I-9 Audits: What Small Businesses Need to Know

As a U.S. employer, chances are you already know that when you hire a new employee, they need to complete an I-9 form. This form certifies your new hire's identity and immigration status—and acts as proof that they're legally allowed to work in the U.S. 

It's important to make sure that every new employee fills out the I-9 form, that they fill it out correctly, and that you keep their signed form on file. Why? Because if you don't, you put your business at risk of getting audited—which can be a serious (and potentially expensive) headache.

But what, exactly, is an I-9 audit? What might trigger an audit? And, as a business owner, what can you do to keep your business (and your employees) protected? 

What is an I-9 Audit?

An I-9 audit is an official review of all of your Form I-9s. During the audit, federal immigration and customs enforcement officials check the forms to make sure they're accurate—as well as confirm that your employees do, in fact, have work authorization and citizenship status. 

These audits are typically conducted by the Department of Homeland Security (DHS) and the U.S. Immigration and Customs Enforcement (ICE, which is an agency of DHS).

Does ICE Need a Warrant for an Audit?

Nope, these agencies don't need a warrant for audits. But if you're on the list to get audited, they will issue you a Notice of Inspection at least three days ahead of time. (Consider it your heads up.) 

Depending on the situation, the Notice of Inspection might instruct you to send copies of your I-9 records to the auditing agency—or the agency might come to your business to review the paperwork in person. 

What Might Trigger an Audit?

ICE will sometimes randomly audit businesses—but it's pretty uncommon. Generally, most audits have some sort of external trigger.

Some common triggers for I-9 audits include:

• Complaints from individuals: Sometimes, all it takes to trigger an audit is an individual complaint—even if that complaint doesn't have any merit. For example, anyone—like a terminated employee that feels that they were treated unfairly, a candidate that thinks they lost a job opportunity to an undocumented worker, or a competitor that's looking to throw a wrench in your growth—could log a complaint with ICE or DHS, triggering an audit.
• Data analysis: ICE and DHS have access to a huge volume of employment data, including data related to immigration. They use that data to monitor different industries and geographic areas, identify trends, and look for potential red flags to determine when audits are necessary. 
• Other government agencies: Entities like the IRS can also trigger an I-9 audit. For example, if, after reviewing a company's tax information, the IRS has reason to believe they are hiring undocumented workers, they'll generally share that intel with ICE—who will then take the lead and conduct an audit on the business. 

What Happens During an I-9 Audit?

As mentioned, an I-9 audit begins with a Notice of Inspection (NOI). Once you provide all of your I-9 forms and any requested supporting documentation (like a copy of your business license, payroll, and list of all current employees), the agency will review everything. Once the review is complete, if you pass, you will receive a Notice of Inspection Results.

What Happens if You Fail an I-9 Audit?

If you're not in compliance, depending on the issues, you'll receive one or more additional notices instructing you of next steps, including:

• Notice of Suspect Documents: This Notice means ICE discovered that one (or more) of your employees is unauthorized to work in the U.S. In this situation, you and your employee will have an opportunity to show additional documentation to prove their legal status before any other action is taken against you/them.
• Notice of Discrepancies: If you receive this notice, it means they were unable to determine your employee's work eligibility. In this case, your employee will have to complete a reverification process, which includes submitting additional documentation to prove their employment authorization.
• Notice of Technical or Procedural Failures: If you receive this notice, it means there was a technical error on one of the forms you submitted. You'll have ten business days to re-submit the correct information with complete sections. Otherwise, your business will be subject to a monetary fine.
• Warning Notice: If ICE found verification violations during their audit—but violations that aren't serious enough to warrant a fine—you'll receive a warning notice to take care of said violations. This warning is issued with the expectation of your future compliance; otherwise, you could find yourself facing fines in the future.
• Notice of Intent to Fine (NIF): An NIF can be issued to your business if the agency believes you continually and knowingly hire and employ ineligible employees—and, as such, are subject to a fine. You could also get a Notice of Intent to Fine if you've received previous Warning Notices and are still not in compliance.

What Are the Penalties?

If the employee(s) in question can't show approved I-9 documentation proving their employment authorization, like a passport or social security card—you could face fines or sanctions if you continue to employ them. 

On top of the business consequences, there could also be serious consequences for the employee—as the immigration officials could potentially return to your business (or the employee's home address) to arrest them. 

How Can You Prepare for an I-9 Audit?

Being audited is never fun. But the good news? There are a lot of proactive, preventative steps you can take to make sure that if you do get audited, you'll be ready. 

From conducting an internal audit to simply staying organized, here are a few ways to make sure your business is prepared for an audit of your I-9s:

Collect Form I-9 Before an Employee's First Day

If you get audited, you'll need to provide all of your employees' I-9 forms—and the last thing you want to do right before an audit is run around trying to get employees to fill out and sign outstanding I-9s. 

Which is why, if you want to be prepared for a potential audit, it's important to collect these forms from the get-go.

Make collecting I-9 forms part of your standard onboarding procedures. Keep both a physical copy and a digital version for your own records—and keep all those forms stored and organized in the same place (for example, physical copies in a locked filing cabinet and digital copies in a secure folder on your company's internal drive). 

That way, if you do get audited by ICE, all the documents you need are easily accessible and ready to hand over to the auditing agents.

Review and Complete Each I-9 Form Immediately

You're a busy business owner—and when an employee submits their I-9 form, you might be tempted to just take a quick glance before filing them away. 

But if all you do is give the form a quick once-over, if there are mistakes, chances are, you're going to miss them. 

When you receive a new I-9 form, take the time to review each element and make sure everything is filled out correctly—which includes confirming the employee has signed each required section, filled out every certification box, and provided the required documentation to prove their eligibility. You'll also want to make sure that the parts you, the business owner, are responsible for filling out are correct and complete.

Here's what you're going to want to look for in each section:

Section 1

This section is completed by the employee and should include:

• Full legal name
• Other legal last names (for example, a maiden name)
• Current address
• Date of birth
• Citizenship or immigration status
• Alien Number, USCIS Number, form I-94 admission number, or foreign passport number (if applicable)
• Signature and date
• Social Security number (optional—although if your business uses E-Verify, the government's web-based employment verification system, an SSN is required)
• Email address (optional)
• Telephone number (optional)

Common Mistakes:

• Incomplete information (for example, only writing a first name, not including the state and zip code in the address, etc.)
• Missing signatures
• Incorrect or incomplete Alien, USCIS, I-9, or passport number
• Missing the completion deadline (this section should be filled out on the employee's first day of employment)

Section 2 

This section is completed by you, the employer. To accurately complete this section, you'll need to:

• List the documents provided by your new employee to verify their identity and employment eligibility (for example, a U.S. passport). 
• Closely examine each document.
• Enter the document title, issuing title, numbers and expiration date from these documents.
• Enter the employee's full name and citizenship/immigration number.
• Enter the date your employee will begin working.
• Enter your own first and last names, signature, and title.
• Add your business name and address.

Common Mistakes:

• Not entering documents correctly
• Asking for too much or too little acceptable documentation (If an employee provides documentation from List A—like a U.S. passport or permanent resident card—that's all you need. If they don't have a document from List A, you'll need to enter a document from List B, which establishes identity—like a driver's license—and List C, which establishes employment authorization—like a birth certificate or Certification of Birth Abroad)
• Missing or incomplete information (like forgetting to add the employee's day of hire or your complete business address)
• Missing signature
• Missing the completion deadline (this section should be filled out by your new hire's third day of employment)

Section 3 (Reverification and Rehires)

If and when an employee's employment verification expires (for example, if their passport expires), you'll need to reverify their eligibility and fill out Section 3. To do so, ask the employee to bring in unexpired verification documents and then:

• Examine the unexpired documents to make sure they're valid and accurate.
• Record the document title, number, and expiration date.
• Enter the full name of the employee.
• Sign and date Section 3

Section 3 can also be used for rehires. If you rehire an employee within 3 years of the date their last Form I-9 was completed, you can update Section 3 on their previous form. (You can also opt to have them fill out a new form). If you do decide to use their previous I-9, you'll need to:

• Review the original I-9 form to determine their work eligibility.
• Make sure their previous documentation is still valid and not expired.
• If their employment authorization documentation has expired, ask for new documents and input the info into Section 3. 
• Enter the date of their rehire. 
• Sign and date Section 3. 

Common Mistakes:

• Not tracking when an employee's documentation expires
• Not giving employees notice that they'll need to go through the reverification process (employers are required to give employees at least 120 days' notice before they verify their new documents)
• Missing or incomplete information
• Missing signature

Also, when you're reviewing an I-9 form, make sure you're using the latest version, which you can access via the U.S. Citizenship and Immigration Services website.

Conduct a Self-Audit

If you want to prepare for an I-9 audit, as a business owner, one of the best things you can do?

Audit yourself.

Is a self-audit fun? Not necessarily. But taking the time to audit your forms and make sure everything is in order can save you from major headaches if and when you find yourself facing a real audit in the future. 

So, what does a self-audit look like in action? As you're auditing your forms, make sure to:

• Have (or create) an up-to-date list of all current employees: You'll also want to pull a list of all former employees that have worked at your business over the last three years.
• Confirm that you have completed I-9s for all current and recent former employees: Again, you'll want to pull forms for current employees and any individuals you've employed over the past three years.
• Verify that you have acceptable documents on file for all employees. This could include a valid U.S. citizen passport or a social security card and another form of photo identification (like a driver's license). You'll need this documentation to complete employment eligibility verification for each employee.
• Confirm every form is signed and accurately dated, including the date of hire. A form isn't valid unless it's dated and signed!

Get in Touch with a Lawyer

If you have concerns about how prepared (or not prepared) you are for an I-9 audit, you might consider reaching out to an immigration attorney. They can give you advice on preparing for and navigating an audit—and if any legal issues do come out of your audit, they can help with handling the aftermath. 

Protect Yourself (and Your Business!) from an I-9 Audit

No one wants to get audited. But I-9 audits are a reality, and they can happen to any business—including yours. But the good news is, now that you understand how these audits work—and how to prepare for one—you're armed with the information you need to successfully navigate an audit and keep your business (and employees!) safe if and when you find yourself facing one.