How to survive an I-9 Audit - Paper Trails

As the business compliance continues to become more complex, many business owners and HR managers find themselves facing certain audits.  One of these challenges is the I-9 audit. In this article, we’ll delve deep into what an I-9 audit entails, how it might be triggered, and the steps you can take to remain compliant.

At Paper Trails, we want to be your go-to resource to ensure that small business owners and HR managers, like you, have the essential information they need to keep their businesses in line with federal and state regulations.

What is an I-9?

Before diving into what an I-9 audit is, let’s define what the I-9 is.  Form I-9, also known as the Employment Eligibility Verification, is a U.S. Citizenship and Immigration Services form. Its’ primary purpose is to verify the identity and employment authorization of individuals hired in the United States.  Every U.S. employer must ensure that each employee, regardless of citizenship or national origin, completes an I-9 form.  You can find more information on the I-9 and its’ requirements here.

What is an I-9 Audit?

An I-9 audit, commonly known as an “I-9 inspection”, is conducted by the U.S. Immigration and Customs Enforcement (ICE). The audit involves reviewing the I-9 forms to ensure that businesses are complying with employment eligibility verification and record-keeping requirements. During an I-9 audit, employers are asked to present their employees’ I-9 forms, and any discrepancies or errors in these forms could result in penalties or fines.

What Would Trigger an Audit?

There are several factors that can trigger an I-9 audit for a business.  Some of these include:

1. Random Selection: Just as with tax audits, businesses can be randomly selected for an I-9 audit.
2. Reports of Unauthorized Workers: Anonymous tips or reports about the employment of unauthorized workers can prompt an investigation.
3. Previous Violations: Companies with a history of employment verification violations or other immigration-related offenses might be revisited.
4. Other Regulatory Agencies: Sometimes, recommendations from other agencies might trigger an audit.

Best Practices to Survive an I-9 Audit

Preparing for an I-9 audit isn’t just about reacting once you receive a notice; it’s about being proactive in your practices. Here are some ways on how your business can stay compliant, in case you are selected for an inspection.

1. Integrate Into Your Onboarding Process: Have managers ensure new hires fill out an I-9 during their onboarding process.
2. Regular Internal Reviews: Conduct periodic internal audits of your I-9 forms to ensure accuracy and completeness.
3. Training: Ensure that those responsible for completing the I-9 forms in your organization are well-trained and updated on any changes.
4. Electronic Verification: Consider using the E-Verify system, an electronic employment verification system, in addition to the manual I-9 process.
5. Maintain Organized Records: Keep all I-9 forms in a separate file, not in employee personnel files. This makes retrieval easier during an audit.  This can be done quickly and easily using employee onboarding software.
6. Timely Updates: Re-verify and update I-9 forms for employees with expiring employment authorization documents.

What Happens If a Business Fails an I-9 Audit?

Sometimes, a business may fail their inspection.  The consequences of failing an I-9 audit can include:

1. Monetary Fines: These can range from minor penalties for paperwork errors to significant fines for knowingly hiring or continuing to employ unauthorized workers.
2. Reputation Damage: Being found in violation can harm the company’s reputation, potentially leading to a loss of business or trust among clients and customers.
3. Bar from Government Contracts: Some businesses may be barred from obtaining government contracts for a specified period.

Conclusion

In conclusion, these inspections, while frightening, are navigable with the right knowledge and preparation. By staying informed, adhering to best practices, and leveraging resources, businesses can confidently meet their compliance obligations.  Feel free to contact our team for more information or with assistance in your I-9 practices.