How-To Series

Follow These 5 Steps for an Effective Internal I-9 Audit

By

Lauren Rogers

| Mar 27, 2018

This blog is part of our ongoing how-to series, designed to help you tackle big initiatives and challenges with confidence. To see other blogs in this series, click here.

Increased scrutiny from U.S. Immigrations and Customs Enforcement (ICE) on whether your employees are authorized to work in this country means that employers need to be fully aware of the state of their I-9 compliance. No business expects to be audited. But when fines for errors on I-9 forms can range from $216 to $2,156 per worker, knowing that those documents are error-free can give you peace of mind.

An internal I-9 audit – or I-9 self-audit – can help you accomplish that. It gives you time to correct errors or find missing information without the pressure of an official audit.

Additionally, when consistent self-audits are a standard business practice for your organization, it becomes easier to defend against claims of retaliation or discrimination. If your organization ever does undergo an official audit, robust, documented internal I-9 audits can prevent you from being hit with fines, and gives your HR department experience in conducting an efficient, accurate audit of I-9 forms.

Here’s what you need to know in order to conduct an internal I-9 audit in your organization.

Before conducting an internal I-9 audit

Ensure your internal audit strategy doesn’t violate discrimination laws. While ICE’s priority is to ensure all workers in the U.S. are authorized to work here, the priority of the Office of Special Council for Immigration Related Unfair Practices (OSC) in this context is to ensure that individuals are not discriminated against based on citizenship status or national origin.

Fortunately, the way your organization conducts its internal I-9 audit can help it comply with both ICE’s and OSC’s priorities. Here are ways you can ensure you aren’t swinging the balance in the other direction when conducting your internal audit and becoming vulnerable to accusations of discrimination:

  • If you use E-Verify, you must run cases for all your employees. You can submit an E-Verify case past the three-day deadline if an internal audit reveals that a new-hire case was not completed. You will have to select this as the reason for submitting late verification. However, do not go back and run E-Verify cases for employees who were hired when your company was not enrolled in the E-Verify service.
  • During your audit, if you conduct a selective I-9 audit (rather than auditing all employees’ I-9 forms), be careful to ensure truly random selection. We’ll talk more about how to do that in step 1.
  • If you need additional or updated employment authorization documents, you must allow the employee to choose his or her own forms of I-9 acceptable documents. However, if a document he or she originally provided is insufficient for employment authorization, you may request that same type of documentation is not submitted again. Not every expired document can be updated, so consult the U.S. Citizenship and Immigration Services’ M-274, Handbook for Employers, if you are uncertain.
  • Have translators/preparers available for employees who don’t speak English, if applicable.

5 Steps for conducting an internal I-9 audit:

Step 1. Decide whether you will audit a random selection – or all – employee I-9 forms.

If auditing a selection of I-9 forms, make sure you’re able to verify the selection was in fact random – for example, using Excel’s “RAND” and “RANK” functions and documenting your selection process can help.

Auditing a selection of forms will help you assess your onboarding procedures, but may not be as effective as a full audit in correcting form errors. An internal audit of all I-9 forms also minimizes liability for claims of discrimination or retaliation, so that’s the process we’ll focus on here.

Step 2. Gather employee data.

You’ll need a list of all employees hired after Nov. 6, 1986, as well as a list of all employees terminated within the last three years. Collect paper or electronic forms for both lists.

If your company uses paper I-9 forms, make sure you have forms from all locations, or ensure that your regional HR offices also are conducting an internal I-9 audit according to best practices.

To do that, identify which locations store paper I-9 forms: company headquarters, regional or field offices, or even different departments. If some locations have paper forms, while others have electronic I-9s, you may be able to improve the accuracy of your internal I-9 audit by getting your forms into the same format, either by printing online forms (which can be risky) or by uploading paper I-9s to a secure electronic storage location.

The latter is the safer option, in the event of theft or weather damage.

At this point, you can collect paper or electronic forms and conduct the audit in a centralized location, or you can guide the audits of other locations. You may wish to designate someone in HR headquarters to call weekly and track progress to ensure consistent I-9 compliance across locations.

Step 3. Compare I-9 forms to the lists of current and terminated employees.

Note which forms have errors, missing sections or missing documents. Keep track of any employees who never completed I-9 forms at all (as long as they were hired after Nov. 6, 1986). It may be helpful to create an audit log with three sections to help you keep track: employee’s name, errors found and the actions taken to correct the errors.

Step 4. Make note of changes that need to be made.

Keep these notes with the corresponding I-9 form either with a sticky note or a note on the electronic document. Avoid writing directly on a paper I-9 form.

If reviewing paper I-9 forms, determine a contingency plan if the sticky notes falls off or if water damage occurs. How will you prove the noted changes were made? An electronic backup of the notes (in the form of an audit log or something else) can help you guard against the unforeseeable.

Paycom clients: You easily can collect all employee I-9 forms from the Employment Authorization Dashboard in our Document and Task Management tool. You also can make dated, secure changes with just a couple of clicks through I-9 correction tasks or by uploading a signed and dated note to an employee’s file. That’ll save you a lot of time when it comes to collecting and correcting I-9 forms.

Step 5. Correct omissions or discrepancies.

When making corrections, be careful to avoid making misleading changes; – it should be exceedingly clear when the original form was completed and when the correction was made. Following correct compliance procedures means that both dates should be obvious to anyone reading the document, regardless of his or her level of familiarity with your company.

If minimal omissions or inaccurate information exist in Section 1:

  • The employee (or a translator/preparer if necessary) must make the change.
  • The employee should draw one line through the inaccurate information, enter or write the correct information, and initial and date the correct information.
  • If the employee needs assistance, the translator/preparer should draw one line through the incorrect info, and enter or write the correct information. Then the employee should initial and date the correct information, and the translator/preparer should initial and date the correction next to the employee’s initials.

If there are minimal omissions or inaccurate information in Section 2 or 3:

  • The employer must make the change.
  • The employer should draw a line through the incorrect information, enter or write the correct or omitted information, and initial and date the changes made.

If the form was never completed, is missing or has substantial errors:

  • Complete the current version of the I-9 form as soon as possible. Do not backdate the form.
  • Note the actual date employment began and attach a signed and dated explanation of the action taken, to show good-faith compliance effort.

If an employee’s employment authorization or employment authorization document has expired, or if an employee has changed names:

  • Complete Section 3 on the current version of the I-9 form for re-verification.
  • Keep the completed Section 3 with the original Form I-9.
  • Keep in mind that U.S. citizens and noncitizen nationals (lawful permanent residents who presented a Form I-551 for Section 2), List B documents should not be re-verified, even if now expired. If the document was expired when completing the original Form I-9, correct Section 2 instead.

If an E-Verify error is found, the necessary action depends on when the employee was hired:

  • If the employee was hired while your organization was participating in E-Verify, create an E-Verify case for him or her immediately.
  • If  the employee was hired before your organization was enrolled E-Verify, do not create an E-Verify case for him or her.

After completing your internal I-9 audit

Once your HR department has completed an audit of your organization’s I-9 forms, you may want to consider a postmortem meeting with the HR team to identify areas for improvement. Regardless, you should ensure safe, secure storage of your I-9 forms and any corresponding employment authorization documents.

In the postmortem meeting, identify issues or patterns that arose during the audit that need to be addressed. Are there certain elements or stages where your organization consistently struggles (such as consistently late or incomplete forms)? Do certain locations or departments have significant numbers of delayed or poorly completed forms? What can your HR department learn from the internal I-9 audit to improve your practices and policies?

Summarize the postmortem meeting in an email to any key stakeholders, like the HR professionals involved in the audit. It’s helpful to collect the lessons learned in writing to refer to during next year’s internal audit, and it can help you prove a good-faith effort to improve your I-9 compliance if you were to undergo an official audit.

Before moving on to the next initiative, it’s crucial to ensure safe, secure storage of your I-9 forms and any corresponding employment authorization documents.

Paper is the less secure way to store these documents, but if your I-9 documents are physical, make sure they’re stored in a location that’s safe from potential water and weather damage, and  accessible only to those who should have access. Create and document a contingency plan for natural disasters that might affect your copies, like a flood, hurricane or tornado.

Electronic storage is the more secure way to store I-9 forms and any corresponding employment authorization documents – and your due diligence can help ensure their safety. Ask your IT department or service provider about how securely electronic I-9 documents are saved. Are they stored on your company’s server? In the cloud? On a secure third-party server? How frequently are backups performed?

No matter how your documentation is stored, make sure it is easily accessible. In an official audit, you may have as little as a three-day turnaround to send I-9 documents to the government, so it’s important you can access these items quickly.

Enjoy post-audit peace of mind

An internal I-9 audit gives you time to correct form errors without the pressure of an official audit. You can rest assured that your forms are completed accurately and that your HR department will know how to quickly and accurately conduct an official audit, in case your organization is ever required to do so.

If you have access to Paycom’s Employment Authorization Dashboard, you can collect what you need to make corrections efficiently and securely. To request a meeting and see a demo, click here.

To read about more ways that moving away from manual, paper processes can give you peace of mind, download our executive summary on the topic, Discover the Hidden Cost of Manual Processes.

DISCLAIMER: The information provided in this blog is for general informational purposes only. Accordingly, Paycom and the writer of the above content do not warrant the completeness or accuracy of the above information. It does not constitute the provision of legal advice, tax advice, accounting services, or professional consulting. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other professional services.

About the Author

Lauren Rogers

As a communications specialist at Paycom, Lauren Rogers keeps employees abreast of company news and events, and provides insight to industry leaders regarding issues affecting human capital management. With experience in marketing and communications, Lauren has written blogs and other materials for a variety of businesses and nonprofits. Outside the office, she enjoys gardening, testing new recipes and sipping something caffeinated with her nose in a book.

See more posts by Lauren Rogers