Form I-9 Inspections by ICE


SCHEDULE A CONSULTATION

The Immigration Reform and Control Act (IRCA), signed into law on November 6, 1986, created the federal employment verification system that requires U.S. employers to confirm both the identity and employment authorization of individuals hired in the United States. IRCA also established civil and criminal penalties for employers who fail to comply with these requirements.

Section 274A(b) of the Immigration and Nationality Act (INA), codified at 8 U.S.C. § 1324a(b), requires employers to verify the identity and employment eligibility of every employee hired after November 6, 1986. The verification process must be documented using the Employment Eligibility Verification Form (Form I-9) as required by 8 C.F.R. § 274a.2.

Employers must retain Form I-9 records for all employees and make them available for inspection by authorized government agencies when requested.

Retention rules are as follows:

  • Current employees: Employers must maintain the original Form I-9 either on paper or electronically, provided the electronic system can generate legible copies for inspection.

  • Former employees: Forms must be retained for at least three (3) years after the date of hire or one (1) year after employment ends, whichever is later.

Failure to properly complete or retain Forms I-9 may expose employers to significant civil penalties.

I-9 Inspection Process

Notice of Inspection (NOI)

Government audits of employer Form I-9 records typically begin when U.S. Immigration and Customs Enforcement (ICE), through Homeland Security Investigations (HSI), serves a Notice of Inspection (NOI) on the employer.

Under 8 C.F.R. § 274a.2(b)(2)(ii), employers are generally given at least three (3) business days to produce the requested Forms I-9.

In addition to Forms I-9, HSI frequently requests supporting documentation such as:

  • Payroll records

  • A list of current and former employees

  • Articles of incorporation

  • Business licenses

  • Other corporate records

Once the documents are submitted, HSI agents review the Forms I-9 to determine whether the employer has complied with federal employment verification requirements.

Technical vs. Substantive Violations

If ICE identifies technical or procedural errors, the employer will typically receive at least ten (10) business days to correct the issues, as required under INA § 274A(b)(6)(B) (8 U.S.C. § 1324a(b)(6)(B)).

However, substantive violations or technical violations that are not corrected within the permitted period may result in financial penalties.

Possible Outcomes of an I-9 Audit

After reviewing the employer’s records, ICE will issue written findings. The agency may issue one of several types of notices depending on the results of the inspection.

Notice of Inspection Results (Compliance Letter)

A Compliance Letter indicates that ICE found the employer to be in compliance with applicable employment verification requirements.

Notice of Suspect Documents

This notice informs the employer that ICE believes certain employee documents submitted with the Form I-9 are not valid or do not belong to the employee and generally provides the employer with ten (10) business days to make corrective actions.

Employers receiving this notice must notify the affected employee and provide them with an opportunity to present valid documentation demonstrating employment authorization. If the employee is able to provide alternate documents, then the notice typically directs the employer to provide copies of these documents for their review. Employees who are unable to provide alternate documents should be terminated.

It’s important that the foregoing is handled carefully and on a timely basis, with a full update and report provided to the ICE HSI Auditor within the 10 business days.

Continuing to employ an unauthorized worker after receiving such notice may expose the employer to civil or criminal liability. The likelihood of a worksite enforcement raid may significantly increase following the Notice of Suspect documents, so white collar criminal defense counsel may be strongly recommended as well to prudently prepare for this increased potential.

Notice of Discrepancies

A Notice of Discrepancies indicates that ICE was unable to determine the employee’s work authorization based on the documentation reviewed.

The employer must provide the notice to the affected employee and allow the individual an opportunity to present additional documentation establishing employment eligibility, typically with a ten (10) business day deadline.

Notice of Technical or Procedural Failures

This notice identifies errors such as incomplete fields or clerical mistakes on the Form I-9. Employers typically have ten (10) business days to correct the issues.

If the errors are not corrected within the allowed period, they may be treated as substantive violations.

Warning Notice

ICE may issue a Warning Notice when violations are identified but the agency believes the employer is likely to comply moving forward. An experienced Form I-9 and Employer Compliance attorney can assist with negotiations at the auditor level to maximize the potential for a warning in lieu of a fine, such as volunteering to enroll in E-Verify or demonstrating good faith efforts to comply.

However, a Warning Notice is generally not issued if:

  • The employer previously received a Warning Notice or Notice of Intent to Fine

  • The employer failed to correct technical violations after notice

  • The employer failed to complete Forms I-9

  • Unauthorized workers were hired due to substantive violations

  • Evidence of fraud exists (such as backdating forms)

Employers receiving a Warning Notice may be subject to a follow-up audit within six (6) months or later. ICE uses a calculation which includes higher fines for repeat offenders.

Notice of Intent to Fine (NIF)

ICE may issue a Notice of Intent to Fine when it believes the employer committed violations such as:

  • Substantive Form I-9 violations

  • Uncorrected technical violations

  • Knowingly hiring unauthorized workers

  • Continuing to employ unauthorized workers

Section 274A Administrative Proceedings

A Notice of Intent to Fine (NIF) outlines the alleged violations and the proposed civil penalties.

Employers have the right to contest the charges by requesting a hearing before an Administrative Law Judge with the Office of the Chief Administrative Hearing Officer (OCAHO) within the Executive Office for Immigration Review (EOIR).

This request must be submitted within 30 calendar days of receiving the NIF, pursuant to 5 U.S.C. §§ 554-557.

If no hearing request is filed within the deadline, ICE may issue a Final Order, which cannot be appealed.

When a hearing is requested, employers may also engage in settlement negotiations with ICE before the matter proceeds to OCAHO.

Form I-9 Substantive Paperwork Violations

Substantive violations occur when required information on Form I-9 is missing or incorrectly completed.

Examples include failing to ensure that employees properly complete Section 1, including:

  • Providing their full legal name and date of birth

  • Selecting the correct immigration status attestation

  • Providing required registration numbers when applicable

  • Signing and dating Section 1

Employers may also commit violations in Section 2 if they fail to:

  • Examine acceptable identity and work authorization documents within three business days of hire

  • Record document details such as issuing authority, document numbers, and expiration dates

  • Sign and date the certification section

  • Record the employee’s date of hire

  • Provide the employer representative’s name and title

Additional compliance obligations apply to:

  • Supplement A (Preparer and/or Translator Certification)

  • Supplement B (Reverification and Rehire)

Failure to properly complete these sections as applicable may also result in substantive violations. A common mistake is utilizing the Spanish version of the Form I-9, which is only appropriate for employees in Puerto Rico, whereas a Translator should be utilized for the English version for all other employees. Additionally, it’s important to complete the revivification section for expiring work authorization (ex. Work Authorization Documents or Form I-94 Arrival/Departure Records granting temporary work authorization) or in the case of a rehire, although a new Form I-9 may also be used for rehires and may be recommended depending on any errors in the original Form I-9.

Technical or Procedural Form I-9 Violations

Certain mistakes are considered technical or procedural errors, which may be corrected if identified during an inspection.

Examples include:

Section 1 Technical Issues

  • Using an outdated version or improperly using the Spanish version of Form I-9

  • Missing “other last names used”

  • Missing physical address information

A missing email address or phone number does not constitute a violation.

Section 2 Technical Issues

  • Missing employee name at the top of the page

  • Missing employer business information or title of the employer representative

Supplement A or B Technical Issues

  • Missing employee name at the top of the supplement

  • Failure to record a new name when applicable

If these issues are corrected within the allowed period, they generally will not result in penalties.

Determining Civil Penalty Amounts

Civil monetary penalties for Form I-9 violations are adjusted periodically for inflation under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

Because penalty amounts change annually, employers should consult the Federal Register for the most current penalty ranges.

Penalty calculations typically involve:

  1. Determining the number of violations relative to the total number of Forms I-9 reviewed

  2. Calculating the employer’s violation percentage

  3. Applying the appropriate minimum and maximum penalty range

ICE also evaluates five statutory factors when determining the final penalty amount:

  • Size of the business

  • Employer good faith

  • Seriousness of the violations

  • Involvement of unauthorized workers

  • History of prior violations

These factors may increase or decrease the base fine amount. ICE may also consider any proactive measures such as enrollment in E-Verify as good faith conduct.

Document Fraud Under Immigration and Nationality Act § 274C

Section 274C of the Immigration and Nationality Act, codified at 8 U.S.C. § 1324(c), addresses immigration-related document fraud.

This provision authorizes HSI to pursue administrative penalties against individuals or entities that knowingly commit document fraud in connection with immigration benefits.

Possible penalties include:

  • Civil fines

  • Cease-and-desist orders

  • Administrative proceedings before OCAHO

If a Notice of Intent to Fine is issued under § 274C, the recipient has 60 days to request a hearing before an OCAHO Administrative Law Judge.

Individuals found to have violated § 274C may also face immigration consequences, including removal from the United States and a permanent bar to reentry.

Activities Prohibited Under INA § 274C

The statute makes it unlawful for any person or entity to knowingly:

  • Forge or counterfeit immigration documents

  • Use or attempt to use fraudulent documents for immigration benefits

  • Use documents issued to another person to satisfy immigration requirements

  • Provide fraudulent documents to an employer or government agency

  • Assist in filing immigration applications known to contain false information

Civil penalties under INA §§ 274A and 274C are established by statute and subject to periodic inflation adjustments.

The above is informational and not intended to be legal advice. Please consult with an experienced Form I-9 and Employer Compliance attorney on your specific facts and circumstances before proceeding with any U.S. immigration strategy.