U.S. Immigrations and Customs Enforcement (ICE) is a government agency tasked with ensuring employees are legally allowed to work in the U.S., among other responsibilities. To confirm an employee’s work eligibility, employers must remain I-9 compliant. To stay in compliance, businesses can conduct internal I-9 audits to ensure all employees are legally allowed to work in the U.S. This guide will cover how to do an I-9 audit with our I-9 checklist.
What Is an I-9 Audit?
In 1986, Congress passed the Immigration Reform and Control Act (IRCA), which requires all employers to complete I-9 forms for all new employees. I-9 forms are used to verify new hires’ identity and employment authorization for employment in the United States. An I-9 audit is a process used to verify the employment eligibility of new staff and helps businesses remain compliant. Conducting an I-9 audit is a practice that employers can make to help avoid audits by the IRS. In addition, through self-audits, companies can create a paper trail of documentation that can help them avoid fines and penalties that come with IRS audits.
How to Conduct an I-9 Audit
Conducting I-9 audits is a great practice to have in place, as it allows you to fix errors and find any missing documentation or information related to I-9 forms. Below are steps on how to do an I-9 audit that can help your organization stay compliant.
Step 1: Create a List of Current and Previous Employees Since Nov. 6, 1986
The first step in conducting an I-9 audit is creating a list of current and previous employees since Nov. 6, 1986. The Immigration Reform and Control Act was signed into law on Nov. 6, 1986, making this the effective date when employers were required to verify the identity and work authorization of all their employees. Therefore, to prepare for an I-9 audit, you should list all current and previous employees hired since this date and mark whether they’ve completed an I-9 form.
Step 2: Collect All I-9 Forms
The next step is collecting all I-9 forms from your employees, including current employees, employees hired since Nov. 6, 1986, and employees terminated within the last three years, which is the statute of limitations for holding onto an employee’s I-9 form.
Depending on the size of your organization, you might have I-9 forms in various locations, such as your company’s headquarters and regional offices or stored electronically online. A central database that houses all employee I-9 forms is a great way to ensure all documents are accounted for. In addition, in today’s digital world, it’s often recommended that you electronically upload all I-9 forms to improve access and security.
Additionally, you might need to collect I-9 forms from missing employees. If this is the case, it’s essential to reach out to all employees and explain why they need to submit their I-9 forms and the process for doing so.
Step 3: Audit I-9 Forms
After collecting all I-9 forms, the next step is conducting your I-9 audit. I-9 forms have three sections, meaning there are three areas you need to audit. Each section will require different information, such as an employee’s name, address, date of birth, Social Security number and information certifying their identity and work authorization status. In our I-9 audit checklist, you can find the information you need to verify when conducting an I-9 audit.
Step 4: Correct Any Errors
After going through each section of each employee’s I-9 form, the next step is making any necessary changes. When fixing mistakes, it’s essential to note of what was changed, whether with an electronic note if the I-9 was uploaded online or with a sticky note or something similar. It’s important to never write on an employee’s I-9 form.
The errors you correct will become part of your I-9 audit log, documenting the good faith taken to remedy any issues to remain compliant. Employers can reference the USCIS Handbook for Employersto learn how to document and make each change. It’s recommended to initial and date each correction made on an I-9 form.
Step 5: Complete the I-9 Audit
After correcting any errors found on your employees’ I-9 forms, it’s time to complete your I-9 audit. To wrap up, organize all I-9 forms and make documentation that outlines your I-9 audit procedure that HR staff can follow in the future. It’s also vital to keep I-9 audit logs and communication made with any employees to have documentation in place should the IRS conduct its own I-9 audit for your company.
I-9 Audit Checklist
I-9 forms are broken into three sections. Use our I-9 audit checklist to see what information you should verify in each section:
Section 1
- Name, aliases, addresses and date of birth
- Social Security number
- Email address and phone number (optional)
- Immigration status and signed date
- Translator or preparer information, if applicable
- Must be completed on or before the 1st day of work for pay
Section 2
- Corresponding documents should be accurate, such as List A being under List A and not List B or List C
- All required information for each document
- Documentation for proof of identity and work eligibility in the U.S.
- Date the employee started work
- Business name and address
- Signatures from the company’s representative examining the employee’s documents
- Must be completed on or before the 3rd day of work for pay, after the first day (following a Monday – Thursday rule.)
Section 3
- This section is only completed if the employee’s work authorization has expired, if they were rehired within three years from when they previously completed their I-9 form or if their name changed
Common I-9 Audit Mistakes
The I-9 process can be time-consuming and confusing, which means there is room for errors to arise. Before conducting an I-9 audit, it’s important to know about common I-9 audit mistakes to know what to look out for when conducting your audit. Some of the top I-9 mistakes include:
- Failing to finish the form within three business days
- Failing to confirm the employment eligibility of workers with temporary citizenship status
- Accepting false identification
- Improperly maintaining I-9 forms of current workers
- Missing dates or signatures
- Allowing untrained staff to administer I-9s
- Failing to conduct an internal I-9 audit
- Failing to make copies of the I-9 form
- Making corrections without initialing and dating
A best practice for employers is to include good faith markers to serve as factors for mitigation or possible elimination of smaller fines. Three ways to illustrate an employer is a good faith operator include:
- Creation of an SOP manual for the employer’s I-9 processes. This can be a great tool to ensure consistency and purpose and can be presented to an auditor to provide insight into the employer’s processes.
- An annual self-audit of I-9 forms and processes. This doesn’t necessarily need to be a full audit every year, but a spot audit to identify training issues could also be helpful. Corrections need to be made as applicable.
- Annual training for I-9 completers/administrators. Long time completers may object, but even in years when no official changes come to the form or processes, ICE enforcement positions may still be altered. Employers should note what was covered, the date of training, and attendees.
These are some of the many I-9 audit mistakes you can make. To improve I-9 compliance, work with Experian Employer Services. Our I-9 administration services help you streamline your I-9 process by automating manual procedures to improve efficiency, accuracy and compliance.
I-9 Frequently Asked Questions
What is needed for an I-9 audit?
As you prepare your I-9 audit checklist for an internal or external audit, ensuring you’re adequately prepared by having the proper documents and systems in place is important. Below are some of the general documents, information and other items that can help ensure a successful I-9 audit:
- Current employee information: On any I-9 checklist, it’s important to have a list of all the workers hired as of Nov. 6, 1986. For each of these workers, ensure you have the following information on file:
- Names, addresses and dates of birth
- Identification documents, such as valid passports or driver’s licenses
- Employment start dates
- Employment authorization documents, such as work permits, green cards, etc.
- Social security, alien registration or USCIS numbers
- Employee signature
- Employer signature
- Terminated employee information: In addition to maintaining records for current employees, it’s essential to have a list of workers terminated throughout the previous three years. In addition to the information needed for current workers, ensure documentation on employment end dates is kept recorded.
- I-9 Forms: For any I-9 audit, it’s essential to have all I-9 forms, whether original or electronic, for current and terminated employees that meet the existing retention criteria.
Once this information on your I-9 audit checklist is gathered, you can run an internal I-9 audit to cross reference available I-9 forms with current employee information to ensure all I-9 forms contain accurate information.
How often do companies get I-9 audits?
There’s no set number of times companies receive an external I-9 audit from Immigration and Customs Enforcement (ICE) or Homeland Security Investigations (HSI). However, certain triggers can lead to an I-9 audit, such as a complaint from a current or previous employee, a complaint from a job candidate denied employment, data collected by ICE or HSI, complaints from competitors or information from other governmental agencies.
An I-9 checklist can help ensure you’re prepared for an external I-9 audit. Conducting an internal I-9 audit biannually can help you make sure your I-9 documentation is accurate and compliant, allowing you to avoid potential penalties and fines.
Is it mandatory to get an I-9 verification?
Yes, it is required by law for all U.S. employers to complete Form I-9 for each employee hired onto their payroll, as established by the Immigration Reform and Control Act of 1986 (IRCA). This form is required for citizens and noncitizens authorized to work in the United States. Failing to complete Form I-9 can result in a wide range of penalties and fines, ranging from a few hundred dollars to several thousands of dollars, and even imprisonment. Having an I-9 audit checklist and conducting periodic internal I-9 audits throughout the year can help ensure compliance and spot and correct errors.
How long does it take for I-9 to process?
When it comes to completing and filling out I-9 forms for newly hired employees, you have three business days to ensure Form I-9 is accurately completed from the start of the new employee’s date of hire. The first section of Form I-9 should be processed on the new employee’s hire date, while the second section should be completely filled out within three business days of their hire date. During this time, employers can physically inspect the documentation provided by the respective employee to ensure its validity.
What happens if you fail an I-9 audit?
Form I-9 is an essential document all employers are required to fill out and have on file to ensure the staff on their payroll are authorized to work in the United States. Failing an I-9 audit can lead to serious consequences, ranging from fines to more severe penalties like suspending business operations or imprisonment. The nature of I-9 penalties and fines varies depending on factors like the type of error and the intent behind the error, such as whether it was an honest mistake or carefully planned and intentional. Below are some of the potential consequences for I-9 compliance violations:
- Fines: Fines for I-9 noncompliance can range from $272 to $2,701 per violation, with the fine increasing with each repeated violation. If it is found that an employer knowingly hired or continued to employ an employee who was unauthorized to work, the penalties can range from $676 to $27,018 per worker.
- Criminal penalties: Employers who willingly and repeatedly hire unauthorized workers can also face criminal penalties, such as imprisonment.
The severity of fines and criminal penalties depends on factors like business size, good-faith effort to remedy errors, the seriousness of the violation, whether unauthorized workers were involved and the history of previous I-9 violations.
Does I-9 include background check?
No, an I-9 does not include a background check. However, many employers use verification fulfillment services when hiring new employees to verify a candidate’s employment history, income, criminal history, education and other relevant information needed to make an informed and confident hiring decision.
Can someone work without an I-9?
No, an employee cannot work without accurately having a Form I-9 on record. All employees must have an I-9 form completed within three days of hire, and ensuring this is crucial when it comes to avoiding penalties and fines. It is important to note that employers can hire independent contractors without completing an I-9 form. For example, if you hire a construction company and its employees to remodel your office, you do not need an I-9 form on record for the workers hired to complete the renovations.
Is it illegal to not fill out an I-9?
Yes, it is required by law to fill out an I-9 within three business days when a new employee is hired. Failing to fill out and accurately complete an I-9 form for a newly hired employee can result in penalties and fines that can not only dig into your bottom line but damage your reputation and overall employee and customer satisfaction. Having an I-9 audit checklist in place and conducting an internal I-9 audit once or twice a year can help ensure all employees on the payroll and terminated employees within the past three years have accurate I-9 forms on file.
How do I report an I-9 violation?
If you’re an employer and need to report an I-9 violation, the following contacts can be used:
- Phone: 888-897-7781
- TTY: 877-875-6028
- Email: E-Verify@uscis.dhs.gov
If you’re an employee or job candidate and believe an employer violated I-9 regulations, the following contacts can be used:
- Phone: 800-255-7688
- TTY: 800-237-2515
- Email: ier@usdoj.gov
- Website: http://www.justice.gov/ier
