Does Your Company Pass Inspection?
By: Sheryl Lyons, Vice President, Business Development & Marketing
March 15, 2011
Achilles Group, HR Solutions, has known for over a year about the strategy of U.S. Immigration and Customs Enforcement (ICE) to crack down on I-9 non-compliance by issuing thousands of Notices of Inspection (NOIs). They issued 632 in July, 2009 and another 1,000 that December. In 2010 over 3,000 NOIs were issued. This is a stark contrast to 2008 when 503 NOIs were issued for the entire fiscal year.
It’s all about generating revenue, by fining employers who have not been complying with employment eligibility verification laws and regulations. Companies targeted are in “critical infrastructure” industries, including energy, commercial facilities, telecommunications, agriculture, utilities, transportation, shipping, banking, health and information technology. We have also seen a pattern which suggests restaurants are also being targeted.
Under I-9 regulations, ICE must provide at least three days notice to the employer prior to the inspection. Issuance of the NOI, delivered in person or by certified mail, is the first step in the audit process.
Employers found to have violated I-9 regulations can be subject to civil and criminal penalties. Civil fines can include monetary fines for employing unauthorized aliens, and for paperwork violations for not correctly completing and maintaining I-9’s. Criminal penalties are handed out when there is proof of intentional hiring of unauthorized workers.
But it doesn’t stop with I-9’s. The current administration has hired thousands of inspectors and auditors to enforce legal compliance with many worksite laws and regulations, like compliance with FLSA which determines positions entitled to overtime pay, and classifications of 1099 independent contractors. Many companies are also receiving Social Security No Match letters and Medicare coordination of benefits letters.
What should employers do to avoid audits?
Prevention is far more affordable than fines and penalties. Companies in critical industries might not be able to avoid Federal I-9, FLSA or 1099 audits, so it is important to get independent audits frequently. Depending on turnover, every two to three years is recommended. Once an NOI is issued, three days is enough time to ensure existing documents are in order, but it is not sufficient time to collect and verify employee ID’s, or self-audit and adjust employment classes. Contact Achilles Group for information on our compliance audits or HR Solutions.