Chapter 5- External I-9 Attorney Audits

Transcription

1 Chapter 5- External I-9 Attorney Audits 5.0 The External I-9 Audit The private external compliance audit contains the Form I-9 audit, the compliance program audit (Chapter 6) the liability audit (Chapter 7), and anti-discrimination and unfair immigration-related employment and penalties auditing (Chapter 8). The Form I-9 audit requires external attorney auditors to determine whether the retained I-9s contain substantive or technical and procedural errors; evidence of knowingly hired 1 or knowingly continuing to employ charges. 2 The Form I-9 audit also requires the auditor to crosscheck the I-9 forms against reference documents, including payroll records and related employment records 3 to make an assessment of missing 4 or questionable I-9 forms. Auditors will recommend remediation plans for I-9 errors to maintain the employer's good-faith affirmative defense against knowingly hired charges. 5 The attorney auditor will also make specific recommendations for the employer to correct deficient I-9s, including instructions as to the conduct of tardy verifications for missing I-9s. The auditor will provide supervision over the employer s remediation efforts. For these reasons, the auditor must have been trained with regard to administrative I-9 inspections, criminal worksite enforcement, the statutory and regulatory paperwork requirements, including technical or procedural, and substantive I-9 errors and omissions, as well as knowingly hired and continuing to employ violations, affirmative defenses, penalties and their mitigation. 1 INA 274A(a)(1)(A); 8 U.S.C. 1324a(a)(1)(A). 2 INA 274A(a)(2); 8 U.S.C. 1324a(a)(2) INA 274A(a)(3), 8 U.S.C. 1324a(a)(3). Page 1

2 5.01 External I-9 Audit Objectives and Scope The external I-9 audit is conducted by a qualified, independent attorney auditor in order to determine the employer s compliance with the employment authorization verification, attestation and retention requirements of Immigration and Nationality Act and the Department of Homeland Security regulations and policy and OCAHO precedent decisions. An external I-9 audit, conducted by a qualified attorney auditor, serves the objective of audited employer compliance. The external I-9 audit is an integral component of the immigration compliance audit which also includes the auditing of the employer s compliance and anti-discrimination programs, as well as its liability for civil or criminal violations and other immigration-related employment laws. The external audit is distinguished from other forms of I-9 review including the administrative IRCA I-9 inspection conducted by ICE according to the IRCA amendments to the INA, DHS regulations and policy and the internal I-9 review conducted by the employer without an outside attorney s engagement, and I-9 review by non-attorneys. The external I-9 audit is also distinguished from non-audit services including the statistical sampling of error in a particular group of Form I-9s. Sampling does not involve complete employer remediation with follow-up auditing, mitigation of potential penalties and the resolution of retention and statute of limitations case issues which are integral to I-9 external audit methodology. Sampling cannot substitute for an external I-9 audit conducted by a qualified attorney auditor as a component of a full immigration compliance audit and, therefore, does not serve the objective of audited employer compliance. Attorneys must be careful in a sampling engagement to communicate with the client, in writing, clarifying the limited scope of the work performed and confirming that the work is a non-audit service with inherent limited effect. Auditors that provide such non-audit services must also consider the ethical issue as to whether Page 2

3 providing non-audit services creates an impairment to future independence, either in fact or appearance, with respect to the entities they may be later asked to audit. The scope of the external I-9 audit depends on both intrinsic and extrinsic factors. The intrinsic factors which exist in every audit include the following: IRCA chronological verification and retention requirements- all employers are required to examine and verify the documentation of identity and the legal right to work of every new employee, whether U.S. citizen or alien, hired after November 6, Form and List Chronology-There have been six revisions of the Form I-9 since its first publication date (05/07/1987) but only three significant changes to the lists of acceptable authorization and identity documents since that time. 6 There has been a prosecutorial discretionary policy for employer use of the 1991 version of Form I-9 (Form I-9 version 11/21/91, Appendix 2b), including the use of the accompanying lists A, B and C, before December 26, The Virtue Memorandum treats timeliness violations that occurred before IIRAIRA s September 30, 1996 effective date as substantive failures that are not covered by the INA 274A(b)(6) defense. 8 Section 1 and 2 timeliness failures that occurred after September 30, 1996 are considered technical and procedural failures that should not be the subject of a NIF or complaint unless the good faith notice and correction opportunity is afforded qualifying employers. 6 See ; 5.01 Table 1, Auditor Chronological I-9 and Document Lists; See also Form I-9 Versions, Appendix 2. 7 M-274 Handbook for Employers at 3 (Nov. 1, 2007). 8 Timeliness errors that occurred prior to September 30, 1996 are time-barred today Page 3

4 Effective Dates I-9 Version June 5, 1987 to Nov. 20, /07/87 Nov. 21, 1991 to Dec. 31, /21/91 May 31, 2005 to Dec. 26, /31/05Y Nov. 26, 2007 to April 2, /05/07 N April 3, 2009 to present 02/02/09 or 08/07/09 Table 1: Chronological I-9 and Document Lists As Table 1, demonstrates, the I-9 audit process continually demands the auditor s awareness that both the proper I-9 form and the accompanying document list will depend on the date that the employment began 9. Nevertheless, there are significant agency publication developments that also must be remembered during the I-9 audit, as follows: The original Form I-9 version 05/07/87 contained the document list on its face, without an accompanying List A, B and C. The lists A, B and C on an accompanying page did not appear until the Form I-9 11/21/91version. The Form I-9 and the accompanying document list remained virtually unchanged from November 21, 1991 until November 26, 2007, a period of over 16 years. The Form I-9 version dated 05/31/2005 is a rebranded version of the 1991 edition reflecting the INS to DHS transition. Another major point for auditors to remember is that the CIS unexpired document Interim Rule was not implemented until April 3, Both permissible 2009 versions of the Form I-9 contain the lists which reflect the unexpired document Interim Rule s requirements. 9 Form I-9 Versions, Appendix Fed. Reg (Feb. 3, 2009). Page 4

5 The auditor must determine if each one of the required Forms I-9 is properly retained and contains substantive or technical and procedural paperwork violations requiring remediation in order to mitigate potential violations and to begin the running of the statute of limitations. The auditor is also responsible for determining whether there are missing Forms I-9 and evaluating the employment records to determine if there is evidence of knowingly hired or continuing to employ pattern and practice or indemnification violations. The audit s chronological scope will depend on whether the auditor is able to determine that there has been a previous external I-9 audit with remediation and a follow-up audit, conducted according to generally-accepted immigration compliance audit standards for a specific chronological period by a previous attorney auditor, the report and records of which have been provided to the current auditor. The chronological scope of the audit also depends on whether the current auditor has previously conducted an external I-9 audit for the employer according to generally-accepted immigration compliance audit standards for an earlier chronological period, with successful remediation and a follow-up audit. The scope of the audit may also be affected by the situation where the employer was previously the subject of an agency I-9 inspection with a resulting IIRAIRA 10- day notice detailing technical and procedural errors, and/or a notice of intent to fine or a complaint filed with OCAHO. The extrinsic factors 11 which affect the scope and objectives of an external I-9 audit will be found in the employer s answers to the auditor s questions described in subsection 5.02 and the Page 5

6 documents provided according to the sample checklist found in subsection of this book. In addition, the auditor is required to consider the following additional external factors: ICE IMAGE Program participation requires the auditor to determine whether the employer is in compliance with the IMAGE Program s best practices concerning the I-9 verification requirements which includes annual Form I-9 audits, self-reporting procedures for deficiencies, a Form I-9 training program, trained compliance employees and supervisors and an annual report; E-Verify program membership is another extrinsic factor which requires the auditor to determine the status of the employer s program involvement, whether as a government contractor, or an identified subcontractor required to join the program under the FAR Final Rule, under state law where the employer is doing business 12, or as a voluntary member. The audit requires a determination concerning the employer s lawful compliance with the program s memorandum of understanding; Whether the employer is or has been the subject of previous government IRCA I-9 inspections, and their disposition; Whether the employer is subject to the requirement of public company disclosure of potential I-9 enforcement liability on a financial statement under Sarbanes-Oxley; Whether the employer is subject to auditor certification of client I-9 verification compliance as a condition of the terms of a civil or criminal settlement; and Whether the employer has an enforcement history of employer sanctions civil penalty assessments, debarment, prior criminal cases or has been identified as a target of a federal 12 Certain states require E-Verify Membership for public and/or private employers See Table: States Requiring E- Verify, found online at National Conference of State Legislatures Website, Page 6

7 grand jury investigation concerning DHS worksite enforcement, including I-9 verification issues. The auditor must include an evaluation of recruitment questions, as well as factors governing constructive or actual knowledge of unauthorized hiring or continuing employment. When planning the objectives and scope of the I-9 audit, the auditor must design a risk assessment plan that will provide reasonable assurances of detecting fraud, illegal acts or violations of provisions of contracts or agreements that could have a material effect on the audit. When it is combined with the overall audit plan, a realistic risk assessment provides the employer and the auditors with a balanced view of the overall compliance picture and increases the probability of a successful audit. If during the course of the engagement, auditors become aware of abuse that may be material, they must apply procedures specifically directed to ascertain the potential effect on the audit s subject matter. After performing additional work, auditors may make the determination that the abuse represents fraud or illegal acts. Audit findings may involve deficiencies in internal control, fraud, illegal acts, violations of provisions of contracts or grant agreements, and abuse. The elements needed for a finding Page 7 depend entirely on the audit s objectives.