By: Bruce E Buchanan, Sebelist Buchanan Law



Today I’m going to focus on construction companies and the amount of damage that can be done by the failure to be compliant in I-9 compliance. This will be a two-part article with the ending to be published tomorrow.

In the construction business, there are so many variables on getting a project completed on time and profitable, including the weather, sufficient labor pool, and quality of the workforce. There is another potential barrier to getting a project completed on time – U.S. Immigration & Customs Enforcement (ICE) serving a Notice of Inspection (NOI) (also called audit). Although most contractors won’t experience a NOI, if one occurs, it can be crippling if the contractor is not prepared.

Construction Industry is a Target for ICE NOI

The construction industry is one of five industries where an ICE NOI is most likely to occur, with the others being - hospitality (hotels, restaurants), manufacturing/food processing, critical infrastructure (power plants, airport employers), and staffing agencies. And it doesn’t matter if you are a small contractor (under 100 employees), medium size contactor (101 – 500 employees), or large employer (over 500 employees). ICE has served NOIs on all sizes of contractors. I have represented businesses with as few as 5 employees and as many as over 1,000 employees.

How Much Could an ICE Audit Cost in Penalties?

ICE audits can be expensive. The penalties are from $230 to $2,292 per I-9 form for first offense for substantive violations or uncorrected technical errors. The level of penalty depends on the percentage of I-9 forms in violation. The average penalty is $1400 per I-9 form. I am currently representing a medium size road contractor, who ICE alleges owes $767,000. Hopefully through negotiations the penalties will be substantially reduced. However, a substantial reduction from $767,000 is still a hefty penalty to pay. A few years ago, an Atlanta-based contractor, M & D Masonry, paid $232,000 in penalties.

ICE Audits Can Cost a Contractor a Significant Part of Its Workforce

Additionally, ICE audits can cost a contractor a significant portion of its workforce. I’m currently working on a case in the Midwest where, pursuant to an ICE NOI, ICE reviewed the I-9 forms and documentation and determined approximately 50% were not authorized to work and had provided the employer fake green cards. Since an employer is only given 10 days to discharge these employees, unless new documentation is provided, a 50% reduction in their current workforce may have a very detrimental impact on the employer.

What Should a Contractor Do to Minimize Penalties and Loss of Workforce?

One of the best ways to prepare for an I-9 inspection by ICE is to conduct an internal I-9 audit, conducted or supervised by an experienced immigration compliance/worksite enforcement attorney. Through this audit, numerous errors will likely be found, most of which can be corrected so that if ICE inspects your I-9 forms, the errors will not be considered substantive. And don’t kid yourself, your I-9 forms have many errors. In all my years of practice, I don’t recall any employer’s I-9 forms as impeccable. The average employer’s I-9 forms have an over 55% error rate.

Also, don’t be fooled by the fact that all your employees are U.S. citizens. You can still have substantive and technical I-9 errors. Another common comment from employers is “I’m in great shape as we use E-Verify.” Although E-Verify is excellent in establishing who is authorized to work, it cannot identify substantive or technical errors on the I-9 forms. One proven method to reduce substantive or technical errors on the I-9 forms is using the “smart” I-9 form, which was introduced by the USCIS in 2016.

Additionally, an internal I-9 audit may be able to identify undocumented workers. How so? Although employers must accept documents appearing genuine and relating to that individual, your immigration compliance attorney should be able to analyze your I-9 forms and accompanying documentation, if retained, and determine fraudulent I-9 forms and/or documentation.

Tomorrow, I will discuss what to do after delivery of a NOI.