Under the Table: Are You Ready for an I-9 Audit?

A little more than a year ago, Broetje Orchards, in eastern Washington, paid a $2.25 million fine after U.S. Immigration and Customs Enforcement (ICE) officials determined, following an inspection of company records, that “nearly 950 of the company’s employees were suspected of not being authorized to work in the United States.” The fine took the form of a lump-sum payment to the ICE, due “within 30 days from the time the government invoices the company.”

Working Legally in the U.S.

This year immigration has emerged, yet again, as a hot topic, primarily because of the presidential election, in which one candidate has proposed to “build a wall” between the U.S. and Mexico, claiming he will force the government of Mexico to pay for that wall.

Be that as it may, don’t expect this complex issue to go away anytime soon. According to the Pew Research Center, there were 11.3 million undocumented immigrants in the U.S. in 2014, almost half (46 percent) of them Mexican, with six states (California, Texas, Florida, New York, New Jersey, and Illinois) accounting for 60 percent of unauthorized immigrants. Many of these people are working or looking for work.

But if you hire someone who is not an American citizen and has no legal papers—that is, a so-called green card permitting foreign nationals to permanently live and work in the U.S.—you will have violated, at the very least, federal law, specifically the 1986 “Immigration and Control Act,” which “toughened criminal sanctions for employers who hired illegal aliens, denied illegal aliens federally funded welfare benefits, and legitimized some aliens through an amnesty program ...” according to Wex Legal Dictionary.

There are also various state laws in place, such as Arizona’s “Support Our Law Enforcement and Safe Neighborhoods Act,” restricting or forbidding the employment of illegal immigrants.

The website LegalMatch.com says you’ve violated the law if you, as an employer, engage with illegal immigrants in the following ways:

• Hiring illegal immigrants
• Recruiting illegal immigrants
• Referring illegal immigrants for work and receiving a fee.

The site notes that “this also includes hiring contractors who use illegal immigrants” and that there are “criminal and civil penalties associated with this conduct.”

Homeland Security’s Immigration and Customs Enforcement (ICE) is responsible for enforcing immigration law. Enforcement activity markedly changed under the Obama administration. As The New York Times pointed out several years ago, “While the administration of George W. Bush focused on headline-making raids that resulted in arrests of immigrant workers, the Obama administration has gone after employers with ICE’s I-9 audits on the theory that employers who hire unauthorized workers create the demand that drives most illegal immigration.”

Form I-9 is the Employment Eligibility and Verification Form. You, as an employer, are required to complete and file that form within the first three days of anyone’s employment. Audit activity is ongoing. ICE fines went from $700,000 in 2008 to $7 million in 2011. And last month the Department of Justice raised the fines for I-9 violations by anywhere from 35 percent to 95 percent to adjust for inflation.

Who’s in Charge Here?

In the roofing industry, many installing subcontractors regularly employ undocumented workers. That’s illegal, and litigation over the course of the last 15 years—including a landmark case involving Wal-Mart, maintenance subcontractors, and an $11 million fine—has determined that if you are the ultimate employer (read: general contractor on the job), the fact that there are people working illegally on your jobsite makes it your problem in the eyes of ICE. You, as the GC, are supposed to have verified that your subcontractor’s employees are properly documented, that is, that the company has filled out and filed I-9 forms for each worker.

A few years ago, the National Roofing Contractors Association sponsored a webinar in which executives from two of its members—Beldon Roofing, in San Antonio, and B&M Roofing of Colorado, in Frederick, Colo.—described ICE audits that their companies had been hit with and discussed how to prepare for such an audit.

That audit consists of ICE officials demanding, with minimal notice (typically three days), “I-9 employment eligibility forms and other documents for inspection.”

Should you lack proper documentation, you could end up having to discharge those employees, as well as pay a fine. According to the Ohio State Bar Association, “a company that ‘knowingly’ uses illegal workers can be fined as much as $16,000 per worker. The employer also can face up to six months in jail if a pattern of violating the law is found. Also, a conviction for ‘harboring’ illegal workers (knowingly employing 10 or more individuals with illegal status in a 12-month period) can lead to imprisonment of up to 10 years.”

How You’ll Know

Form I-9 is readily available online (for a PDF of the form to download, print, and fill out, click here). But of course, you can only record the information that employees give you, and what if they aren’t being truthful? For example, by furnishing false Social Security numbers?

If you want to check the accuracy of information given by employees and recorded on I-9 forms, you can use E-Verify, an Internet-based system that compares the information on an I-9 form “to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility.” (Click here for more information.) E-Verify is “free, fast … and provides results within as little as three to five seconds.” So far, more than 600,000 U.S. employers have used it.