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Approaching the End of the DHS Virtual I-9 Processing Option

This post discusses the risks of failing to comply with the Secondary Inspection requirement of the March 2020 DHS/ICE I-9 Flexibility Guidance.


The Department of Homeland Security (DHS) and its antecedent, the U.S. Immigration and Naturalization Service (INS) interpret the employee verification provisions of the Immigration Reform and Control Act of 1986 (IRCA) require every new hire to complete Section 1 of the I-9 form and to appear in person before a representative of the employer to present their identify and work authorization documents for inspection within three business days or 72 hours of the date of hire.  The official performing the in person inspection is required to attest under penalty of perjury that she has inspected the documents presented by the employee, that the documents appear to be genuine and relate to the employee and that to the best of her knowledge the employee is authorized to work in the United States.

For over 30 years, DHS has adhered to the I-9 in-person document inspection requirement. COVID shutdowns and remote work orders induced the agency to provide employers with a temporary flexibility compliance option, permitting them to conduct I-9 document inspections virtually for newly hired remote workers. The virtual flexibility option, would terminate, however, upon the earlier of the employee’s return to the worksite, or the agency’s terminatiom of the virtual inspection option. Upon the earlier of those events, employers would be required to conduct an in-person, secondary inspection of the worker’s I-9 documents, and document the in-person inspection and verification on the I-9 form. See Form I-9 Examples Related to Temporary COVID-I9 Policies, U.S. Citizenship and Immigration Services (November 24, 2020.)

DHS Responds to the Exponential Growth in Remote Work Triggered by the COVID Pandemic

During the COVID crisis, large numbers of employers in the professional services, technology, staffing, and higher education industries offered a remote work option to recruit and retain employees. In recognition of the exponential growth of remote work, on October 26, 2021, DHS issued a Request for Public Input (RPI) “seeking comments from employers, employer organizations, employee groups, and other members of the public on document examination practices for Form, I-9, Employment Elibility Verification.” The RPI included a list of questions grouped into two categories: ” “Experiences with Pandemic-Related Document Examination Flexibilities” and “Considerations for Future Remote Document Examination Procedures.” The overwhelming response advocated for approval of the virtual examination process.

On August 18, 2022, DHS issued a Notice of Proposed Rulemaking (NPRM), seeking to confer authority upon the Secretary to design and implement a pilot program testing the effectiveness of virtual inspection to verify the identity and work eligibility of newly hired remote workers as an alternative to in-person document inspection and verification.  More than 500 comments were filed, overwhelmingly applauding DHS for considering adoption of a virtual inspection alternative to in-person review.

The NPRM led many employers to assume that DHS would waive the secondary inspection requirement under the March 2020 Flexibility Guidance. DHS dashed those hopes in an October 31, 2022, Notice in the Federal Register extending the Flexibility Guidance through July 31, 2023 — but continuing to insist that the secondary inspection requirement must be completed within the applicable 72-hour time frame.  For employers who would continue virtual inspection through the end of the I-9 flexibility compliance period, that meant that all secondary inspections for remote workers must be completed by August 3, 2023 — the height of the vacation season.

Employers continue to hope that a final rule would authorizing implemention of the virtual I-9 project would be finalized prior to July 2023, and that the secondary verification requirement would be waived for employers participating in the project.  Those hopes are probably ill-founded, since a final rule would merely clear the way for further DHS rulemaking redefining the IRCA “physical inspection” requirement, the procedures for implementing the virtual I-9 inspection project, and the conditions for employer participation or disqualification.

To Comply or Not Comply: Now is the Time for Decision

As the July 31, 2023 termination date of the I-9 Flexibility Compliance Guidance approaches, employers face a major business decision:   Should they ignore the secondary inspection requirement and continue to complete I-9s virtually, or should they develop a plan for completing the secondary inspection process no later than August 3, 2023?   In making this decision, publicly held companies must consider whether non-compliance would require public disclosure of the risk of civil fines and penalties.  Government contractors should consider if non-compliance could risk debarment from federal contracting. All employers should consider the possibility of an ICE I-9 audit and their potential fine exposure.

What is the Potential Exposure for Non-Compliance with the Timely Secondary Inspection Requirement?

Non-compliant employers face potential civil money penalties in the hundreds of thousands depending on the number of remote worker I-9’s that do not reflect a secondary, in-person document inspection:

Failure to Present Violations

I-9 forms lacking documentation and attestation that secondary verification was performed would fail to satisfy current regulatory compliance standards. Precedent cases treat the failure to properly conduct in person document inspection and verification as among the most serious of all paperwork violations tantamount to not completing any I-9. E-Verify confirmation of work authorization in such cases is not a recognized defense.   In the event of an audit, if 50 percent or more of the I-9s contain violations, ICE could assess a base fine at the top of the fine range: i.e., $2701 per violation under the 2023 fine schedule.

Failure to Timely Complete

Failure to conduct secondary inspections within the applicable 72-hour time frame would constitute timeliness violations. Precedent treats timeliness violations as serious. Fine assessment will depend on mitigating and aggravating factors, but could be set at or above the mid-point of the fine range. If 50 percent or more of the audited cases contain any I-9 violations, the failure to timely complete secondary verification could easily result in a six or seven figure fine depending on the number of violations.

Continued Use of Virtual Inspection Alone After July 31, 2023, Will Aggravate Fine Assessments

As discussed above, current DHS regulations require that an employee’s documents be inspected in the presence of an employer representative.  When the Flexibility Guidance expires, virtual inspection will no longer be an authorized method of completing I-9 forms.  As such, an employer would be held liable for failing to present compliant I-9 forms. E-Verify confirmation of work authorization will not act as a defense. Base fines would likely be assessed at the high end of the fine range, with add on fines for willful failure to comply.

The Presence of Unauthorized Remote Workers Only Virtually Inspected Could Be Charged as Knowing Violations under the Constructive Knowledge Doctrine.

Should ICE discover unauthorized workers among the population of remote workers who were not secondarily inspected in a timely manner, the employer could be charged with knowing violations if facts indicate that unauthorized status could have been detected through timely completed secondary inspection. The current fine for such violations is up to $5400 per unauthorized worker, plus or minus aggravating or mitigating factors.

Potential Disqualification from Participation in the DHS Virtual Pilot

A decision to ignore the DHS/ICE directive to cease virtual verification by July 31, 2023, and/or to not complete the required secondary inspection process within the applicable 72-hour period could render an employer ineligible for participation in any future virtual I-9 verification pilot program.  This is so because the August 2022 NPRM sets as a condition of participation in a virtual verification project that the employer have no history of I-9 paperwork or knowing hire violations. 

Potential SEC Disclosure Requirements

Publicly registered companies are subject to state and federal securities regulations requiring public disclosure of actions and decisions with the potential to adversely effect shareholders. A deliberate decision not to comply with federal I-9 requirements has the potential of future adverse publicity in the event of an audit, possible loss of personnel deemed unauthorized to work, and substantial civil money penalties.

Federal Contract Debarment

ICE reports substantial IRCA non-compliance to the federal General Services Administration which can disqualify the company from the award of government contracts.


Considering the potential adverse consequences, compliance with current DHS/ICE procedures would appear to be the wiser business decision. Plan to evade the I-9 ticking time bomb.