U.S. Immigration and Customs Enforcement (ICE) officials have issued Notices of Inspection to at least 34 New Jersey businesses to audit their hiring records. In addition, at least 25 New Jersey businesses have been warned that they may face fines totaling roughly $1.25 million for failure to properly verify their workforce. Of the businesses that received a Warning Notice, or a Notice of Intent to Fine (NIF), five are located in Bergen and Passaic counties.
The reason for the audits is to crackdown on illegal immigration. However, employers should be forewarned that these immigration enforcement efforts not only target illegal workers, but also the workforce that is 100% legal.
ICE's aggressive enforcement efforts are two-fold:
1.To ensure employer compliance with employment eligibility verification laws, and2.To prove employees are working legally.
One of the more publicized compliance tests used by ICE auditors examines employer employment records to ensure that a properly completed Form I-9 is maintained for each employee. Form I-9 verifies that each new employee (both citizen and noncitizen) hired after November 6, 1986 is authorized to work in the United States. Failure to properly maintain these forms could result in civil as well as criminal penalties. Civil penalties for administrative fines range from $110 to $1,100 per violation, and $375 to $16,000 for substantive violations. Criminal penalties include fines of up to $3,000 per employee and/or six months imprisonment.
By performing a simple self-test, similar to the I-9 test employed by ICE as described above, you can determine if your employment records are up to par. Randomly select a few new hire employee files (limit it to one per year over the last five to ten years) to see if you even have a completed Form I-9 in their files. If you don't even have a Form I-9, then your files are obviously deficient. However if you have a completed Form I-9, the next step would be to review it to ensure that it is properly completed in accordance with the Form I-9 instructions that can be found at www.irs.gov
If your employment record retention policy needs some improvement, here are some suggestions for proactive steps you can take to ensure compliance:
- Implementation of uniform policies and procedures during the hiring process
- Proper training for human resources personnel
- Conducting internal compliance audits
- Becoming a member of IMAGE - ICE's voluntary compliance program at www.ICE.gov.
More importantly, taking such steps can go a long way to potentially mitigating the extent of fines imposed in the event of an external audit by the federal government.
Immigration officials report that tips from other government agencies and from the public are among the ways employers are targeted for audit - a good reason to keep your friends close, and your enemies closer.
ICE is the largest investigative arm of the Department of Homeland Security. As you can see, ICE is aggressively pursuing employer compliance verifying and documenting workforce eligibility. For better or worse, these compliance efforts are just ramping up and are expected to increase in future years. In fact for Fiscal Years 2010-2014, ICE listed employer compliance as its third highest priority in its strategic plan. This could result in huge payoffs for the federal government.
We strongly urge New Jersey businesses to take immediate action to avoid subjecting themselves to unnecessary risk and liability.
For additional information, please contact
your Engagement Principal or
Tina M. Gulich, CPA, CFF
