The U.S. Immigration and Customs Enforcement is pressing ahead with its I-9 inspection campaign. Last week, 180 companies in five states got inspection notices from ICE — the first employers to be targeted in 2010.

The most recent targets are in the states of Alabama, Arkansas, Louisiana, Mississippi and Tennessee. ICE had already done some 1,600 inspections in the second half of 2009 and issued fines ranging from $100 to $1,100 per violation. A Notice of Inspection requires employers to allow ICE to inspect their I-9 forms to determine compliance with the law.

ICE released a statement warning that the inspections are “a first step in ICE’s long-term strategy to address and deter illegal employment.”

Companies that receive a Notice of Inspection will have three days to prepare for a meeting with federal officials in which the company’s Form I-9 records will be reviewed, possibly including payroll documentation.

Legal experts recommend that every employer start the year with an six-part legal checkup to ensure compliance with current employment laws.

Here’s the list from the law firm of Moore & Van Allen:

1. Do a quick review of your company’s written vacation policy. Take a look  to ensure that the policy provides proper notice of forfeiture, carryover, and accrual of vacation. Do a checkup to see that you’re in compliance with state laws.  For instance, some special rules apply in states like California regarding forfeiture of accrued vacation.
2. Update your company confidentiality agreement. First, make sure your agreement is tight and covers appropriate employees. A lot of law firms report that laid-off employees are taking revenge — or looking for an edge in finding a new job — by handing out confidential info from former employers. If you don’t have an up-to-date agreement, you leave your company open to such attacks. Second, review your agreements and policies to ensure they don’t prohibit employees from discussing their wages or terms and conditions of employment with their fellow employees. The  National Labor Relations Board views such prohibitions as illegal interference with concerted activity, even if your company is not unionized.
3. Get FMLA compliant. If your company has 50 or more employees, make sure that you post the FMLA poster that the US Department of Labor issued in 2009. Update your FMLA forms and policies, if you have not done so already. (To see if you’re in  compliance with FMLA and other federal posting requirements, use the DOL compliance advisor.
4. Get your managers up to speed on harassment policies. Review the policies with the bosses, and get them to schedule beginning-of-the-year meeting with their departments to review the policies.
5. Get FLSA compliant.  Review the company’s classification of employees as exempt from overtime under federal and state wage and hour laws. Lawsuits and investigations based on improper classifications of employees continue to be a hot area of the law and can result in significant awards against employers.
6. Conduct an internal I-9 audit. U.S. Immigration and Customs Enforcement  announced new I-9 audits for employers. Make sure your bases are covered.

The first round of employer audits for I-9 infractions apparently went so well that Immigration and Customers Enforcement has decided to extend the audit program and reveal the fines for violations.

ICE’s original plan called for 650 employer audits. The agency has completed about half of those and so far has categorized 16% of I-9s as “suspect and fined 61 employers a total of $2.3 million; 267 more employers are still scheduled for audit under the original program. Now, the agency is gearing up to audit 1,000 more employers, according to an agency announcement.

Responding to a Freedom of Information Act request by the American Immigration Lawyers Association, ICE disclosed its factors for assessing fines when it finds I-9 violations. In the past, ICE had calculated fines within the legal limits (up to $1,000 for the first offense and $2,500 for a knowing violation) based on five factors: business size, good faith, seriousness, employment of unauthorized aliens, and history of compliance.

The new ICE factors:

• Knowing hire or continuing to employ vs. paperwork violations
• First, second, or third offense
• Percentage of total reviewed I-9s that have violations
• Other factors such as  business size, good faith, seriousness, unauthorized aliens, and history

Some ICE examples of how employer fines would be set using the factors:

• Employer A with 25% of I-9s containing paperwork violations and no previously fined violations would be fined $440 per violation, which would be adjusted up 5% for being a large employer and down 10% for showing good faith with a good history, for a net of $418 per violation.
• Small Employer B with 5% of I-9s reflecting knowing employment of unauthorized workers (including “constructive knowledge”) might only be fined about $300 per violation.

The feds haven’t finished the first massive I-9 audit, and they’ve already announced a new round — this time targeting 1,000 employers.

Last week, Immigration and Customs Enforcement (ICE) sent notices of inspection (NOIs) to 1,000 businesses, alerting them that feds want to look at their I-9 records.

The agency described the audits as part of its strategy to crack down on employers’ hiring and recordkeeping practices. The increased enforcement started in July with 650 audits. ICE announced at the time that more would be coming soon.

About half of those 650 audits have been completed, and a lot of fines have been dished out so far, with 61 employers paying a total of $2.3 million so far. ICE classified 16% of all inspected I-9s as “suspect,” and 267 employers are still scheduled for audits.

New system for fines

The agency also explained its new system for assessing fines. Penalties used to be based on five factors: business size, good faith, seriousness, employment of unauthorized aliens, and history of compliance. Instead, ICE will now consider:

1. whether the employer knowingly hired illegals or committed a paperwork violation
2. prior offenses
3. the percentage of total reviewed I-9s that have violations, and
4. other factors such as business size, good faith, seriousness, employment of unauthorized aliens, and history.

Employers can be fined up to $1,000 for the first offense, or $2,500 for a knowing violation. For detailed tables showing how ICE calculates the fines, click here.

What HR can do

The best way to avoid fines: Don’t wait for the feds to come knocking. Experts recommend companies conduct their own internal I-9 audit at least once a year.

When an audit does occur, it’s critical for all forms to be properly stored and maintained — when a company gets an NOI, HR is required to turn over all I-9s within three business days. Keep the forms together in a dedicated drawer or binder, and don’t save I-9s for longer than you have to (according to federal law, you need to keep them for three years or one year after the employee’s termination, whichever is longer).

Also keep in mind:

1. Respond quickly to an NOI, even if it’s just to ask ICE for a time extension
2. Notify all employees and managers who handle I-9s
3. Choose one person to correspond with ICE to avoid inconsistency in the information given, and
4. Secure all records — ICE may view missing forms as an attempt to destroy evidence.

The Department of Homeland Security (DHS) announced the so-called ‘no-match’ rules (which told employers what to do if the Social Security number provided by a new hire didn’t match the number in the feds’ database) in 2007. Controversy and legal battles have prevented the rule from ever going into effect.

Now, it’s officially off the books. A regulation was published in the Federal Register on October 7 rescinding the rule.

The DHS announced it will focus on promoting the use of E-Verify as the mechanism for preventing the employment of illegal immigrants.

1. National – Federal contractors doing work for more than 120 days with a value of over $100,000, and subcontractors providing goods and services worth more than $3,000 (read more on these requirements here).
2. Arizona – All employers.
3. Arkansas – State contractors.
4. Colorado – State contractors.
5. Florida – State contractors.
6. Georgia –All public employers, contractors and subcontractors.
7. Idaho – State agencies.
8. Minnesota — All hiring authorities within the executive branch of state government, and employers seeking to enter into a state contract worth more than $50,000.
9. Mississippi — All companies with at least 100 employees. By July 1, 2010, companies with 30-99 employees must comply, and the rest by July 1, 2011.
10. Missouri — All public employers.
11. Nebraska — All state employers and contractors. Also, use of E-Verify is required for private employers who request state tax incentives.
12. North Carolina — All state agencies, offices and universities.
13. Oklahoma — Public employers, contractors and subcontractors.
14. Rhode Island — Executive agencies, and companies doing business with the state, including grantees, contractors, subcontractors and vendors.
15. South Carolina — Employers must use E-Verify, or verify that an employee has a valid S.C. driver’s license or I.D. (or one from a state with similar standards). All companies must comply by January 1, 2010.
16. Utah — Public employers, contractors and subcontractors.

As is always the case when a new form is issued, there’s some confusion over what’s being asked of employers. This time, though, things are relatively simple.

U.S. Citizenship and Immigration Services (USCIS) recently posted the new version on its Web site. The previous form was scheduled to expire in June, before USCIS extended the date to August 31. The new I-9 is good until August 31, 2012.

What’s new? Nothing at all, in fact.

The form is the same as the old one, with the exception of the expiration and revision dates (The new version is dated 08/07/09 at the bottom right corner, compared to 02/02/09 for the old form.)

Better yet: HR is allowed to use either version of the form. However, some experts recommend always using the newest revision — whether it’s required or not — to avoid confusion.

You can the latest Form I-9 from USCIS’s Web site here.

If you want to be sure you’re using the latest version, make sure it’s dated August 7, 2009. The form will expire August 31, 2012.

A few reminders on using the I-9:

• You can use Form I-9 with the revision date of either August 7, 2009, or February 2, 2009, for all new hires or re-verifications. The two are essentially the same.
• Even though there’s a new version, you do not need to complete new forms for existing employees for whom an I-9 has been properly completed.
• All documents presented during the verification process must be unexpired and employers can require only documents specified under the law. In other words, requiring “special” extraordinary documentation from some employees would leave you open to civil and criminal penalties.

The new form and instructions are available at the USCIS Web site.

The federal government’s cracking down on I-9 recordkeeping, with a big nationwide audit underway and more investigations likely to come soon.

Earlier this month, U.S. Immigration and Customs Enforcement (ICE) announced it was checking the I-9 records of more than 650 employers. The effort is part of the agency’s new plan to give employers greater responsibility in the fight against illegal immigration.

ICE described the audits as a “first step,” meaning more rounds of inspections are probably coming. Here’s what HR needs to know:

1. Who’s affected?

First off, who can be audited? The answer: anyone. ICE said the companies in the current investigation were chosen based on leads and other information obtained through investigations. Experts say certain industries, such as construction, manufacturing, hotels and restaurants, are being watched more closely than others.

2. What happens?

ICE starts the process by sending the employer a notice of inspection (NOI) requesting certain documents. In addition to I-9 forms, ICE could request EINs, payroll records and correspondences with the Social Security Administration regarding no-match letters.

Companies have three days to send the documents. They can ask for a time extension in some cases, but response to the NOI still must be quick.

Once a notice arrives, attorneys recommend gathering the documents and conducting a self-audit before submission to correct simple mistakes.

If ICE isn’t satisfied, it may conduct an interview with the employer — though the company has the right to refer the agency to an attorney. Once everything’s reviewed, the company could receive a “Notice of Intent to Fine,” as well as a list of undocumented workers that must be terminated and a list of “suspect documents,” requiring the employer to complete new I-9s.

3. How much can it cost?

In most cases, fines for bad documentation range from $110 to $1,100 per form. ICE can also pursue criminal charges if it thinks the company willfully hired illegal workers.

4. What can HR do now?

The best option for employers, of course, is ensure the documentation is spotless before an audit occurs. Experts recommend conducting an internal audit annually.

Both internal and ICE audits will go more smoothly if unneeded forms are discarded. (The law requires companies to keep I-9s for three years after the employee is hired or one year after termination, whichever is later.) The first step of an audit should to compile a complete list of which forms should still be on file.

To further prove that immigration reform is still on the front burner, Immigration and Customs Enforcement announced its plan to implement a nationwide audit of employer I-9s.

ICE announced that it’s drawing up  Notices of Inspection to review the I-9 records of 652 employers — names not released yet. In some instances, the notices will include subpoenas for records such as

• quarterly wage reports
• EINs
• business licenses
• correspondence from Social Security Administration regarding no-match letters, and
• payroll data.

Employers whose I-9-related records don’t pass muster with ICE will then receive Notices of Intent to Fine.  Also in the announcement, ICE officials said the audit is just a “first step,” so employers probably can expect more audits and inspections.

What happens if you’re contacted for an audit? Make sure you know:

• The name and contact information of company legal counsel. If the company’s legal counsel is not in-house, there should be written instructions for personnel to contact outside counsel immediately.
• Who, in HR or otherwise, will be the the company’s representative for the ICE investigation or audit. You’ll want all communication with ICE channeled through that person to avoid redundancy or contradictions in information.
• The names of company managers who should be informed of an ICE investigation or audit.

And keep in mind:

• An investigator may contact you and ask for an interview, but you have the right to refer the investigator to an attorney.
• An investigator has no right to files and records without a search warrant or subpoena.
• Once you’re informed of an intent to investigate, take special care to secure all related records. Destruction or loss of records after notification could be seen as an attempt to destroy evidence or sabotage the investigation.