The Immigration Reform and Control Act, enacted on November 6, 1986, requires employers to verify the identity and employment eligibility of their employees and sets forth criminal and civil sanctions for employment-related violations. Section 274A(b) of the Immigration and Nationality Act (INA), codified in 8 U.S.C. § 1324a(b), requires employers to verify the identity and employment eligibility of all individuals hired in the United States after November 6, 1986. 8 C.F.R. Section 274a.2 designates the Form I-9, Employment Eligibility Verification (Form I-9), as the vehicle for documenting this verification. For current employees, employers are required to maintain for inspection original Form(s) I-9 on paper or as an on-screen version generated by an electronic system that can produce legible and readable paper copies. For former employees, the retention of Form(s) I-9 is required for a period of at least three years from the first day of employment or one year from the date employment ends, whichever is longer.
The administrative inspection process is initiated with the service of a Notice of Inspection (NOI) upon an employer. Employers receive at least three business days to produce the Form(s) I-9 requested in the NOI. Currently, employers who physically examine the documentation presented by new employees may choose to make and retain copies or scans of the documentation presented by employees for the purpose of completing the Form I-9. However, employers that use E-Verify must make and retain copies of documentation presented by employees for List A of the Form I-9. Lastly, qualified employers who use an alternative procedure with an employee must retain a clear and legible copy of all documents presented by the employee seeking to establish identity and employment eligibility for the Form I-9. If copies of an employee’s Form I-9 documents are retained for reasons unrelated to E-Verify requirements, they must be retained for all employees, regardless of actual or perceived national origin, citizenship, or immigration status, or the employer may risk violating anti-discrimination laws. Copies or electronic images of documents must be retrievable, consistent with DHS’s standards on electronic retention, documentation, security, and electronic signatures for employers and employees, as specified in 8 CFR 274a.2(b)(3). Copies or electronic images of the employee’s Form I-9 documents must be retained with the corresponding Form I-9 or with the employee’s records according to the electronic records retention standards specified in 8 CFR 274a.2(b)(3) and be made available at the time of a Form I-9 audit by DHS.
In addition, Homeland Security Investigations (HSI) generally requests that the employer provide supporting documentation, which may include, but is not limited to, a copy of the employer’s payroll, a list of active and terminated employees, articles of incorporation, and business licenses.
When an employer responds to an NOI by producing Form(s) I-9, HSI agents and/or auditors conduct an inspection of the Form(s) I-9 for compliance. When HSI finds technical or procedural failures, the employer receives at least 10 business days to make corrections, pursuant to INA §274A(b)(6)(B) (8 U.S.C. § 1324a(b)(6)(B)). An employer may receive a monetary fine for all substantive violations and uncorrected technical or procedural failures. Employers who are found to have knowingly hired or continued to employ unauthorized workers under INA § 274A(a)(1)(a) or (a)(2) (8 U.S.C. § 1324a(a)(1)(a) or (a)(2)) will be required to cease the unlawful activity and may be civilly fined and/or criminally prosecuted. Additionally, an employer who is found to have knowingly hired or continued to employ unauthorized workers may be subject to suspension or debarment by HSI under 48 C.F.R. § 9.406-2(b)(2).
Upon completing its inspection of an employer’s Form(s) I-9 and any related supporting documentation, HSI will notify the employer of its findings in writing by issuing one of the following notices:
- Notice of Inspection Results: Also known as a "Compliance Letter," this notice is used to notify a business that it complies with applicable employee eligibility verification requirements.
- Notice of Suspect Documents: Advises the employer that, based on a review of the Form(s) I-9 and documentation submitted by relevant employee(s), HSI has determined that the documentation presented by employee(s) do not relate to the employee(s) or are otherwise not valid for employment. This notice also advises the employer of the possible criminal and civil penalties for continuing to employ unauthorized workers. HSI provides the employer and employee(s) an opportunity to provide documentation demonstrating valid U.S. work authorization if they believe the finding is in error.
- Notice of Discrepancies: Advises the employer that, based on a review of the Form(s) I-9 and any related documentation submitted by employee(s), HSI has been unable to determine the employees’ eligibility to work in the U.S. The employer should provide the employee(s) with a copy of the notice, as well as an opportunity to present HSI with additional documentation establishing valid U.S. work authorization.
- Notice of Technical or Procedural Failures: Identifies technical or procedural failures found during the inspection of Form(s) I-9 and gives the employer at least ten business days to correct the forms. After this correction period ends, uncorrected technical or procedural failures will become substantive violations.
- Warning Notice: Issued when substantive verification violations were identified, but there is an expectation of future compliance by the employer. However, a Warning Notice should not be issued in the following circumstances: instances where: (1) the employer was previously the subject of a Warning Notice or a Notice of Intent to Fine; (2) the employer was notified of technical or procedural failures and failed to correct them within the allotted 10-business day period; (3) the employer had a 100% failure to prepare and present Form(s) I-9; (4) the employer hired unauthorized workers as a result of substantive violations; or, (5) there is any evidence of fraud in the completion of Form I-9 (e.g., backdating) on the part of the employer.
- Notice of Intent to Fine (NIF): May be issued for substantive violations, uncorrected technical or procedural failures, knowingly hire violations, and/or continuing to employ violations.
In instances where a NIF is served, charging documents specifying the alleged violations committed by the employer will be provided. Pursuant to 5 U.S.C. §§ 554-557, the employer is entitled to a hearing before an Administrative Law Judge at the Office of the Chief Administrative Hearing Officer (OCAHO). This request must be made within 30 calendar days of receipt of the NIF.
If a written request for a hearing is not timely received, HSI will issue a Final Order. There is no appeal from a Final Order. If a written request for a hearing is timely received, the employer may request to engage in settlement negotiations with HSI regarding the charges or fine(s) imposed prior to a hearing before OCAHO. If the employer and HSI reach an agreement, HSI will not file a complaint with OCAHO. However, if the employer and HSI do not reach an agreement, HSI will file a complaint with OCAHO. Additional information about OCAHO may be found at justice.gov/eoir/office-of-the-chief-administrative-hearing-officer.
Form I-9 Inspection Process
Determination of Civil Penalty Fine Amounts
The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act) adjusts the statutory minimum and maximum civil penalty fine amounts for knowingly hire/continuing to employ violations and substantive violations/uncorrected technical or procedural failures. These amounts are subject to annual adjustment. Please check the current Federal Register for the most updated minimum and maximum civil penalty fine amounts.
Since the passage of IRCA in 1986, federal civil monetary penalties have been increased pursuant to the Federal Civil Penalties Inflation Act of 1990, as amended by the Debt Collection Improvement Act of 1996. These adjustments are designed to account for inflation in the calculation of civil monetary penalties and are determined by a non-discretionary, statutory formula. See 73 Fed. Reg. 10130 (February 26, 2008), see also https://www.fiscal.treasury.gov/reports-statements/cvfr/.
The date when HSI serves the NIF on the employer is the fine assessment date that determines the civil penalty range that HSI administers.
To determine the base fine amount, the number of substantive violations/uncorrected technical or procedural failures and knowingly hire/continue to employ violations will be divided by the number of Forms I-9 that should have been presented for inspection. The percentage from this calculation is the violation percentage that will determine the minimum and maximum civil penalty base fine amount. This percentage may change depending on whether the offense being evaluated is the employer’s first offense, second offense, or a third or higher offense.
Once the base fine amount is determined, the five statutory factors (size of the business, good faith of the employer, seriousness of the violation(s), involvement of unauthorized worker(s), and history of previous violation(s)) will be given consideration by HSI to determine the total civil penalty fine amount for the substantive violations/uncorrected technical or procedural failures the employer will be charged with. See 8 U.S.C. § 1324a(e)(5) and 8 C.F.R. § 274a.10 (please check the current Federal Register for the most updated minimum and maximum civil penalty fine amounts).
The following table represents HSI’s criteria used to enhance, mitigate, or deem neutral the base fine amount.
|Business size||+ 5%||- 5%||+/- 0%|
|Good faith||+ 5%||- 5%||+/- 0%|
|Seriousness||+ 5%||- 5%||+/- 0%|
|Unauthorized Worker(s)||+ 5%||- 5%||+/- 0%|
|History||+ 5%||- 5%||+/- 0%|
|Cumulative Adjustment||+ 25%||- 25%||+/- 0%|