The decision has far-reaching effects outside of Arizona. By upholding the law, the Supreme Court has cleared the way for 50 different state laws regarding employment eligibility verification and the penalties for noncompliance. As such, employers need to be aware of the laws in their state when hiring new personnel. For further information regarding E-Verify, visit our Worksite Compliance web site. Contact your Klasko Law attorney if you have specific questions regarding employment eligibility verification for your company or organization.

Under the terms of the settlement, CHW has agreed to pay $257 ,000 in civil penalties as well as $1,000 in back pay to the charging party. The OSC reported that this is largest amount of civil penalties ever paid to resolve such allegations. Nor do the fines and the potential for additional back-pay end there. As part of the agreement, CHW has also agreed to complete a review (conducted by employees who are independent of the routine I-9 process) of I-9s for all non-US citizens and naturalized citizens hired at all CHW hospitals and medical centers to identify each instance of over-documentation and whether employees suffered lost wages due to the document abuse. CHW agreed to issue progress reports on the review every 60 days and to provide back pay to make whole any employees who suffered lost wages as a result of document abuse within 10 days of the report. CHW also agreed to provide to OSC full documentation relating to the review as well as a final report to be reviewed by OSC to determine whether CHW was in full compliance. CHW also agreed to implement a detailed system-wide written policy describing nondiscriminatory employment eligibility verification procedures and to conduct I-9 training with annual updates.

Such actions by OSC against employers—including Universities and Hospitals—are not new. As the US Immigration and Customs Enforcement (ICE) has stepped up I-9 audits, so has OSC increased enforcement of antidiscrimination rules as they relate to the I-9 process. As previously reported, for example, OSC recently filed suit alleging that John Jay College (“John Jay”) discriminated against non-US citizens by requiring them to provide more documentation of work authorization than is required for the purposes of the Form I-9. That lawsuit alleges that John Jay engaged in a pattern and practice of discrimination, as at least 103 other people were also required to provide documentation beyond what was required and it seeks penalties of $1100 for each individual, in addition to compensation for each person who was impacted by the alleged discriminatory practice. Indeed, as we discussed previously,  OSC also entered into an agreement with United States Citizenship and Immigration Services (“USCIS”) to share E-Verify information. Specifically, under the agreement, the USCIS will share data obtained from queries run through E-Verify with OSC, which will allow OSC to identify potential violations of the anti-discrimination provisions of the Immigration and Nationality Act. USCIS will also provide employer information to OSC, as necessary, when employers have engaged in potential misuse or abuse of E-Verify.

In light of these recent OSC enforcement actions, and the recent information sharing agreement, it is clear that the issue of discrimination in employment verification is a focus of both USCIS and DOJ. Employers should discuss I-9 compliance with experienced legal counsel and take all steps to ensure that employees responsible for I-9 completion are aware of the anti-discrimination provisions of the Immigration and Nationality Act. These steps include not only training employees on the “nuts and bolts” of these processes, but also training related to potential discrimination claims.

For more information, contact Elise Fialkowski at Efialkowski@klaskolaw.com

ICE announced that since January 2009, it has conducted I-9 audits of more than 3,200 US employers, more than ever before. By comparison, in fiscal year 2009—itself a banner year for I-9 audits–ICE conducted approximately 1400 audits. The audits conducted since January 2009 also resulted in record breaking penalties–ICE debarred 225 companies and individuals from doing business with the federal government and imposed approximately $50 million in sanctions for worksite enforcement violations. The increase in audits and sanctions is dramatic–ICE explained that the figures for just this year are higher than the total amount of audits and debarments for the entire Bush administration.

ICE also actively pursued criminal enforcement of employers–in fiscal year 2010, ICE charged 180 business owners, employers, managers, or supervisors with hiring illegal aliens, up from 135 in fiscal 2008 and 114 in fiscal 2009.

ICE pledged to continue aggressive enforcement against employers stating “enforcing worksite laws not only promotes fairness in the workplace, but it also substantially reduces the incentive for aliens to enter the United States illegally.”

These record breaking numbers reflect implementation of a new worksite enforcement strategy first announced by the Obama administration in April 2009. Rather than large scale raids, the new focus is on employers. As part of this strategy, ICE identified I-9 audits as an important administrative tool in building criminal cases, issuing civil penalties such as fines and bringing employers into compliance with the law. Not only will ICE use traditional criminal enforcement methods, but the guidance to the field emphasizes that administrative tools will be used “to advance criminal cases, and in the absence of criminal charges, to support the imposition of civil fines and other available penalties.” Indeed, the guidance makes clear that the “the most important administrative tool is the Notice of Inspection (NOI) and the resulting Form I-9 audit” as it will not only support the imposition of civil fines and other available penalties, but it “will often serve as an important first step in the criminal investigation and prosecution of employers.”

Consistent with this use of I-9 audits as the key administrative tool, ICE announced a nationwide initiative to audit employers’ Form I-9 employment eligibility verification records. As part of this initiative, in the first week of July 2009 alone, ICE issued Notices of Inspection (NOI) to over 650 employers across the country. In comparison, only 503 Notices of Inspection were issued in all of fiscal year 2008. As explained in earlier postings, ICE continued such widespread audits throughout the year, ultimately resulting in over 3200 audits. This widespread enforcement initiative is much different than any in the past. In the past, initiatives often focused on the most likely offenders—employers in industries such as meat-packing, construction, landscaping and manufacturing—commonly believed to regularly hire unauthorized workers. While these businesses were included within the I-9 audits, the reach was much broader to include a wide variety of businesses throughout the entire country. The message is clear—no employer is safe from an I-9 audit and investigation.

In order to avoid potential liability, employers are well advised to develop and implement detailed I-9 policies and practices. ICE recommends that employers, at a minimum, establish an internal training program, with annual updates, on how to manage completion of Form I-9 and how to detect fraudulent use of documents in the I-9 process; permit the I-9 and any E-Verify process to be conducted only by individuals who have received training; and include a review of the completed I-9 and documents by a second person as part of each employee’s verification to minimize the potential for a single individual to subvert the process. Regular audits–conducted before ICE comes knocking on the door– are also key to obtain compliance and limit liability.

For more information, contact Elise Fialkowski at Efialkowski@klaskolaw.com

Abercrombie & Fitch used electronic software to complete the I-9 forms and retain the appropriate records as required by the Immigration & Nationality Act.  The audit revealed numerous deficiencies in the I-9 software that the company had selected.  Since the initial investigation, Abercrombie & Fitch has taken steps to cure the deficiencies in its I-9 procedures to ensure that future violations do not occur. 

In its press release about the settlement, Brian M. Moskowitz, special agent in charge of ICE HSI for Ohio and Michigan, stated that, “Employers are responsible not only for the people they hire but also for the internal systems they choose to utilize to manage their employment process and those systems must result in effective compliance…We are pleased to see Abercrombie working diligently to complete the implementation of an effective compliance system; however, we know that there are other companies who are not doing so. This settlement should serve as a warning to other companies that may not yet take the employment verification process seriously or provide it the attention it warrants.”  The I-9 regulations provide that if the employer uses an electronic I-9 system and that system does not meet the standards for data capture and record-keeping, ICE may invalidate the I-9s, leaving employers like Abercrombie vulnerable to expansive fines.

Klasko reminds employers that selecting an appropriate software platform is essential for those companies making the transition to electronic completion and storage of the Form I-9.  If an employer chooses to move to an electronic I-9 compliance system, the software must meet certain standards to capture the required data and retain the same content as the paper I-9.  Your Klasko Law attorney is integral in both sending requests for proposals to electronic I-9 vendors and determining whether all of the elements of the paper I-9 are present in the software platform.  For more information, visit our Worksite Compliance website and contact your Klasko Law attorney.

One tool for administering a corporate immigration policy is to request that applicants confirm, early in the screening process, whether they will require immigration sponsorship.  Because applicants who are US citizens, permanent residents, asylees, refugees, and temporary residents under the 1986 amnesty law are protected from citizenship status discrimination, some employers believe that any pre-hire inquiry into immigration status is prohibited, even where the job applicant does not fall into one of those categories.

In an exchange of correspondence posted to his blog, attorney Angelo Papparelli recently received guidance from the Office of Special Counsel at the Justice Department, which is responsible for enforcing the anti-discrimination provisions.  He  requested guidance from OSC about how an employer could determine whether job applicants presenting employment authorization documents were only authorized to work because of a pending application for adjustment of status.  Such job applicants will only be able to continue their employment authorization if their application for permanent residence continues, and may need to present evidence to USCIS of their change in job.

OSC clarified that because temporary visa holders and applicants for adjustment of status to permanent residence are not protected from citizenship status discrimination, “an employment decision made exclusively on the basis of an individual’s status as a temporary visa holder or as an applicant for adjustment of status to permanent residence would not run afoul of the anti-discrimination provision.”  Employers can, therefore, feel free to make decisions about whether or not to hire an applicant who is a temporary visa holder or an applicant for adjustment of status in accordance with their corporate immigration policy.

OSC also provided guidance on the kinds of inquiry an employer wishing to discover information about an applicant’s immigration status may ask prior to making a hiring decision.  OSC approved use of a somewhat complicated question, albeit one which makes clear what information the employer is requesting about an employee’s need for future visa sponsorship.  OSC approved the following two questions for inclusion on job applications, so long as they are asked of all job applicants:

1.  Are you legally authorized to work in the United States?   _____ Yes _____ No

For purposes of the following question “sponsorship for an immigration-related employment benefit” means “an H-1B visa petition, an O-1 visa petition, an E-3 visa petition, TN status and ‘job flexibility benefits’ (also known as I-140 portability or adjustment of status portability) for long-delayed adjustment of status applications that have been pending for 180 days or longer.”  (Please ask us if you are uncertain whether you may need immigration sponsorship or desire clarification.)

2.  Will you now or in the future require “sponsorship for an immigration-related employment benefit?”  _____ Yes _____ No

This guidance is particularly helpful for employers conducting job searches for technically trained personnel, many of whom may have initiated the permanent residence process with other employers.  If you need further guidance on particular situations, please feel free to contact your Klasko, Rulon, Stock & Seltzer, LLP attorney.

According to ICE, Kramer hired undocumented workers, gave those workers the names of former employees, and then paid the undocumented workers with checks in the names of the former employees. U.S. District Court Judge Darnell C. Jones, II, ordered Kramer to pay a $75,000 fine to be paid with personal, not corporate, funds. Judge Jones also ordered Kramer to perform, at the Court’s direction, community service.

Increased investigations and I-9 audits, coupled with ICE’s prerogative to collect civil penalties from employers and individuals, necessitate the maintenance of organized I-9 files.

For more information on worksite compliance, ICE enforcement actions, and how these developments impact your business please visit our website www.worksite-compliance.com or consult with a Klasko Law attorney.

Employers around the country should expect ICE to issue more NOIs throughout 2010. As ICE explained, in 2009 it “implemented a new, comprehensive strategy to reduce the demand for illegal employment and protect employment opportunities for the nation’s lawful workforce. Under this strategy, ICE is focusing its resources on the auditing and investigation of employers suspected of cultivating illegal workplaces by knowingly employing illegal workers.”

Klasko reminds employers that it is critical to keep accurate I-9 records. Form I-9 requires employers to determine the employment authorization of hires by reviewing and recording the employee’s identity documents and determining whether the documents reasonably appear to be genuine and related to the individual. Employers are required to maintain an original Form I-9 and supporting documentation for all current employees. Employers also must retain an I-9 file for at least 3 years from the employee’s hire date, or 1 year after the employee’s termination date, whichever is longer.

For more information on worksite enforcement issues, please visit our website at: http://www.worksite-compliance.com.

A complete description of the inspection and fine process, after the jump.

Employers are required to maintain an original Form I-9 and supporting documentation for all current employees. Employers also must retain an I-9 file for at least 3 years from the employee’s hire date, or 1 year after the employee’s termination date, whichever is longer. With ICE’s focus on worksite enforcement, it is more important than ever for companies to properly maintain their I-9 files. Employers should review current I-9 practices and conduct an internal audit of their I-9 files for employees.

The I-9 inspection process starts with ICE issuing a Notice of Inspection, which compels an employer to produce its I-9 files, along with other documentation such as payroll records, lists of employees, and business licenses. Since ICE normally allows only 3 days for an employer to produce these documents, the employer must have its I-9 files ready for inspection. After ICE reviews the files, it notifies the employer of any technical or procedural violations. For example, ICE can give notice that it suspects certain employees are unauthorized to work, and employers are given time to submit additional evidence. ICE may alert the employer that it can’t determine an employee’s eligibility to work, and the employee is given time to submit evidence of his work authorization. The employer also may have committed technical violations when completing its files.

If a review of the I-9 files reveals that the employer has violated the I-9 regulations, but ICE expects compliance in the future from the employer, ICE may simply issue a warning to the employer without assessing any civil monetary penalties. If there is a serious I-9 violation, a pattern of noncompliance, or the employer fails to correct its I-9 files during an audit, ICE can issue a Notice of Intent to Fine (NIF) to the employer.

Fines assessed through an I-9 audit can be significant, depending on the type of violations listed in the NIF. Under the new penalty schedule, fines range from $375 to $14,050 if the employer is charged with knowingly hiring undocumented workers. The fines are calculated by determining the percentage of known unauthorized workers in the employer’s overall workforce.  The fines can increase if the employer is a 2^nd or 3^rd time violator. If the employer commits a substantive violation, such as failing to keep adequate I-9 records, fines range from $110 to $1,100. The fines are calculated by determining the percentage of substantive I-9 verification violations by the employer, and these fines can increase too if the employer is a 2^nd or 3^rd time violator. ICE also can increase or decrease the fines based on the employer’s size, good faith, and history of compliance or noncompliance. ICE may even prosecute criminally if the violations are substantial.

Once the NIF is served on the employer, it only has 30 days to negotiate with ICE and either enter into a settlement agreement, or request a hearing before the Office of the Chief Administrative Hearing Officer (OCAHO) of the Department of Justice. The government will negotiate with employers on the fines through a settlement process, and immigration counsel can be invaluable during the negotiation process to mitigate fines and help show the employer’s good faith compliance for the future through the implementation of internal I-9 procedures. If the employer fails to take action after receiving the NIF, ICE will issue a final order and the employer will have to pay the fines. If the employer has requested a hearing, the case will be assigned to an Administrative Law Judge for a hearing on whether the employer committed a violation and whether the civil penalties were allowable.

Increased I-9 audits coupled with ICE’s prerogative to collect civil penalties from employers necessitate the maintenance of organized I-9 files. For more information on worksite compliance, ICE enforcement actions, and how these developments impact your business please visit our website www.worksite-compliance.com or consult with a Klasko Law attorney.

The memo reiterates the announcements made earlier this year by Obama Administration officials regarding this focus on employers as the primary means for deterring illegal immigration to the U.S.   In July, DHS Secretary Janet Napolitano went on record with her promise to audit employers to ensure their compliance with immigration regulations.  Likewise, ICE Secretary John Morton has publicly stated that ICE will continue to crackdown on employers who hire unauthorized workers.  These announcements were followed by the issuance of hundreds of Notices of Inspection to employers around the country.

In this era of enforcement it is critical for employers to avoid immigration related liabilities due to non-compliance with federal immigration regulations by reviewing their internal policies and procedures.  Internal I-9 audits can identify issues and correct violations.  Training of human resources personnel on all aspects of immigration compliance will ensure that companies establish proper record-keeping procedures.  These important steps can limit a company’s liability in case of government inspection. 

For more information on I-9 compliance please visit our website www.worksite-compliance.com