E-Verify & I-9 News

[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

The Department of Justice (DOJ) has reached a settlement agreement with Best Packing Services Employment Agency Inc. of Philadelphia, Pennsylvania resolving allegations that the company discriminated under the anti-discrimination provision of the Immigration and Nationality Act (INA), when it impermissibly delayed the start date of two refugees after requiring them to provide specific I-9 documentation.

The refugees alleged they were not allowed to begin employment until they produced unexpired, Department of Homeland Security-issued employment authorization documents, despite the fact that the refugees presented unexpired state identification cards and unrestricted Social Security cards at the time of hire, which were sufficient documentation for employment eligibility verification purposes.

The INA anti-discrimination provision prohibits treating employees differently in the employment eligibility verification and reverification processes based on citizenship status or national origin. Since the department’s investigation revealed that Best Packing allowed U.S. citizens to provide state identification cards and unrestricted Social Security cards and did not demand other specific Form I-9 documentation for U.S. citizens, it was determined that the refugees had been unlawfully discriminated against.

As part of the settlement, Best Packing will provide full back pay to both victims due to each missing several weeks of work. Under the settlement agreement, the company agreed to conform all of its actions to ensure compliance with the INA’s anti-discrimination provision and to train its human resources personnel about the company’s responsibility to avoid discrimination in the employment eligibility verification process.

This settlement is another in a long line of cases where employers are going too far, sometimes unknowingly, in an attempt to verify employment authorization by requiring specific or additional documentation during the Form I-9 process. Remember that in an effort to comply with the INA,  the actions of an overreaching employer may result in a finding of discrimination by the Department of Justice, Office of Special Counsel.

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.

[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

Constructive knowledge is a tricky concept. A basic definition goes something like this: By application of reasonable care or diligence if a person should have known a fact, he or she is deemed to have constructive knowledge of that fact. The legal definition of constructive knowledge has been an ongoing topic for immigration compliance for a number of years. The Office of the Chief Administrative Hearing Officer (OCAHO) has jurisdiction over three types of cases, including those involving allegations of: (1) knowingly hiring or the continued employment of unauthorized workers (2) immigration-related unfair employment practices; and (3) immigration-related document fraud.Recently, OCAHO, in United States v. Associated Painters, Inc., 10 OCAHO No. 1151 (May 30, 2012), provided some guidance as to what does not meet the definition of constructive knowledge.

Associated Painters, Inc. (API) faced two separate inspections by ICE and its predecessor INS in 2009 and 2000, respectively. In the 2000 inspection, INS found 34 employees could not be verified with proper work authorization. As a result, all of the 34 employees left employment with API by November 24, 2000. The company’s president, Rodney Friese, completed an “Attestation of Compliance – Re-verification of Employees” stating the employees no longer worked for API and affirmed “should any of the individuals listed in this Notice seek future employment, I am required to properly complete a Form I-9 with documents other than those indicated on the Notice.”

However, API did rehire three of the 34 employees in October 2004, March 2008, and September 2008. These three employees used the same Social Security numbers from their previous employment. This was contrary to the November 24, 2000 attestation.

On July 1, 2009, ICE conducted an inspection of API and discovered the rehiring of three employees with the previously used Social Security numbers. ICE served a Notice of Intent to Fine and API requested a hearing on the matter.

In response, ICE stated the only issue in need of resolution is whether API hired the three individuals “knowing them to be unauthorized to work.” ICE asserted API had actual and constructive knowledge of the unauthorized status of the three individuals based on Rodney Friese’s actual notice in 2000 and his acknowledgment – “should any of the individuals listed in this Notice seek future employment, I am required to properly complete a Form I-9 with documents other than those indicated on the Notice.”

API provided a statement from Friese asserting that, “because of the company’s decentralized recordkeeping, the lapse of time, and the number of employment applications considered, these hiring errors took place without the oversight and knowledge of the owners and officers of API. . . and the hires actually took place from four to eight years after the Attestation of Compliance was signed in 2000, that the three individuals were hired in two different locations by three different managers, and that the individuals simply slipped through the cracks unknowingly.”

As immigration compliance attorneys are well-aware, the doctrine of constructive knowledge is as clear as mud in OCAHO case law. ICE cited Collins Food International, Inc. v. INS, 948 F.2d 549 (9th Cir. 1991), Mester Manufacturing Co. v. INS, 879 F.2d 561 (9th Cir. 1989) and New El Rey Sausage Co. v. INS, 925 F.2d 1153 (9th Cir. 1991), to support its position that API had constructive knowledge.

The Court in Collins gave clear warning that the constructive knowledge doctrine must be “sparingly applied” in order to preserve congressional intent. Collins emphasized IRCA was “delicately balanced” to prevent the employment of unauthorized aliens while still avoiding discrimination. 948 F.2d at 554-55. Furthermore, too expansive a view of constructive knowledge would risk encouraging employers to avoid liability through discriminatory practices. Id. See also Aramark Facility Services v. Service Employees’ International Union, 530 F.3d 817, 825 (9th Cir. 2008) (constructive knowledge must be narrowly construed and sparingly applied in order to preserve the original congressional intent).

OCAHO disagreed with ICE’s assertion that the decisions in Mester and New El Rey supported a finding of constructive knowledge in the case at bar. According to OCAHO:

Those cases involved employers who continued to employ suspect employees without interruption and without taking any corrective action at all after the employers had received specific notice from INS about the questionable status of the employees. Unlike the employers in those cases, (API) did not continue to employ the individuals on the list without interruption or corrective action after it received notice of the discrepancies in their documents in 2000; either it took prompt action to terminate them or they left after being requested to submit additional documents, but none continued to be employed by API after November 2000. The four to eight year period intervening between 2000 and the rehire of those three individuals readily distinguishes the facts in this case from those in Mester and New El Rey.

OCAHO stated:

What happened during the four to eight years intervening between 2000 and the hiring of the suspect employees is nowhere elaborated. For all that the record reflects, Friese promptly forgot about the Attestation of Compliance and did nothing at all to implement it. On the other hand, for all that the record discloses he took prompt steps to implement the Attestation by issuing directives to all the supervisors and hiring managers and by providing specific training for I-9 preparers every six months. We simply do not know. . . .

Context matters. The totality of the circumstances matters. Inferences are drawn from facts, not from legal syllogisms and not from the air. . . . This record is otherwise devoid of evidence as to any surrounding facts and circumstances from which it may be inferred that Araiza, Ponce, and Ramirez were hired because Friese or others at API failed to exercise reasonable care, abandoned their I-9 responsibilities, elected to look the other way, acted recklessly, or otherwise engaged in culpable conduct. Not only do we not know what Friese did in 2000 to notify the hiring managers, we do not know what the qualifications of those managers were, what training was provided to them, or what their turnover rate was. We know virtually nothing about the circumstances under which the hires took place in 2004 and 2008.

Based upon the record, OCAHO decided there was insufficient evidence to find API acted with “reckless and wanton disregard for the legal consequences of permitting another individual to introduce an unauthorized alien into its workforce.”

This is a significant decision because it provides a threshold for what does not meet the doctrine of constructive knowledge. Furthermore, it certainly shows continuing support that OCAHO will not merely rubber stamp ICE’s Notices of Intent to Fine. Thus, it may be well worth it for companies facing ICE fines to litigate the cases.

[Editor’s Note: today’s post is brought to you by guest blogger Bruce Buchanan, an immigration attorney in the Nashville, TN office of Siskind Susser PC.]

In a continuing trend of higher fines and forfeitures, the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) announced ABC Professional Tree Services Inc. (ABC) had agreed to pay $2 million as forfeited funds to the Department of Homeland Security and adhere to revised immigration compliance procedures in return for the government agreeing not to criminally prosecute the company.

ABC is a Houston-based company that provides right of way vegetation management for electric utilities in more than a dozen states. ICE-HSI agents, in Birmingham, Alabama, began investigating ABC in early 2008 following complaints that a significant portion of the company’s employees were undocumented aliens. In March 2008, agents conducted traffic stops on ABC crews and detained employees, who were determined to be unlawfully present in the United States.

In June 2008, ICE-HSI agents reviewed the I-9 forms and supporting documentation for about 2,500 employees at ABC. The inspection revealed a significant number of employees had presented invalid personal identification documents, such as permanent resident cards, work authorization cards, and driver licenses, at the time of hire. As of the second quarter of 2009, about 30 % of the workforce was determined by ICE to be undocumented workers.

On March 4, 2010, ICE-HSI agents executed a search warrant at ABC’s Houston headquarters seizing employment and personnel records. Additionally, agents detained undocumented workers, who were on site at the headquarters. More undocumented ABC employees were detained during a traffic stop in Birmingham on that same day.

The government’s investigation revealed ABC had ignored federal law for years, by falsely attesting on I-9s that work authorization documents presented by new hires appeared genuine. In addition, for several years, ABC had received “no-match letters” from the Social Security Administration (SSA) and similar information from the company’s payroll processor, both of which indicated employee names and Social Security numbers did not match SSA records. However, the company failed to take corrective measures, resulting in the continued employment of the undocumented aliens.

ABC derived at least $2 million in revenue from the provision of services to electrical utilities with its undocumented workforce from 2006 through 2011. This figure represents the amount of money that ABC agreed to forfeit to the government.

Since September 2008, ABC has used E-Verify to verify the employment eligibility of new hires. Beginning in the fall of 2008, the company also revised its immigration compliance procedures to include new policies concerning the proper completion, retention and auditing of I-9s and for responding to SSA no-match letters. Furthermore, ABC has terminated hundreds of undocumented workers.

Just in 2012, ICE-HSI has fined or agreed to forfeitures at the following companies or business executives in these amounts (only listing those of $100,000 or more): Atrium Companies – $2 million; Advanced Containment Systems Inc. (ACSI) – $2 million; HerbCo – $1 million; Sun Drywall and Stucco, Inc. – $225,000; two executives of LTCI Ltd. – $223,000; and J & J Industrial Supply – $150,000.

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.

Share this with your network:

Department of Homeland Security Secretary Janet Napolitano and ICE Director John Morton revealed that in fiscal year 2010, U.S. Immigration and Customs Enforcement (ICE) enforcement numbers climbed to historic high numbers. This surge included a 500% increase in penalties from worksite enforcement actions, a nearly two-fold increase in I-9 audits (2,200), a record-breaking 180 criminal prosecutions of employers and the debarring of more than 97 businesses (compared to 30 last FY). Average fines exceeded $110,000.

John Morton

ICE Director John Morton said that 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.

“We will continue to enforce the law in a firm, sensible manner,” said Morton.  “And we will do it based on a rational set of priorities–priorities that focus on criminals, unscrupulous employers and those who game the system–priorities that promote public safety, border security and the integrity of our immigration system.”

So, why is this important?
Well, with the current economic climate and views on immigration, these statistics are the clearest example of what people are calling the Obama administration’s “quiet immigration raid” policy. Instead of the high-profile immigration raids of years past, ICE has been focusing less on rounding up illegal workers and more on targeting unscrupulous employers through the use of Form I-9 audits and investigations of their hiring practices.

As we previously reported, ICE released a worksite enforcement memo which details the most common reasons why a company might receive an audit, as well as who can be targeted.  Frequently, ICE investigates companies based upon an employee or public whistleblower complaint.

Employers located in nuclear power facilities, airports and surrounding companies, and companies located in landmark buildings are also going to be targeted. ICE will also pursue high turnover industries, such as retail and food service. Lastly, it’s now possible that the audit happened completely by chance – perhaps simply because of where your company is located.

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 not act upon it without consulting legal counsel as individual situations and facts may vary.

Immigration and Customs Enforcement (ICE) recently confirmed that employers should be provided 10 days to cure technical or procedural paperwork violations following a government I-9 audit.  This reassuring news comes courtesy of the American Immigration Lawyers Association (AILA), which recently met with ICE HQ to discuss I-9 violations amidst the recent flurry of audits and some inconsistent practice at local ICE offices. In response to questions by AILA, ICE confirmed that penalties were still based on INS guidance from the late 1990s, which categorized I-9 errors into two groups: substantive verification failures, which are not subject to the ten-day correction period, and technical or procedural verification failures, which may be corrected. Substantive errors could arise, for example, when the employee fails to sign section 1 or forgets to check one of the boxes indicating his or her citizenship or immigration status. Technical or procedural violations tend to be more benign in nature including, for example, the failure of the employee to enter his or her maiden name, address, or birth date in Section 1 or failure of the employer to provide the title, business name, and business address in Section 2.

It’s important to note, however, that an employer must have made a good faith effort to comply with the I-9 requirements in order to take advantage of the ten-day correction period. So if an employer repeatedly made mistakes in knowing reliance of the 10 day correction period or attempted to correct the errors by back-dating, ICE may very well fine them to the fullest extent.

Assessing whether your I-9 errors are substantive versus technical is a complex process, requiring analysis of various policy memoranda and case law. If you are facing a government audit, it’s always best to consult experienced legal counsel who can advise you on your potential I-9 liability and a prudent course of action.

DHS has filed a lawsuit against a Detroit-area automobile plastics company to recover a $41,360 fine which was assessed following an I-9 audit. According to court documents (made available below), DHS completed the I-9 audit on March 17, 2009, and subsequently issued a Notice of Intent to Fine (NOIF) on March 25, 2009, for failure to complete ninety four (94) Form I-9s. By regulation, the company had 30 days to preserve its right to contest the fine or seek a negotiated settlement, neither of which it chose to do. As a result, the penalty became final and nonreviewable, and DHS filed suit last month. According to documents filed on Monday, the company has until January 11, 2010 to respond.

Yesterday, DHS released an overview of the I-9 inspection process, which includes recommended penalties for noncompliance as well as guidance on how investigators should enhance or mitigate the assessed fine. The recommended penalties are presented in two schedules – one for employers who have knowingly hired or continue to employ unauthorized workers, and another for substantive and uncorrected technical violations on the I-9 form. In both schedules, the range of penalties is determined by dividing the number of violations by the number of employees (violation percentage) and then considering whether it is a first offense, second offense, or a third or more offense.

The substantive/uncorrected technical violation schedule is as follows:

After the “base” fine is determined, investigators can also “enhance” or “mitigate” the recommended fine by 5% for each of five separate factors, which include business size, good faith, seriousness, unauthorized workers, and history. The end results means that fines could be as great as 25% above or below the base recommended penalty.

In addition, DHS has also provided a general roadmap for the I-9 inspection process, including the most common notices that employers will receive. The entire seven-page document is provided below.