Can a Wage and Hour Investigation Turn Into an I-9 Audit?
Yes, it can. A Department of Labor (DOL) Wage and Hour Division (WHD) investigation focuses on pay practices, but federal law also authorizes DOL to inspect Forms I-9. Additionally, in 2011, the Department of Homeland Security (DHS) and DOL signed a memorandum of understanding (MOU). Under it, U.S. Immigration and Customs Enforcement (ICE) generally agreed to refrain from civil worksite enforcement at worksites under an active DOL labor dispute investigation. However, in August, it was reported that DOL confirmed that the agreement “was not currently in effect.” But more on that below.
How Can One Wage Complaint Turn Into Two Federal Investigations?
Consider a hypothetical. A 60-person company has no visa workers and has never sponsored anyone. Leadership does not think of the business as having immigration compliance obligations.
A former employee files an overtime complaint, and WHD opens an investigation. Investigators request payroll and time records, interview employees and review how workers are classified. If WHD finds violations, the employer may owe back wages. WHD no longer seeks liquidated damages when it resolves an investigation before litigation. However, the Fair Labor Standards Act still allows an equal amount in liquidated damages if the matter proceeds to litigation, whether brought by DOL or by employees.
That investigation is costly on its own. But the same records and interviews can raise questions about whether the employer properly verified employment eligibility. If those questions reach ICE, the employer may receive a Notice of Inspection (NOI) with at least three business days to produce its Forms I-9.
Missing forms, blank Section 2 entries and missed reverifications can each be a separate violation, and fines are assessed per form. At that point, one wage complaint has become two enforcement tracks, run by two agencies, on the same workforce.
How a Wage and Hour Investigation Can Lead to an ICE I-9 Inspection
Two agencies, two enforcement tracks, one workforce
- 1DOL
A wage complaint is filed
An employee or former employee reports unpaid overtime, minimum wage or misclassification issues.
- 2DOL
WHD opens an investigation
Investigators review payroll and time records and interview workers. DOL also has statutory authority to inspect Forms I-9.
- 3Possible, not automatic
I-9 concerns reach ICE
The 2011 DHS and DOL agreement that generally kept ICE civil enforcement out of active labor dispute investigations is no longer in effect, according to DOL.
- 4ICE
Notice of Inspection
The employer has at least three business days to produce Forms I-9, often with payroll and employee lists.
- 5ICE
Inspection results
A compliance letter, a notice of technical failures (at least 10 business days to correct), a warning notice, or a Notice of Intent to Fine (30 days to request an OCAHO hearing).
Does Immigration Compliance Apply If You Do Not Sponsor Visa Workers?
Yes. The Form I-9 is an immigration form, and 8 U.S.C. § 1324a generally requires employers to complete one for every employee hired after November 6, 1986. Visa sponsorship has nothing to do with it.
It is important to note that this obligation generally covers U.S. citizens, part-time employees and remote employees alike. Under 8 CFR 274a.2, employers must also keep each form for three years after the date of hire or one year after employment ends, whichever is later.
Which Agencies Can Inspect Forms I-9?
Most employers associate I-9 inspections with ICE. However, 8 U.S.C. § 1324a(b)(3) requires employers to make Forms I-9 available for inspection by three agencies:
The Department of Homeland Security (DHS), which conducts inspections through ICE’s Homeland Security Investigations (HSI)
DOJ’s Immigrant and Employee Rights Section (IER)
The Department of Labor
8 CFR 274a.2(b)(2)(ii) gives employers at least three business days’ notice before an inspection. Civil fines for I-9 paperwork and knowing-hire violations, however, are assessed through ICE’s inspection process. That process runs from the NOI through a Notice of Intent to Fine (NIF) and, if the employer requests one, a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO). We walk through each stage of that process in What to Do If You Receive a Notice of Inspection From ICE.
What Changed in How Labor and Immigration Enforcement Interact?
For more than a decade, federal policy kept labor enforcement and immigration enforcement deliberately separate. Two of the main pieces of that structure have now been wound down.
The 2011 DHS and DOL Worksite Enforcement MOU
In 2011, DHS and DOL signed a memorandum of understanding (MOU) on enforcement activities at worksites. Under the MOU, ICE agreed to refrain from civil worksite enforcement at a worksite that was the subject of an existing DOL investigation of a labor dispute. That restraint lasted for as long as the investigation and any related proceeding were pending.
A 2016 addendum extended the arrangement to the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC). The MOU had exceptions, including matters involving national security, critical infrastructure, activity directed by the Secretary of Homeland Security, and activity requested by DOL.
As mentioned above, in August 2026, a DOL spokesperson publicly confirmed that the MOU is “not currently in effect.” DOL has not stated when it may go back into effect, if at all.
Deferred Action for Labor Enforcement (DALE)
In January 2023, DHS announced a process for noncitizen workers who were victims of, or witnesses to, labor violations. These workers could request deferred action and employment authorization while a labor agency investigated. Requests generally needed a statement of interest from the investigating agency, such as DOL, the NLRB, the EEOC or a state labor agency. The DOL process for requesting those statements dates to July 2022.
However, in January 2025, USCIS archived its DALE webpage, and the process has since been reported as ended. DHS has not published a formal termination notice.
What These Changes Mean for Employers
While there is an increasing cooperation between DHS and DOL when it comes to worksite enforcement, it is equally important to note what has not changed. The FLSA still prohibits retaliation against employees who file complaints or cooperate with a labor investigation. Using an employee’s immigration status in response to a complaint, such as threatening to report or selectively reverifying the complainant, can still create separate liability. It also creates potential discrimination exposure with DOJ’s IER.
But what has changed is the separation between the two investigatory tracks. A WHD investigation no longer carries a formal shield against ICE civil enforcement, and the workers involved no longer have a dedicated path to deferred action. This does not mean WHD refers every investigation to ICE. However, employers should assume that a labor investigation and an I-9 inspection can now proceed at the same time, on the same workforce.
Why Do Separate Compliance Programs Create Exposure on Both Tracks?
At many companies, payroll and timekeeping sit with one team, and I-9s sit with another or with no one at all. A wage-and-hour internal review checks pay. An I-9 internal review, if one happens, checks forms. Neither looks at the other.
This indicates that the safer approach is to review both together, on the same workforce, before any agency asks. A WHD records request is also a reasonable prompt to confirm your I-9 files are complete and any internal audit should be completed uniformly.
Notably, reverifying or auditing only the employees who complained, or only employees of a particular national origin, can create separate exposure. It can be treated as retaliation under the FLSA and as discrimination under IER’s authority.
Self-Check: Is Your Company Ready for Both Tracks?
Confirm you have a completed Form I-9 for every current employee, and for former employees still within the retention period.
Test whether you could produce every form within three business days, along with the payroll records and employee lists ICE typically requests.
Review forms for errors, not only for whether they exist. Check that Section 2 is complete and that reverifications were done on time.
Correct errors properly: strike through, enter the correct information, initial and date it, and attach an explanatory memo where needed. Never backdate.
Apply any internal audit to the entire workforce, not to selected employees.
Coordinate wage-and-hour and I-9 reviews so one review catches problems on both tracks.
How Elevate Justice Supports Employers Facing DOL and ICE Investigations
Elevate Justice helps employers prepare for and respond to investigations that can move from one agency to another.
Founder and Principal Attorney Emily C. Brown, Esq. previously served in the DOL Office of the Solicitor, where she handled legal review of H-2A and H-2B integrity audits and related appellate litigation. Her I-9 audit defense experience comes from private practice.
This blog post is for informational purposes only and does not constitute legal advice. Immigration policies change frequently. Consult with a qualified immigration attorney for guidance specific to your situation.
Frequently Asked Questions
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Yes. Under 8 U.S.C. § 1324a(b)(3), employers must make Forms I-9 available for inspection by DHS, DOJ’s Immigrant and Employee Rights Section, and the Department of Labor. Employers generally receive at least three business days’ notice before an inspection.
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Yes. A WHD investigation involves payroll records and worker interviews that can raise I-9 questions. In August 2026, DOL confirmed that the 2011 DHS-DOL agreement, which generally kept ICE civil enforcement out of active labor dispute investigations, is not currently in effect. A referral is possible, but it is not automatic.
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DescriptiYes. Form I-9 is an immigration form, and employers must generally complete one for every employee hired after November 6, 1986. That includes U.S. citizens, part-time employees and remote employees, whether or not the company sponsors anyone.
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Employers must keep each Form I-9 for three years after the date of hire or one year after employment ends, whichever is later. Forms must be available for inspection throughout that period.
