Self-Audit With Care

ICE audits begin to target financial institutions.

April 16, 2012

During the past two years, U.S. Immigration and Customs Enforcement (ICE), a division of the Department of Homeland Security, has shifted its focus from individual undocumented workers to those who hire such people by auditing employers’ hiring records.

ICE hasn’t targeted only employers that traditionally hire illegal immigrants (i.e., agricultural and service industries). Financial institutions also are being pursued, as are other businesses considered to be “related to critical infrastructure and key resources,” reports

In 2010, ICE conducted 2,196 immigration workplace audits, leading to criminal charges for 196 businesses and, ultimately, 199 criminal convictions. With these convictions come steep penalties, not to mention the costs associated with the loss of production and legal fees.

In 2011, ICE increased the number of audits to 2,300 businesses, reports. ICE expects criminal prosecution or civil fines to deter employers who may otherwise not carefully comply with our nation’s immigration laws.

The purpose of an ICE audit is to determine whether a business employs anyone not lawfully permitted to work in the U.S. and to penalize those that do. An ICE audit consists of a written notification of the audit followed by an immediate inspection of the employer’s hiring records, including Form I-9 and payroll records.

Even if a business is confident that it employs no illegal immigrants, if an employer receives an ICE audit notification it should quickly comply with the request for records and seek the advice of legal counsel.

In response to this surge in audits, lawyers have advised businesses to conduct self-audits of all hiring and payroll documents.

While a business can avoid the potential penalties and expense of drawn-out ICE audits by conducting a self-audit and curing deficiencies, it must take care not to expose itself to discrimination liability arising out of the self-audit.

Employees cannot be discriminated against or suffer adverse employment actions due to their national origin or race. The cost of a discriminatory act based on national origin or race can be just as costly as an ICE audit—and harmful to the employer’s public image.

The Justice Department is aware of the temptation to eliminate risk by terminating employees who
raise suspicion due to national origin or other factors during the self-audit.

The agency advises businesses to:

  • Implement a transparent process for interacting with employees during an ICE audit, including notifying employees that the business is subject to such an audit;
  • Give all workers a reasonable amount of time (no specified amount of time is suggested) to correct any discrepancies; and
  • Communicate in writing with employees when seeking information, describing the information needed or the basis for the discrepancy.

These practices will help the business meet ICE’s expectations and audit demands, ensure that no employees suffer or believe they suffer discrimination, and create a strong record of action in compliance with the applicable laws.

The Justice Department then cautions employers not to:

  • Selectively verify the eligibility of certain employees based on national origin or citizenship status after receiving an ICE audit notice;
  • Terminate or suspend employees without providing notice and a reasonable opportunity to present valid Form I-9 documents;
  • Require employees to provide additional evidence of employment eligibility or more documents than ICE requires you to obtain;
  • Limit the range of documents that employees are allowed to present for purposes of Form I-9; and
  • Treat employees differently at any point during the audit based on their appearance or assumptions on whether they’re authorized to work in the U.S.

When following this guidance, all businesses can benefit from a self-audit by identifying and curing hiring de-ficiencies, identifying or creating improvements to the Form I-9 process and recordkeeping system, and creating a record of discrimination-free action.

KELLY TILDEN is a shareholder at Farleigh Wada Witt, Portland, Ore.