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.

Morton went on to explain that the businesses that were to receive the NOIs were selected for inspection as a result of investigative leads and intelligence, as well as their connection to public safety and national security. DHS did not release the names and locations of the businesses to be audited due to the ongoing, law enforcement nature of the investigations.

As Klasko Law reported earlier this year, ICE’s main priority in worksite enforcement actions is to target employers who knowingly hire unauthorized aliens in violation of federal law.  An internal ICE memo released to the public through a freedom of information act earlier this year indicated that the agency views worksite enforcement investigations against employers as the best means of targeting and curbing the root causes of illegal immigration.  As such, ICE has made the criminal prosecution of employers who knowingly hire undocumented workers their top priority.  This includes the imposition of criminal charges against owners, corporate managers, supervisors and others in the management structure.

However, as ICE investigations to date have shown, employers who make inadvertent errors on their I-9 forms or in the verification process are held liable by the agency for civil penalties in the event of an audit.  The current focus on investigations and prosecutions is a significant departure from the days of legacy INS when employers could expect a slap on the wrist in the form on minimal fines as just another cost of doing business.  In this era of increased enforcement, employers must proactively preempt immigration related liabilities.  Employers should conduct internal I-9 audits to identify issues and correct violations.  Part and parcel of these reviews should be an evaluation of the employers’ current record keeping practices, to determine if new training programs are needed for HR personnel.  Immigration counsel can be invaluable during these times in developing best practices including establishing protocols for the verification of the identity and work eligibility of new hires, advising employers on safeguards against discrimination in the I-9 process and advising on the use of E-Verify.

In addition, United States Citizenship and Immigration Services and ICE announced that they were launching a new I E-Verify campaign to recognize the 170,000 employers nationwide that have registered for E-Verify.  E-Verify is an internet-based Employment Eligibility Verification System run by USCIS that allows employers to electronically verify the employment eligibility of certain employees. To use E-Verify, an employer enters employee information from the Form I-9 into the web-based system. E-Verify then runs that information against records in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases to confirm whether the employee is authorized to work in the United States.

For more information on worksite compliance, ICE enforcement actions, the E-Verify program 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

Secretary Morton’s comments reiterate the announcement made on July 1 by DHS Secretary Janet Napolitano that the agency would actively audit employers to verify whether their employees were eligible to work. He further confirmed that there are 654 companies currently under investigation ICE and that many more employers will receive Notices of Inspection soon.

Most recently, ICE’s audit of American Apparel, Inc. a clothing manufacturer and retailer made national headlines after the company announced that it would be laying off 1,500 employees following receipt of a Notice of Inspection. The layoffs are estimated to impact 25% of the company’s workforce. American Apparel, Inc. is also likely to face thousands of dollars in penalties for hiring workers who weren’t eligible to be employed. The government has publicly stated that fines against the company may exceed $800 per unauthorized employee. Earlier this year, Krispy Kreme Doughnut Corporation was also fined by ICE for violations of immigration laws following an audit of the company’s I-9s that revealed that the company employed dozens of illegal aliens at one of their doughnut factories in Cincinnati.

With the Obama Administration’s support of increased I-9 enforcement actions, it is clear that employers must pre-empt immigration related liabilities due to non-compliance with federal immigration regulations by being proactive. Internal I-9 audits are invaluable tools for identifying issues and correcting violations. Bringing in experienced immigration counsel to train human resources personnel on all aspects of immigration compliance and establish proper record-keeping procedures can significantly limit exposure and liability.

Employers who receive notices of inspection are advised to contact their immigration counsel as quickly as possible. Generally, these notices only provide three days for the employer to submit their I-9s to ICE for review. This short period of time is critical. Counsel must be contacted as quickly as possible. Employers must gather all of the company’s I-9s and supporting documentation to make sure that it is available to ICE. It is advisable to have counsel review the company’s payroll to identify any discrepancies between the number of employees and the company’s I-9s. All efforts should be made to correct any I-9s with obvious errors. Company representatives responding to the Notice of Investigation should always retain copies of any documentation submitted to ICE. Employers who can demonstrate good-faith efforts to comply with immigration laws are more likely to be assessed lower level civil fines if violations are uncovered.

For more information on government investigations and how I-9 compliance requirements affect your business  please visit our website http://www.worksite-compliance.com.

Special features on the site include:

·         An I-9 Desk Reference Handbook (covering Employee Verification, Employer Sanctions and Anti-discrimination laws)

·         An E-Verify State-by-State Legislation Survey.

The new site is www.worksite-compliance.com.  We hope that you find our new site helpful and informative.

President Obama’s nominee for Assistant Secretary for Immigration and Customs Enforcement (ICE), John Morton, faced a Senate panel for his confirmation hearing this week.  He pledged to continue to prosecute bad-faith employers who hire unauthorized workers. Morton also announced that the Administration intends to eventually make use of the E-Verify, online employment verification program mandatory for all employers.

Although Mr. Morton’s rhetoric is a significant departure from that of the Bush Administration’s focus on prosecuting and deporting unauthorized aliens, it reaffirms the federal government’s intention to continue to scrutinize employers. “We cannot make sustained reductions in illegal immigration without deterring employment of unauthorized labor,” Morton stated. “We need to place renewed focus on employers to ensure that they are playing by the rules.” Mr. Morton also stated his intention to continue to levy civil penalties against employers who violate immigration regulations.

Morton is a career official at the U.S. Department of Justice (DOJ) with lengthy experience in immigration enforcement and criminal prosecution. He currently serves as Acting Deputy Assistant Attorney General of the Criminal Division.

Wednesday’s confirmation hearings demonstrate the seriousness with which the Federal government views worksite enforcement. It is critical for employers to develop I-9 compliance programs and conduct internal audits to ensure compliance with immigration regulations.