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

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.

USCIS has requested that the Office of Management and Budget approve the continued use of the current Form I-9. While this request is pending, the Form I-9 will not expire.

The Service will update the I-9 when the extension is approved. In the interim, employers will be able to use either the Form I-9 with the new revision date or the Form I-9 with the February 2, 2009 revision date at the bottom of the form.