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.

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 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.

Is E-Verify ready for prime time? Definitely not, says a group of lawmakers who believe the system may be less accurate than previously thought.

Use of the  electronic system, designed to allow employers to verify employment eligibility of new hires, is slated to become mandatory Sept. 8 for companies who do business with the federal government.

But there are rumblings in Congress over whether E-Verify’s going to work. Sens. Charles Schumer (D-NY) and John Cornyn (R-TX) recently pointed out what was called a “gaping hole” in the system: It fails to detect identity fraud.

E-Verify simply matches a Social Security number and a name. Schumer, Cornyn and other officials said there aren’t sufficient safeguards against an illegal immigrant using the name, SSN and address of an unwitting U.S. citizen.

Schumer suggested additional measures to enhance employee eligibility verification, including fingerprints.

What’s it all mean? The argument is the latest chapter in the ongoing saga of the Obama administration’s plan to make employers the spearhead of its immigration enforcement program.

You’ll recall that Immigrant and Customs Enforcement (ICE) recently announced plans to audit 650 employers across the country for I-9 compliance, a move that was seen as the first step in heightened enforcement efforts against hiring illegal workers. ICE said it would be seeking to charge violators criminally, a shift from the civil actions the feds have pursued in the past.

About 137,000 employers currently use the E-Verify service, according to federal figures.  More than 6.4 million queries have been received thus far this year. That number would multiply substantially if federal contractors are required to use the system.

Will the Sept. 8 adoption date stand? The deadline’s been postponed several times before. We’ll keep you posted.

ICE is the federal division that investigates companies for immigration worksite violations.

Earlier this week, ICE sent out more than 650 Notice of Inspections (NOIs) to companies across the country. When an employer receives an NOI, it is required to provide ICE with copies of all employees’ I-9 forms and related documentation — usually within three business days.

The audits are only the first step. Even if ICE doesn’t launch a criminal investigation, companies with I-9 violations may still face civil fines.

Here’s what employers who receive NOIs may want to bear in mind:

• Respond to ICE promptly, even if you have to request a time extension
• Maintain copies of all documents sent in response to the NOI
• Avoid any action that may be considered “tampering” with documentation, such as back-dating or correcting I-9 forms, and
• Consider an internal I-9 review process to examine your company’s procedures.

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.

On April 30, DHS announced a major shift in the worksite enforcement program conducted by Immigration and Customs Enforcement (ICE): “Effective immediately, ICE will focus its resources in the worksite enforcement program on the criminal prosecution of employers who knowingly hire illegal workers.”

Translation: The agency is shifting its approach from catching unauthorized workers to catching the people who hire unauthorized workers.

The cold facts:

• ICE officers will obtain indictments, criminal arrest or search warrants, or a commitment from a U.S. Attorney’s Office  to prosecute the targeted employer before arresting employees for civil immigration violations at a worksite.
• ICE will look for evidence of the mistreatment of workers, along with evidence of trafficking, smuggling, harboring, visa fraud, identification document fraud, money laundering, and other such criminal conduct.

Enforcement of immigration law was already a high priority for the federal government in recent years. Last year, 51% of all federal prosecutions were immigration cases. There were 6,000 arrests relating to worksite enforcement, but only 135 were of employers.

All that’s about to change, and ICE has noted that prosecution can extend to owners, managers and supervisors.

What can an honest HR manager and employer do? Just make sure your documentation, such as I-9s, is complete and up to date. And double-check that your hiring practices are in compliance with federal laws.

Here’s the checklist, courtesy of the employment-law firm of Fisher & Phillips:

1. Don’t let employees begin working until the I-9 form is complete. This will reduce the risk of late completion or incomplete forms. It’s also far easier from your perspective if you simply tell the employee to come back the next day with proper documents because you won’t have to create a three-day “call-up” or “tickler” file.
2. Make sure your people performing verification are properly trained. Ensure they get appropriate updates.
3. Conduct periodic self-audits to monitor your own compliance.
4. Keep I-9 forms in a separate file — not in personnel folders.
5. Make photocopies of documents so you have something to work with if you have to add information to the form later.
6. Purge I-9 forms during periodic self-audits. Follow the retention rule: Three years from Date of Hire and one year from Date of Termination. When you meet both tests, throw out the form.
7. Don’t seek advice from ICE or DHS. If you have questions, call an expert.
8. Prepare your staff for informal/surprise inspections. Make sure they know who’s in charge of what.
9. Beware of document abuse discrimination. Don’t ask employees for specific documents or more documents than you need to complete Section 2 of the form properly.
10. Review the I-9 form before an employee leaves your payroll. This may be your last chance to get a signature or other necessary information.

Click here to see the Department of Homeland Security instructions for complying with I-9 regulations.

Here’s what the employment-law experts at the law firm of Frederickson & Byron recommend:

Don’t ignore the letter. If you do, U.S. Immigration and Customs Enforcement ICE could cite the inaction as proof that you knew you employed an unauthorized worker. So, first, check your records to ensure there’s no typographic error in reporting the employee’s SSN.

• If there’s no error:
  1. Share the “no match” letter with each employee listed on the letter.
  2. Advise the employee to check to be sure that the correct name and SSN has been submitted to the SSA.
  3. Don’t require the employee to produce his or her social security card or any other specific documentation; that could be considered document abuse under employment-eligibility-verification laws.
  4. Give the employee a reasonable amount of time to investigate and/or correct any errors.
• If there is an error: In addition to submitting the correct information to the SSA, you should also correct the employee’s Form I-9. As with any employment matter, be sure to treat all employees listed on the “no match” letter similarly without regard to the employee’s national origin, race or citizenship status.
• If an employee admits to a false SSN: You must immediately terminate employment with your company.
• If an employee verifies that the information given is correct: Ask the employee if he or she can provide any other reason for the “no match” letter. If there’s none, report back to the SSA in writing that the company has reverified that the information submitted is correct and that neither you nor the employee can explain the discrepancy. Ask the SSA to contact the company if any additional employer action is required.
• If an employee verifies that the information given is correct but you uncover additional information: You may learn that, for other reasons – such as an admission of illegal residence – that the employee is unauthorized to work in the United States. If so, you terminate employment. Note: Without other evidence, a co-worker tip in and of itself isn’t basis for termination, or even reverification of an I-9.