/or failing to maintain proper records can result in penalties. 
• Improper Document Verification: There are a variety of identity and work authorization documents employees may present when completing Form I-9, which creates challenges if I-9 Agents/Verifiers are not properly trained.  Failure to properly review and verify the authenticity of documents presented by employees can lead to fines and penalties.  

How to Prepare for an I-9 Audit 

It’s clear that I-9 compliance is critical, especially under our current administration, but how can employers ensure they are prepared in case of an audit? The best approach is to stay proactive. Here are some steps you can take: 

• Conduct internal I-9 audits regularly: HR should schedule periodic reviews of I-9 forms to ensure that all records are complete and accurate. 

• Train HR teams on I-9 compliance: Confirm that everyone involved in the hiring process understands how to properly complete and store Form I-9s. 

• Proper document retention and storage: Whether paper or electronic, store your I-9 forms in a secure and accessible location, so you can quickly retrieve them in the event of an audit. 

• Address common errors and missing forms proactively: Don’t wait for an audit to identify and correct mistakes. Be proactive and make sure everything is in order before it’s too late. 

• Stay updated on immigration compliance regulations: Immigration laws evolve, so keep up with changes that could affect I-9 compliance. 

For a comprehensive guide to preparing for an I-9 audit, check out our I-9 audit checklist to ensure you're fully prepared. 

Consequences of Failing an I-9 Audit 

Failing to comply with I-9 requirements can have serious consequences for employers, including: 

Fines and Penalties: I-9 violations can be very costly. Repeat offenses or knowingly hiring unauthorized workers can result in civil and criminal charges, leading to even more significant financial and legal repercussions, along with reputational damage. 

DHS has the following fine schedule:  

• I-9 paperwork violations: $288 to $2,861 per Form I-9 violation.  

• Knowingly employing unauthorized individuals: $716 to $5,724 per employee for the first violation.   

• Second and third violation of knowingly employing unauthorized individuals: $5,724 to $28,619 per employee.   

Civil and Criminal Charges: Damage to Reputation: A company found to be in violation of I-9 regulations may suffer reputational damage, which can affect relationships with customers, employees, and potential business partners.

What I-9 Audits Mean for Your Organization 

Form I-9 compliance should be a top priority for every business regardless of the political landscape. However, with the current emphasis on immigration enforcement, employers can’t afford to overlook the potential risks of I-9 non-compliance. By understanding what triggers an I-9 audit, addressing common compliance issues, and preparing your company in advance, you can avoid unnecessary fines and penalties. 

At OutSolve, we offer expert guidance and resources to help you navigate the complexities of I-9 compliance. Contact us today for assistance or check out our I-9 compliance guide for more information.