Business Immigration Insights

Without fanfare or formal announcement, U.S. Immigration and Customs Enforcement recently implemented a policy shift that will materially increase fine amounts that U.S. employers potentially face during I-9 audits.

For decades, U.S. employers relied on the distinction between technical (also called procedural) and substantive I-9 violations set out in a 90s-era policy memorandum from the former Immigration and Naturalization Service and on lenience granted under the Good Faith Compliance Provision of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.  Subsequently, in memos of 2008, 2009 and 2013, ICE reaffirmed that employers act in good faith – and are therefore exempt from fines – if they correct relatively minor I-9 mistakes within 10 days of being notified in a government audit.

ICE has now reclassified almost all of those errors as substantive, thereby removing Good Faith Compliance protections.  Effective immediately, the following violations will be calculated toward fines whether employers subsequently correct them or not:

1. Section 1 (completed by Employee)
   • Missing date of birth
   • Failure to date form
2. Section 2 (completed by Employer)
   • Missing date of hire
   • Missing employer or representative title
   • Failure to date certification
   • Missing document information (despite retaining legible copies of documents)
   • Failure to check “alternative procedure” box
   • Failing to ensure active E-Verify participation at the time the alternative procedure was used
3. Supplement A (completed by Preparer and/or Translator)
   • Missing name
   • Missing address
   • Missing signature
   • Missing date
4. Supplement B (completed by Employer)
   • Missing date of rehire
   • Failure to check “alternative procedure” box
   • Failing to ensure active E-Verify participation at the time the alternative procedure was used
5. Spanish-language Form I-9 used outside of Puerto Rico
6. Electronic I-9 systems that do not meet federal standards

These are not trivial changes.  I-9 fines now range from $288 to $2,861 per form for first offenses.  Since ICE calculates a base fine by dividing the number of substantive violations and uncorrected technical failures by the total number of forms, this “violation percentage” will necessarily rise markedly now that so few procedural violations can be corrected and discounted.

Large-scale private audits typically reveal at least one error in the vast majority of I-9s (9 out of 10), with paper forms having an error rate of 95 percent and electronic forms not far behind, at 75 percent.  Immigration attorneys who assist their clients with I-9 audits routinely find several errors per form.  With this level of deficiency and the 10-day grace period now gone, even small to mid-size U.S. employers are facing steeply increased fines in any audit.

Employers need to watch that employees, preparers, translators and electronic systems complete all I-9 sections thoroughly and accurately.  Employers must carefully review and immediately return forms that are unsigned, undated or have blank fields to be updated.  Critically, employers cannot overly rely on electronic systems, which often populate, correct and delete fields inappropriately.  Under the new rules, these machine errors are the employer’s errors and are substantive and fineable.

Employers must be equally careful with Section 2 and Supplement B.  Representatives should record document information (titles, numbers, dates, etc.) completely in Section 2, as employers can no longer avoid fines by subsequently filling in blank fields with information from supporting documents retained with the I-9.  Such actions are now substantive violations – although proactive corrections may still be viewed as a positive factor in adjusting the base fine downward.

With so many errors reclassified as substantive, relatively few still qualify as technical.  The employer may still correct an old I-9 version, a business name/address field left blank in Section 2, and an employee name or new name field left blank on Supplements A and B.  An employee may correct an “other last name” or physical address left blank in Section 1 or a Social Security number recorded incorrectly (but only for an E-Verify employer).

Employers would be wise to reduce exposure by auditing their existing I-9s, evaluating electronic systems, identifying error trends, and training staff on the new rules.