E-Verify & I-9 News

[Editor’s Note: today’s post is brought to you by guest blogger John Manley, U.S. Immigration Attorney and Co-Liaison to U.S. Customs and Border Protection.]

U.S. District Judge Thomas J. Whelan has ordered The French Gourmet, Inc. to forfeit $109,200 in illicit proceeds gained from the illegal hiring practices and pay $277,375 for its felony conviction of employing more than 10 illegal alien workers in a 12-month period.

This case has gained considerable attention and is a reminder to employers to make sure they have a proper I-9 Compliance Program.

In this case, the French Gourmet operated a restaurant, bakery and catering business for decades in La Jolla. All three defendants pleaded guilty in October to having hired numerous illegal alien workers between 2005 and 2008, and continued to employ the unauthorized workers knowing the aliens did not have legal authority to work in the United States. The defendants further admitted to hiring and employing illegal alien workers continuously as early as 2003, despite being fined in the 1990s by the former Immigration and Naturalization Service (INS) for employing illegal aliens. The pattern of illegal activity continued until May 2008 when agents from HSI searched the restaurant and arrested 18 illegal alien workers. The company admitted they repeatedly rehired illegal alien workers, even after the company received “no-match” letters from the Social Security Administration advising employees’ names did not match the Social Security numbers reported by the company on its tax returns. Source: ICE

These are heavy fines for a small business to pay. It would not surprise me if the company filed some sort of bankruptcy petition after this. ICE, however, can and will go after companies. Companies should consult with immigration lawyers to to ensure proper I-9 compliance.

According to ICE, “criminal prosecutions are just one of many tools ICE HSI uses to reduce the demand for illegal employment and protect job opportunities for the nation’s lawful workforce. That enforcement strategy also includes the expanded use of civil penalties, employer audits and debarment. In fiscal year 2011, ICE criminally charged a record-breaking 221 owners, employers, managers and/or supervisors – up from 196 in fiscal year 2010. In addition, during fiscal year 2011, ICE HSI initiated audits involving 2,496 employers nationwide – surpassing the record number conducted in all of fiscal year 2010. That figure includes 83 businesses in the San Diego area. Likewise in fiscal year 2011, ICE issued 385 final fine notices totaling more than $10 million to employers across the country, again surpassing the record fine total in fiscal year 2010.”

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post features guest blogger Angelo Paparelli, Partner and Certified Immigration Law Specialist (CA) at Seyfarth Shaw, LLP.]

Angelo Paparelli talks about how companies can best prepare for an ICE audit of their Form I-9s, by converting paper i9s to an electronic system (like Tracker I-9) and consulting a law firm with I-9 expertise, such as Seyfarth Shaw, LLP, to do a preliminary audit to fix any problems. Visit Angelo’s blog, Nation of Immigrators.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post was written by guest blogger Bruce Buchanan, partner-in-charge of Immigration Practice, King & Ballow, LLP.]

A recent Office of Chief Administrative Hearing Officer (OCAHO) decision, U.S. v. Alyn Industries d/b/a Electronic Source Company, 10 OCAHO No. 1141 (2011), demonstrates continuing evidence of differences between Immigration & Customs Enforcement (ICE) and OCAHO in the calculation of fines from ICE audits.

In Alyn Industries, the company disputed ICE’s calculation of fines due. The company conceded it violated the Immigration Reform and Control Act of 1986 by: (1) hiring two employees without preparing an I-9 form; (2) hiring 59 employees without properly completing Section 2 of the I-9 form; and (3) hiring one employee without ensuring the employee properly completed Section 1 of the I-9 form.

ICE sought a total of $63,767 for the 62 violations. ICE calculated the fine by determining 100% of the I-9s contained substantive errors. Thus, under ICE’s Guide to Civil Monetary Penalties, Alyn was assessed the highest amount for a first offense – $935 per violation. The Guide has the following sliding scale:

Percentage of Substantive Violations            Fine

0 – 9%                                                                                       $110
10 -19%                                                                                   $275
20 – 29%                                                                                 $440
30 – 39%                                                                                 $605
40 – 49%                                                                                 $770
50% and Over                                                                       $935

[Editor's note: for more details on fines, see ICE's Form I-9 Inspection Overview.]

Additionally, there are five aggravating or mitigating factors, each worth 5%. The five factors are: size of business, good faith, seriousness of violations, whether any employees were unauthorized, and history of previous violations.

ICE determined 10% should be added to $935 due to the company’s lack of good faith and seriousness of the violations. Thus, $935 + 10% = $1,028.50 x 62 violations = $63,767. Alyn challenged ICE’s determination of aggravating and mitigating factors, asserting it was a small business that acted in good faith and had no previous violations. Thus, it asserted the fine per violation should be reduced by 15%.

Alyn asserted it was a small business because it employed 62 employees in July 2009, the time of the I-9 audit, and was down to 50 employees in December 2010. Moreover, it had a net loss of about $271,000 in 2010 and net income of only about $78,000 in 2009. ICE argued Alyn was a moderate sized business, which should not be the basis of an aggravating or mitigating factor.

OCAHO found Alyn was a small business since prior case law defined companies with less than 100 employees to be a small business. However, OCAHO declined to use the size as a mitigating factor, because it was not a “failing ‘mom and pop’ operation.”

ICE argued Alyn’s tenure as a business for over 10 years with revenue in the millions demonstrated it should have been able to train its management on verifying employment eligibility and its 100% failure rate showed its lack of good faith. Alyn asserted the errors were based on carelessness and after the I-9 audit, it enrolled in E-Verify and “instituted stringent compliance checks.” OCAHO was not persuaded by either party that good faith or lack thereof was an aggravating or mitigating factor.

Concerning the seriousness of the violations, OCAHO found all but two of the 62 violations were serious. However, OCAHO declined to use such as an aggravating factor.

Alyn argued because it did not have a history of previous violations, it should receive a mitigating factor. OCAHO found “never having violated the law does not necessarily warrant” leniency. Thus, this factor did not change the amount of the fine.

Despite not finding Alyn should receive any reduction in the amount of fines due to any mitigating factors, OCAHO concluded… [A]s a matter of discretion, a penalty nearer the mid-range are found more appropriate… and the penalties are accordingly set at $700 each for the 60 most serious violations and $500 each for the other two violations, for a total penalty of $43,000.

Although OCAHO denied this was a similar case to U.S. v. Snack Attack Deli (Subway), 10 OCAHO No. 1137 (2010), where OCAHO determined the company could not afford the fine sought by ICE, the result is eerily similar. In Snack Attack, OCAHO lowered the fines from $110,000 to $27,150 without any reasoned analysis.

The Alyn decision demonstrates OCAHO will continue to assert its discretion in determining the penalties and will not feel bound by ICE’s Guide in this determination.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, partner-in-charge of Immigration Practice, King & Ballow, LLP.]

The U.S. Immigration and Customs Enforcement (ICE) issued Notices of Inspection (NOIs) to a number of employers on November 4, 2011. ICE will not release the number of NOIs, though it is believed to be about 500, or the names and locations of the businesses served with NOIs.

If your business was not targeted, count yourself lucky. If your business is served with a NOI, what should you do and what will happen during the inspection/investigation? Having represented clients in several ICE audits in past few years, here are my thoughts and insights.

The NOI, which begins the ICE audit, is hand-delivered by an ICE agent of Homeland Security Inspections (HSI) to the business with a demand to inspect the I-9 records plus other employment-related records, such as payroll records, Social Security no-match letters, and a list of related companies. An employer has three days to comply with the NOI and should never provide the requested records upon initial receipt of the NOI. Sometimes ICE is willing to provide more than three days, if requested. An employer should contact their immigration counsel immediately upon being served with a NOI.

During the period between the delivery of the NOI and the deadline to provide the I-9s and other records, the employer and immigration counsel have the opportunity to determine if all of the employees’ I-9s are in order and, if not, make any necessary corrections/additions plus determine whether all employees have proper work authorization. During these three days, the employer’s HR manager (or whoever is in charge of immigration compliance for the employer) and immigration counsel will be spending a lot of time together. You should delegate the gathering of non-I-9 related records to another management official besides the one in charge of I-9s.

ICE will then return to the employer’s facility and remove the I-9s and related records or the employer and counsel must hand-deliver them to the local ICE office. (Employers should always make copies of the I-9s before providing ICE with the original I-9s.) At this point, the I-9s are sent to an ICE auditor.

Following the audit, which may take 2 to 18 months, ICE will provide a Notice of Suspect Documents, if applicable. This notice lists the names of all employees who could not be authenticated as having valid work authorization. At this point, the employer must give notice, in writing or verbal, to each affected employee and provide him or her with an opportunity to correct any mistakes, provide proper work authorization documents, or assert ICE made a mistake. The employer then provides such documents or assertions to ICE for their review. If an affected employee does not comply, the employer should terminate the employee.

Moreover, if the employer terminates the affected employees after providing notice and an opportunity to provide new documentation, an employer will not be subject to any fines or penalties for knowingly employing unauthorized workers – unless ICE discovers other evidence that the employer was aware of the affected employee’s illegal status. The fact that the employer hired an illegal alien, who provided a false A number, permanent resident card, work authorization document or Social Security number, is insufficient to prove the employer knowingly hired any illegal aliens.

Thereafter, ICE will provide the employer with a Notice of Technical or Procedural Failures and the underlying I-9s that have such errors. The employer has 10 days to correct the technical errors. If they are correctable and corrected, ICE will not issue any fines for these violations.

The final step in the audit is a “Notice of Intent to Fine” for substantive and uncorrected technical violations and/or for “knowingly employing” illegal aliens. Additionally, “knowingly employing” illegal aliens’ charges carry possible criminal indictments. An employer has 30 days to agree to pay the fines, reach a resolution on the amount of the fines or challenge the determination before the Office of Chief Administrative Hearing Officer (OCAHO).

Before ICE comes knocking at your door, your business should develop an immigration compliance program, which includes a self-audit of your I-9s, training for applicable management, draft and implement immigration compliance policies, including whether to use E-Verify.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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“U.S. Immigration and Customs Enforcement (ICE) issued Notices of Inspection (NOIs) to various employers on Friday, Nov. 4. These inspections are designed to determine whether or not the businesses are violating U.S. employment laws by hiring unauthorized workers. The names and locations of the businesses will not be released at this time due to the ongoing nature of the inspections,” according to a statement released by the ICE public affairs department today.

So how can you best prepare for a potential ICE audit?

First, companies should consider conducting a preemptive internal audit to get your I-9 house in order. Then analyze your results, initiate targeted training, and standardize your I-9 practices and procedures.

As you will probably find out, the paper Form I-9 process is error-prone and hard to centralize. Therefore, after conducting the internal audit you will want to implement a trustworthy electronic management system to keep track of all the I-9 documents, deadlines, and work visa reverification requirements.

These steps are especially important for companies that have a large number of employees, high turnover rates, and/or multiple worksites. Of course, employers should always consider the need for involving informed counsel on your employment and immigration issues.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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On November 4, U.S. Immigration and Customs Enforcement (ICE) announced that seven major employers in the U.S. joined IMAGE, the agency’s voluntary employment compliance program. These newly joined employers include Best Western International, Chick-fil-A, Inc., Hyatt, Kelly Services, Lexmark, Smoothie King and Toyota Motor Engineering and Manufacturing North America.

Here is a complete list of IMAGE partners.

IMAGE stands for “ICE Mutual Agreement between Government and Employers,” created to promote voluntary compliance and help companies ensure they are maintaining a lawful workforce.

To participate in IMAGE, companies volunteer to enroll in E-Verify, to follow written hiring policies that enforce I-9 compliance, and to engage in annual self-audits.  Furthermore, IMAGE companies agree to submit to an ICE audit of their I-9 employment eligibility forms. In return, ICE agrees to:

• Waive potential fines if substantive violations are discovered on fewer than 50 percent of the required Forms I-9.
• In instances where more than 50 percent of the Forms I-9 contain substantive violations, ICE will mitigate fines or issue fines at the statutory minimum of $110 per violation.
• ICE will not conduct another Form I-9 inspection of the company for a two-year period.
• ICE will provide information and training before, during and after inspection.

According to the ICE website, the idea behind the IMAGE program is for employers “to place an emphasis on self-policing in a company’s hiring practices. By following the prescribed steps of IMAGE, a company could lessen the likelihood of being found in violation of employment laws. IMAGE participation may be considered a mitigating factor in the determination of civil penalty (fine) amounts should they be levied. In addition, IMAGE membership can enhance your corporate image by associating your company with sound hiring practices, and helps to secure the homeland by reducing opportunities to inadvertently hire unauthorized workers.”

Clearly, participating in the IMAGE program is a significant commitment that carries real ongoing costs (annual internal audits, training) and potential costs (Form I-9 fines). While ICE has made an effort to “soften” the risk of being fined based on the Form I-9 inspection result, the fact that IMAGE is not offered as a safe harbor is one of the primary reasons employers are reluctant to participate in the program. For all of these reason, employers should consult with legal counsel before making a decision to enroll.

In light of some of the most recent ICE worksite enforcement statistics announced in October (see below), now more than ever employers should  consider strengthening their corporate employment eligibility verification compliance program.

In FY 2011, ICE:

• Conducted 2,496 I-9 audits, up from 503 in FY 2008
• Initiated 3,291 worksite enforcement cases, up from 1,191 in FY 2008
• Criminally arrested 221 employers, up from 135 in FY 2008
• Issued 385 Final Orders for $10,463,987 in fines, up from 18 Final Orders for $675,209 in fines in FY 2008
• Debarred 115 individuals and 97 businesses, compared to zero debarments in FY 2008

For more information on the IMAGE program, please visit: http://www.ice.gov/image/faqs.htm.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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A $50,760 settlement by the DoJ against Brand Energy and Industrial Services and its subsidiary, Industrial Services LLC (ISI), a Louisiana company, proves the need for careful understanding of and adherence to Form I-9 documentation rules and best practices.  According to their press release, Justice Department Settles Allegations of Employment Discrimination by Louisiana Industrial Services Company, the settlement resolved “allegations that ISI  engaged in a pattern or practice of discrimination against non-citizens in the hiring and employment eligibility verification process.”

This case involved the company’s termination of an employee–who was an immigrant authorized to work in the U.S.–after he could not comply with ISI’s request to provide specific employment eligibility documents, a request that went beyond what’s  required by law. According to the press release, the DoJ found that one of ISI’s offices would only accept documentation issued by the Department of Homeland Security from non-immigrants for the purpose of verifying employment authorization, whereas U.S. citizens and other non-immigrant employees were not asked to produce specific I-9 documentation.

The Immigration and Nationality Act’s (INA’s)  prohibits employers from discriminating against work-authorized employees during the hiring and employment eligibility verification process. When completing a Form I-9, the rules clearly state that “Employers are not permitted to request more or different documents than are required or to refuse to honor documents tendered that reasonably appear to be genuine and to relate to the individual presenting the document.”

The United States Citizenship and Immigration Services (USCIS) publishes The Handbook for Employers, Instructions for Completing Form I-9 (Rev. 06/01/2011), also known as the M-274, to provide guidance to employers on how to complete the Form I-9 . All HR staff or managers who complete I-9s should, at a minimum, familiarize themselves with this handbook. The handbook’s instructions for completing Section 2, as well as the instructions on the I-9 form itself, describe which List A or List B and C document combinations are acceptable. Of course, it’s always a good idea to consider consulting with an immigration attorney to make sure your I-9 processes and procedures are in compliance, especially when facing uncommon or unfamiliar employment eligibility documents. Using a good electronic I-9 system can also help prevent accidental over-documentation. A well-designed electronic I-9 system can provide automatic selections that ‘force’ proper Section 2 documentation choices, and lock in ONLY appropriate issuing authorities and documentation combinations.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

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As a result of ICE’s worksite enforcement strategy,14 employers in New England have been fined this fiscal year for various violations, including failure to comply with Form I-9 rules, that enabled the companies to hire illegal aliens.

According to the ICE press release, Fines in the New England region include:

• A $118,000 settlement from Jasper Wyman & Son in Milbridge, Maine
• A a $100,000 fine of Commercial Cleaning Service of Allston, Massachusetts
• A $22,792 fine paid by D’Agostino Associates, Inc., in Newton, Massachusetts

“Nationally, from fiscal year 2009 to date, ICE has initiated Form I-9 inspections against nearly 4,000 businesses resulting in fines of nearly $7 million,” the ICE report says.

“These settlements serve as a reminder to employers that ICE will continue to hold them accountable for hiring and maintaining a legal and compliant workforce,” said Bruce M. Foucart, special agent in charge of ICE HSI in Boston. “We encourage companies to take the employment verification process seriously.”

In announcing this fine, ICE reminded employers that they have implemented a new, comprehensive strategy to reduce the demand for unauthorized employment by focusing their resources on auditing and investigating employers who are suspected of cultivating and hiring undocumented workers. In addition, ICE has also been increasing the number of random Form I-9 audits on all employers, regardless of size or industry. For more information on these initiatives, please browse our blog posts on ICE enforcement.

Foucart also added that ICE continues to promote its IMAGE program as a way for employers to work towards a legal, compliant workforce. As a brief overview for those of you who are not familiar with program, IMAGE is a voluntary initiative that aims to reduce unauthorized employment and minimize I-9 compliance vulnerabilities for participating businesses.  In exchange for receiving training on hiring practices, fraudulent document detection, use of the E-Verify employment eligibility verification program, and anti-discrimination procedures, participants must agree to an I-9 audit conducted by ICE and enroll in E-Verify, amongst other conditions.  Upon enrollment in and commitment to IMAGE Best Employment Practices, program members will be deemed “IMAGE certified.” For more detailed information about IMAGE, please visit ICE’s website.

The U.S. Immigration and Customs Enforcement (“ICE”) has issued yet another round of I-9 inspection notices to as many as 1,000 businesses located throughout the United States. Initially reported by the Associated Press, this announcement is another clear example of what has widely come to be known as the current administration’s “quiet immigration raid” policy. Instead of the high-profile immigration raids of years past, ICE has been focusing more on more on targeting employers (to the tune of 1000s) through the use of Form I-9 audits and investigations of their hiring practices.

Although ICE declined to name specific companies to be included in this round of audits, the AP is reporting that according to an ICE statement, “The inspections will touch on employers of all sizes and in every state in the nation, with an emphasis on businesses related to critical infrastructure and key resources.” You can read this Wall Street Journal article for additional insight here.

Recent I-9 Audits Numbers: The Trend is Clear

According to various reports, this latest batch of  inspections will bring the total number of ICE I-9 audits to 2,338 so far for this fiscal year, which already exceeds ICE’s record-breaking I-9 audit total of 2,196 from fiscal 2010 where average audit fines exceeded $110,000.

Recently, we attended a workforce symposium in the San Francisco Bay Area where representatives from ICE, the Department of Labor, and the Department of Justice all spoke about their agency’s efforts to determine whether businesses are violating U.S. employment laws by hiring unauthorized workers and what step their respective departments are taking to discourage such hiring practices. The ICE agent stated that I-9 audits are the key ICE initiative on this front. The agent also warned that one of the agency’s enforcement goals was to have the resources in place to handle 10,000 annual I-9 audits by the beginning of next year. Given ICE’s current pace, this goal seems achievable.

So how can you best prepare for a potential ICE audit?

First, companies should consider conducting a preemptive internal audit to get your I-9 house in order. Then analyze your results, initiate targeted training, and standardize your I-9 practices and procedures.

As you will probably find out, the paper Form I-9 process is error-prone and hard to centralize. Therefore, after conducting the internal audit you will want to implement a trustworthy I-9 software system to keep track of all the I-9 documents, deadlines, and work visa reverification requirements.

These steps are especially important for companies that have a large number of employees, high turnover rates, and/or multiple worksites. Of course, employers should always consider the need for involving informed counsel on your employment and immigration issues.

I-9 Auditing Overview

Over the past year, we published several articles on the I-9 audit process, including potential fines. For your convenience, here are links to these various resources.

• DHS announces 1,000 new I-9 audits nationwide (February 2011)
• DHS memo sets out new I-9 enforcement strategy
• Anatomy of an I-9 Subpoena
• DHS releases I-9 penalty schedule and overview of inspection process
• The New I-9 Audit: A “Quiet” Immigration Raid

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.

Today, the Governor of Georgia, Nathan Deal, signed into law a stringent immigration bill making the “Peach State” the latest to join the ever growing list of states that mandate E-Verify participation for private companies. The law also expands police powers to investigate the immigration status of certain suspects, penalizes people who transport or harbor illegal immigrants, and makes it a felony to use fake identification to get a job, amongst other immigration and related enforcement measures.

Full details of the new law can be found on the Georgia legislature web site.

You can also read the Governor’s Office official press release here.

Several years ago, Georgia enacted legislation requiring all state contractors and subcontractors use E-Verify. With today’s signing, Georgia’s new Illegal Immigration Reform and Enforcement Act of 2011 (also known as HB 87) widely expands the state’s E-Verify requirement, making it mandatory for many private businesses through a phased in approach. As of Jan. 1, 2012, private employers in Georgia with 500 or more employees must E-Verify newly hired full-time employees. Businesses with 100 or more employees but fewer than 500 must begin using E-Verify for newly hired full-time employees on or before July 1, 2012. Finally, the E-Verify requirement applies to all private businesses with between 11 and 99 employees starting July 1, 2013. It’s worth noting that businesses with 10 or fewer employees are exempt.

According to the new law, employers will be expected to provide evidence that the company is enrolled with E-Verify or is exempt from the requirement in the form of an affidavit that will be provided by the Attorney General and posted on the Department of Law’s official web site on later than January 1, 2012 . Failure to comply could result in the suspension or denial of a business license, occupational tax certificate, or other document required to operate a business in the state.

Arizona has a similar E-Verify law on the books. A coalition of businesses and immigrant rights groups is suing to stop Arizona’s law, arguing it is unconstitutional. The case is pending before the U.S. Supreme Court.

Disclaimer: The content of this post does not constitute direct legal advice and is designed for informational purposes only. Information provided through this website should never replace the need for involving informed counsel on your employment and immigration issues.

To learn more about how I-9 Compliance Software can help you comply with Form I-9 and E-Verify requirements, click here.