Auto Laundry News - August 2013

ICE Inspection — What to Expect: From NOI to NIF

By Jacob M. Monty

I. INTRODUCTION TO FORM I-9

In this article we will discuss a piece of paper that you might not think twice about, but it has the potential to land you in prison if ignored or not properly completed. The Form I-9 is used to verify identity and work authorization for each of your employees. The Department of Homeland Security (DHS) may investigate you and ask to see your I-9s among other documents after a Notice of Inspection (NOI) is issued. Worksite enforcement and immigration related employment fines continue to be at the forefront of U.S. Immigration and Customs Enforcement (ICE) priorities.

Maintaining a compliant I-9 program continues to be imperative. Fiscal year 2012 saw a record breaking 3,004 I-9 audits. One example in particular depicts the seriousness of the penalties associated with this form. Following a seven-month investigation by ICE, the owner and manager of a San Diego-area car wash pleaded guilty to knowingly hiring 10 undocumented workers. The defendants face up to five years in prison and a fine of up to $250,000. The company has already agreed to forfeit over $85,000 from the proceeds gained from the company’s illegal hiring practices. This article is an overview of the NOI
process and is intended to be used only to assist you in the preparation of a response.

II. EXAMINE THE NOI CONTENTS

The NOI will contain the name of the business, date and time of inspection, and three-day waiver. The basic NOI requests Form I-9s (I-9s) for current employees. You could also be asked to provide:

  • I-9s for terminated employees for up to three years
  • A list of current and terminated employees with hire and termination dates
  • Wage and hour reports
  • Tax statements
  • Employer and Taxpayer Identification Numbers, Articles of Incorporation, business licenses
  • Your social security number and address
  • Social security mismatch or no-match letters

The NOI will generally be served in person, but can also be served by certified mail, return receipt requested. ICE may require the employer to produce the original I-9s at the ICE office.

You will receive a three-day notice informing you of the government’s intention to conduct an inspection of records. It is imperative that you not waive the three-day notice requirement as your auditor may review the records before the three-day notice period has lapsed based on the employer’s consent. The use of the three-day notice period is essential to properly responding to an NOI as it allows the employer to retain counsel, correct I-9 failures, and gather records, which in turn results in a reduction of an employer’s potential fine. Upon receiving the NOI, the employer should immediately retain counsel in order to conduct an audit of its I-9s before submitting them to the government.

III. AUDITING THE I-9

In order to correct Section 1, you must have the employee, preparer, or translator correct the failure, and initial and date the correction in red ink.

In order to correct Sections 2 or 3, the employer must make the correction, and initial and date. The following situations may prevent you from correcting failures during the 10-day correction period:

  • You no longer employ the employee
  • The employee is on leave of absence or vacation
  • The preparer of the I-9 cannot be located
  • Employee failed to date at the time of hire
  • You failed to date within three days after the employee’s date of hire.

IV. COMPLIANCE LETTER

If your business is found to be in compliance, a Notice of Inspection Results (compliance letter) will be issued. A compliance letter is issued when an employer is found to have no “knowingly hiring,” “continuing to employ,” substantive, or technical violations, and no unauthorized aliens. This letter states the employer is in compliance and no further investigation is required.

V. WARNING NOTICE

If paperwork violations are discovered but the errors do not warrant a penalty, a Warning Notice will be issued. The Warning Notice may require employers to correct violations within 10 days. The Warning Notice will usually include a date for a follow-up inspection within six months.

VI. NOTICE OF TECHNICAL OR PROCEDURAL FAILURES

A. Issuance of Letter
The auditor issues a Notice of Technical or Procedural Failures letter for all technical errors identified. Additionally, the employer will be provided with marked or highlighted I-9 copies and will be allotted 10 business days to make corrections. The employer must correct the technical or procedural failures within 10 business days after notice is given or the violations may be included in the Notice of Intent to Fine (NIF).

B. Substantive and Technical Violations
I-9 errors are divided into substantive and technical or procedural errors. Only the technical or procedural errors are correctable during the 10-day correction period.

VII. NOTICE OF DISCREPANCIES

The employer will receive a Notice of Discrepancies Letter for all known and suspected unauthorized workers. A notice explaining the employee’s responsibilities will accompany the letter and should be forwarded to each employee listed. Employees may challenge discrepancy findings by providing additional work authorization documents that were not produced before. If the employee cannot produce new employment authorization documents, the employer is obligated to terminate the employee.

VIII. NOTICE OF SUSPECT DOCUMENTS

The Notice of Suspect Documents Letter informs the employer that ICE has determined an employee is unauthorized to work. Additionally, the letter notifies the employer of the civil and criminal penalties associated with continuing to employ such employee. The employee may provide additional employment authorization documents to challenge the suspect findings. A Confirmation of Notice of Inspection Results (confirming unauthorized status) or a Change of Notice of Inspection Results (changing the original finding) will then be issued. If ICE cannot determine the employment authorization of the employee, the auditor will schedule an interview of the worker. An employer may be found to have constructive knowledge of the employee’s unauthorized status if the employer continues to employ the worker even if there was no interview conducted by the auditor.

IX. NOTICE OF INTENT TO FINE

A Notice of Intent to Fine (NIF) contains the facts, charges, statute violated, and penalties. You have the right to an administrative hearing if requested within 30 days. A final order imposing the penalty will be issued if no hearing is requested.

a. Penalties
Monetary penalties for hiring violations range from $375 to $16,000 per violation. Penalties for substantive violations range from $100 to $1,100 per violation.

b. Employer Response to the NIF
After the NIF is issued, you should review the violations. Determine defenses to the alleged violations and decide whether to litigate the case considering possible defenses, merits of the case, and the amount of the fine. If employer decides not to litigate the case, the employer should contact the ICE attorney who signed the NIF to attempt settlement.

c. Final Orders
ICE will issue a Final Order within 45 days of service of the NIF if a request for hearing is not received. A final order is also issued if there is a settlement agreement with ICE or the Office of the Chief Administrative Hearing Officer. The respondent will be ordered to pay the civil monetary fine stated in the final order.

d. Administrative Fines After I-9 Inspection
The following penalties can be issued against employers who have knowingly hired or continued to hire individuals not authorized to work:

  • First offense: civil fine of $375 to $3,200 for each unauthorized worker
  • Second offense: civil fine of $3,200 to $6,500 for each unauthorized worker
  • Every offense after the second offense: civil fine of $4,300 to $16,000 for each unauthorized worker
  • A “pattern or practice” of knowingly hiring unauthorized workers: criminal penalty of up to $3,000 for each unauthorized worker, in addition to up to six months’ imprisonment

X. EXTERNAL AUDIT

An external audit identifies and corrects the I-9 errors you are making. Extensive training and policies are also provided to the employee(s) in charge of the I-9 process to ensure errors will not be made in the future. Be ready for an NOI and have an external audit conducted by an I-9 auditing firm.

Jacob M. Monty is managing partner of Houston TX-based Monty & Ramirez LLP. Monty is board certified in labor and employment law by the Texas Board of Legal Specialization. He regularly advises employers on immigration compliance and often represents employers faced with Immigration and Customs Enforcement raids and I-9 audits. Monty & Ramirez LLP is an employment, labor, and business immigration law firm. Please visit www.montyramirezlaw.com for more information.


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