Whether you favor or oppose the recent immigration legislation uproar in Arizona, it does serve as a reminder that all companies are required to properly and promptly complete Form I9s on all new hires and update any expiring documents used. A self audit of your I9 files on at least an annual basis should also be completed.

Federal Form I9 forms are likely more important than many think. Improper, incomplete or missing I9 forms are often overlooked until your company is subject to a Form I9 audit.

Required since November 1996, Form I9 documents show that each employee hired since that date (citizen or not) have shown identification that they are authorized to work in the U.S. Both employer and employee must complete the form. The Feds really do care.

 "Businesses need to understand that the integrity of their employment records is just as important as the integrity of their tax records or banking files." says Chicago based ICE spokesperson Gail Montenegro. ICE is the U.S. Immigration and Customs Enforcement, the investigative arm of the U.S. Department of Homeland Security.

ICE considers I9 audits as one of the most powerful tools the federal government has to enforce employment and immigration laws.  Last summer ICE announced an increased audit program to hold employers "accountable for their hiring practices and ensure a legal work force."

But is this really a concern for smaller businesses?

The step up of "Notice of Inspection of Hiring Records" started last July with notices to 652 businesses nationwide. More than ICE issued the entire previous year. Over 1000 audits were started in November with over 150 of those businesses in California.  Target companies are not selected at random and typically begin with investigate leads and gathered intelligence. An anonymous phone call that a specific company has undocumented workers is all it takes to get the attention of ICE. Many smaller companies have received notice during this enforcement increase.

ESS does offer a service to audit your I9 files and has an electronic Form I9 program that includes tools to help you manage your I9 files but in order to perform an self I-9 audit, you should review every I-9 form currently in the files and compare them to the list of current employees hired (or rehired) after November 6, 1986. If this isn't feasible, you can take a representative, random sample. Be sure the sample includes forms that were verified by each person responsible for I-9 compliance. For instance, if you have three managers who fill out I-9s, make sure the sample includes a reasonable number of forms that were verified by each manager.

Next, create two master lists of all active employees, with their dates of hire noted, and all terminated employees for whom an I-9 form is required, with dates of termination noted. Then create an "I-9 audit tracking form" listing each employee's name, date of hire, and date of termination (if applicable). Compare the list of employees against the I-9s. Identify any missing, incomplete, or improperly completed forms and fix any problems. Missing information should be conspicuously inserted, initialed, and dated.

If you choose to complete new I-9s rather than correcting existing forms, be aware that the new forms will not comply with the requirement to complete the form within three business days of hiring. However, the new forms can eliminate all other violations and enhance a "good faith" compliance defense. You must still retain the original I-9s, however, and should attach the original to the new form.

Because an I-9 audit can be performed over time, it can be less disruptive than a last-minute audit forced by a government inspection notice, which may offer as little three days of warning. Audits can be performed during your non-peak season, or over the course of several days or weeks, reducing both the cost and the effect on your business.

Please consult your legal counsel regarding the steps your company should have in place to maintain your Form I9 documents. Taking action now to review your I9 files is an important part of maintaining your business records.