Seattle Immigration Lawyer Blog

An article in the Wall Street Journal and another in Packer News report that "in an email" to an unknown source, Immigration Customs and Enforcement (ICE) said it will issue I-9 audit notices to over a 1000 employers as part of its national strategy to get more employers to stop hiring workers without legal employment status. Notices to Inspect will be issued across industries. This should come as no surprise to employers. In my post last month, ICE to Establish I-9 Center and Increase Audits, I mentioned that ICE set up a new I-9 Compliance Center. The Center is in Crystal City, Virginia and will house 15 auditors. It sounds like a drop in the bucket in terms of staffing. ICE reported on January 20, 2011, that "from fiscal year 2009 to date, ICE has initiated Form I-9 inspections against 3,769 businesses across the nation." This still doesn't seem like many employers are audited, but fines can run into the millions of dollars for a single employer. With the new Compliance Center, ICE means business, and no doubt will seek to exceed the annual numbers of audits.

Employers are encouraged to conduct in-house audits with professional assistance BEFORE ICE comes knocking on the door with a three-day notice to turn over I-9s. If an employer has not been using I-9s at all, or lacks an efficient and compliant system, three days is very little time to become compliant. Moreover, an audit can be very stressful for staff, not to mention expensive if counsel is brought in when there is a crisis, given the short notice. In addition, costly mistakes can be made in the process of getting ready to turn documents over to ICE. For example, improperly editing I-9s or throwing out old ones could result in fines.

What's the worst that can happen to an employer in an ICE audit situation? Here is a non-exclusive list of what non-compliant employers can face:
-Employees stop showing up for work
-Some employees might be fired (correctly or wrongfully)
-Financial penalties per technical violation (forms filled out wrong)
-Financial penalties per substantive violation (forms not filled out at all, not signed, not completed, documents not verified, etc.)
-Financial penalties per unauthorized worker knowingly hired
-Criminal sanctions (jail or fines or conditions) for a pattern or practice of knowingly hiring unauthorized workers
-Criminal liability for a range of white collar crimes, document fraud, smuggling, conspiracy, etc., if there is a criminal enterprise involved
-Asset forfeiture
-Shareholder suits
-Bad publicity for the company and/or key executives or managers
-Reduced revenues or business closure
-Discrimination suits by the Department of Justice for improper firing of protected workers
-Lawsuits by competitors for unfair competition

ICE publishes information about past cases, some of which are strictly civil audits while others involve large, complicated criminal enterprises. In an earlier post, Employers Should be Aware of ICE I-9 Audit History, I recommended that employers take a look at ICE's penalty scheme and press releases about past audits and raids.

Many business organizations such as the U.S. Chamber of Commerce and major unions oppose massive audit schemes and mandated use of E-Verify, the government's online database, until at least two things happen: a legalization program and improved data reliability with biometrics in the E-Verify system. A legalization program would put millions of workers' information into the E-Verify database system as part of the legalization process. When coupled with biometrics, the numbers of false positives and negatives would be reduced. RIght now, identity theft and inconsistencies between Social Security information and immigration databases often result in tentative non-matches. Other reasons for inadequate data in the E-Verify system, having nothing to do with immigrants without status, include name changes, a glitch in Social Security having to do with recently naturalized citizens, similar names, and identity theft that isn't limited to immigrant populations. Presently, the number of employers using E-Verify voluntarily is under 15%. However, a number of states have enacted statutes to make E-verify mandatory. Arizona's statute is presently before the U.S. Supreme Court on federal preemption issues. Meanwhile, as ICE steps up its I-9 audits, employers need to be compliant regardless of whether E-Verify is used. The I-9 rules and audit authority have been around since 1986.

A Wall Street Journal article, Crackdown on Illegal Workers Grows, reports that Immigration Customs and Enforcement (ICE) will open a new "Employment Compliance Inspection Center" to handle an increase in I-9 audits of employers of all sizes, including large, major employers. Under the Bush administration, ICE focused on rounding up undocumented workers through surprise raids. By contrast, the Obama administration is conducting stealth, "silent" audits of employer documents. Where false documents or unverified documents are revealed, or no I-9s are prepared at all, employers are liable for paperwork violations as well as "knowingly" hiring unauthorized workers. Undocumented workers discovered during the process are often fired and may be pressured to become witnesses against the employer. Naturally, employers are thought to be the lure for illegal immigration.

Last fiscal year ending September 30, 2010, 2,740 companies were audited by ICE and $7 million in civil fines were levied on businesses that employed illegal workers. This represents a substantial increase than in past years. Now ICE really means business as it ramps up its operations even more.

To help employers, the government recently released a new version of its Guide for Employers (M-274) discussed in an earlier post. It is a good idea for employers to review ICE's range of and type penalties to better understand the potential for liabilities. ALL employers are required to complete form I-9s for employees hired, recruited or referred for a fee after November 4, 1986, including U.S. citizens.

Doing a self-audit of I-9s, such as by in-house H.R. professionals or company executives is probably not a good idea. It is recommended that employers use third party auditors or attorneys to conduct an in-house I-9 audit before ICE comes knocking on your door (or sends a three-day notice of inspection). Our firm has had calls by employers who simply want to put our name down as a third party auditor in a subcontract with the potential client's contracting firm in case of an ICE audit. We generally oppose this unless the company first hires us to do a complete private audit in order to get to know the company, the key personnel devoted to I-9 compliance, its operations and workforce with plenty of time to review all I-9s and related documents. We also provide training for the staff that will handle the I-9 process. This saves time if the client later gets a notice of audit or inspection. It would otherwise be too stressful to put together a plan, make corrections, if allowed, in only three days.

Continue reading "ICE to Establish I-9 Center and Increase Employer Audits" »

A revised edition of "Handbook for Employers" or M-274 has been released by USCIS. This booklet is a critical and indispensable tool for employers to use when documenting the work authorization status of new and rehired employees as well as containing information for recruiters and referrers for a fee. Since 1986 when Congress passed the Immigration Reform and Control Act (IRCA), employers have been responsible for verifying work authorization documents for all US citizen and noncitizen hires. This booklet helps employers to fill out the required Form I-9 and explains how to examine the variety of documents an employee may present. In addition, the booklet guides employers about how to avoid charges of discrimination in the I-9 documentation process.

Some of the changes in the new edition include:
* New visual aids for completing Form I-9
* Examples of new relevant USCIS documents
* Expanded guidance on lawful permanent residents, refugees and asylees, individuals in Temporary Protected Status (TPS), and exchange visitors and foreign students
* Expanded guidance on the processing of employees in or porting to H1-B status and H2-A status
* Expanded guidance on extensions of stay for employees with temporary employment authorization
* information for employers in the Commonwealth of the Northern Mariana Islands (CNMI) who must verify their employees' employment authorization on Form I-9 CNMI and information about documents CNMI employers may accept from their employees.

I previously wrote a post in November 2010, I-9 Form Revisions Subject of USCIS Stakeholders Meeting, where USCIS solicited ideas from the public about improving the I-9 form. The notes of those meetings are now available on the USCIS website as the agency works toward revising the form.

Immigration enforcement legislation creates problems for U.S. citizens as well as for immigrants. Over the last few years, we have seen growth in our American citizen clientele because of new federal and state documentation burdens enacted under the guise of national security or to combat illegal immigration. The most common refrain we hear is: "I grew up in the U.S. I always thought I was an American but never had anything to show for it and I never needed the proof until now." Ironically, we hear the same thing about the children of undocumented immigrants who have grown up in the U.S.; only now we are dealing with "undocumented Americans."

Documentation burdens affecting American citizens include:

WHITI: WHITI stands for the Western Hemisphere International Travel Initiative. WHITI requires U.S. citizens to have one of these types of documents when returning from Canada, Mexico, the Caribbean or Bermuda: passports, enhanced drivers' licenses, military cards with travel orders, Merchant Marine Cards, I872 American Indian or Enhanced Tribal cards, Trusted Traveler Cards (see below), or in the case of children under 16, original birth certificates, evidence of birth recorded abroad, or naturalization certificates.

The number of Americans holding U.S. passports has been fairly low compared to other countries, but filings have substantially increased in the last two to three years as WHITI was fazed in. Now, more Americans need passports or one of the documents listed above to re-enter the U.S. from travel destinations not far from the U.S. U.S. Customs and Border Protection (CBP) has a useful "Know Before You Go" brochure describing what documents are needed. Keep in mind that the cheaper Enhanced Drivers License only allows for reentry from specified countries, and only some states offer it. A U.S. Passport is more flexible and required for travel from other countries around the world. You can learn about Washington State's Enhanced Drivers License here. To obtain a passport, see the U.S. Department of State's website.

Continue reading "U.S. Citizen Documentation Problems Stem from Immigration Enforcement" »

It still surprises me 24 years after enactment, how many employers still don't know about their I-9 obligations under the Immigration Reform and Control Act (IRCA) of 1986. Since then, employers are required to complete Form I-9s documenting the work permission status of employees hired after November 6, 1986, including U.S. citizens. Even among employers who know of their I-9 obligations, many still do not fully understand the scope of the I-9 process and record keeping requirements; nor the extent to which Immigration and Customs Enforcement (ICE) has substantially ratcheted up their audits, investigations and sanctions. (See my earlier post on I-9 Form Revisions Subject of USCIS Stakeholders Meeting.)

ICE is the agency responsible for employer audits and raids. Employers should review the ICE press releases to see the size and scope of fines, the mistakes made by employers and the severity of penalties, including criminal indictments. Employers can be fined for failure to complete I-9s at all, for failure to properly complete and retain I-9s, and for "knowingly" hiring unauthorized workers. There are criminal consequences for continuing to hire unauthorized workers, especially after an audit, for a pattern or practice of knowingly hiring unauthorized workers and for more serious offenses such as harboring, smuggling, dealing in or accepting fraudulent documents and related offenses. ICE has been known to indict not just owners and shareholders, but also individual employees, supervisors and managers engaged in such schemes.

A quick look at the ICE website list of press releases concerning workplace enforcement shows these recent examples of settlements or criminal investigations. Every employer should take note:

• Brownwood Furniture, California - criminal information filed charging president and primary shareholder with obstruction of justice and continuing to hire unauthorized workers;
• Timbuktu and By the Docks Restaurants, Maryland - owner sentenced to prison for harboring for private financial gain and competitive advantage 24 unauthorized workers some of which he housed. His sentence included $250,000+ fine and forfeiture of another $300,000 in property. He had continued to employ unauthorized workers, and accepted false documents despite a prior enforcement action. He had also received Social Security mismatch letters [a confusing subject and whole other can of worms] and failed to complete I-9 forms.
• Masters in Metal, California - owners criminally charged for continuing to hire unauthorized workers following I-9 audit three years earlier finding several employees had fake green cards. Although the company reported these people were later terminated, some were apparently in fact not terminated.
• Abercrombie and Fitch, Michigan - settled $1,047,110 fine for "technology deficiencies" in its I-9 verification system. (See an earlier post, Million Dollar Fine Imposed on Abercrombie & Fitch for I-9 Technology Deficiencies);
• IFCO Systems, Texas - five managers indicted for conspiring to hire unauthorized workers following a tip at its New York plant;
• Koch Foods, Ohio - settled a $500,000+ fine for administrative I-9 violations after 161 unauthorized workers were arrested pursuant to a search warrant;
• 180 Audit Notices issued March 2, 2010 in five southern states;
• Pilgrams Pride, Texas $4.5 settlement for hiring unauthorized workers at seven plants;
• 652 Notices of Inspection issued to employers in 2009.

Referring to the one page I-9 form as "an obscure federal document, NPR posted an Associated Press (AP) story about I-9s on November 1, 2010 in "Warnings Abound in Enforcing Immigration Job Rules", in which the Abercrombie and Fitch case was discussed. AP was able to obtain and analyze summaries of 430 ICE audits conducted between July 1, 2009, and January 31, 2010.

Continue reading "Employers Should Be Aware of ICE I-9 Audit History" »

As part of its efforts to be more transparent and engage the public, U.S. Citizenship and Immigration Services (USCIS) held a stakeholders meeting this week about making changes to the Form I-9 or the Employment Eligibility Verification form. Form I-9 is required to be used by all employers to document the work permission status of new hires. This has been the law since 1986. But, what should be a simple to use one-page form, continues to confound employers who are increasingly being warned, fined or indicted for violations in completing or using the form and/or for "knowingly" hiring or continuing to hire unauthorized workers.

I attended the teleconference and found the meeting to be very interesting for several reasons. USCIS has held a number of public engagement meetings and also posts the minutes or notes from meetings on its website. While USCIS creates the I-9 form that all employers must use to document the work permission status of new hires, including U.S. citizens, it is another agency, ICE (Immigration and Customs Enforcement), that conducts audits or raids of employers looking for evidence of satisfactory I-9 record keeping, or evidence of hiring unauthorized workers. ICE is far less transparent, given that it is an investigative agency, while USCIS is a benefits agency.

This particular public engagement meeting was very well attended by universities, employers, attorneys, and community based organizations from around the country. USCIS was most interested to learn from the audience what works and does not work for employers using the I-9 form. This form has been around since 1986 when Congress passed the Immigration Reform and Control Act (IRCA). It has taken on new importance in recent years as immigration enforcement actions have increasingly focused on employers as the magnets for illegal immigration. The Obama Administration has focused more efforts on penalizing employers than on the unauthorized workers, often using them as witnesses against the employer. But the I-9 verification process continues to be confusing for many employers, particularly as the program is linked to E-Verify, the government's online database for checking work permission status. E-Verify is not mandatory....yet .....except for federal contractors, and for use by certain employers previously audited. E-Verify is also required in those states that have passed legislation requiring E-Verify for state or local government contracting or where it is mandatory for the entire state. Nonetheless, E-Verify employers must still have their own manual or electronic I-9 verification procedures in addition to using E-Verify. (See an earlier post about a challenge to Arizona's mandatory E-Verify law in Chamber v. Whiting, "Arizona Cases Set for Argument."

The audience was asked to imagine what the "ideal I-9 form would look like" given that it is the law to have one and employers must use it. The audience provided many suggestions to make the form easier to understand, to accommodate a greater range of the more peculiar immigration statuses allowed in the law, and to make it easier for both employers and employees to understand their obligations and the various types of documents they are likely to see. Of course, what remains to be seen is how USCIS will use the comments to make the I-9 more user-friendly and less time consuming for employers, since the slightest inaccuracies can lead to fines.

On November 1, 2010 at 9:00 a.m. the Ninth Circuit Court of Appeals will hear oral arguments in U.S.A. v. State of Arizona, Case No. 10-16645, at the James R. Browning U.S. Courthouse in San Francisco. This controversial case addresses the constitutionality of Arizona Senate Bill 1070, which requires state law enforcement officers to check a person's immigration status under certain circumstances, and authorizes a warrantless arrest where there is probable cause to believe that the person has committed an offense making him/her removable from the United States. The U.S. government argues that federal statutes preempt SB 1070. The U.S. District Court for the District of Arizona previously issued a preliminary injunction in part and denied it in part. The State of Arizona and Governor Brewer appealed asking the Ninth Circuit to repeal the injunction imposed by the District Court. Parts of the law not subject to the injunction went into effect July 29, 2010. C-SPAN Channel 1 will broadcast the oral arguments live with remote viewing available in other federal courthouses.

The preemption issue is very important for several reasons. First, a number of states have enacted or are on the verge of enacting copycat legislation because Congress has simply failed to do its job to enact immigration reform legislation. In addition, many people feel the U.S. Department of Homeland Security (DHS) has not done enough to secure the borders and punish employers who hire workers without legal documents. Secondly, states and localities have tried to address perceived immigration problems by regulating who can rent housing, obtain business and professional licenses, seek social services and other activities. More commonly, states and localities have enacted employer verification obligations requiring employers in their jurisdictions to use the the federal government's computerized E-Verify system to document work permission status of employees.

Meanwhile, all eyes are on the U.S. Supreme Court in the case of Chamber of Commerce v. Whiting, case 09-115 (formerly titled Chamber of Commerce v. Candelaria in the Ninth Circuit Court of Appeals). Oral arguments are scheduled for December 8. All of the briefs, which include several amicus briefs in support of the petitioner, U.S. Chamber of Commerce, and a plain description of the case can be found on SCOTUS Blog. See also the U.S. Supreme Court docket for all filings in the case. The Chamber case addresses the question of whether the Immigration Reform and Control Act of 1986 (IRCA), as amended, preempts federal law that makes use of E-Verify voluntary. Although many in Congress and at DHS would like to see mandatory E-Verify for all employers, right now under federal law, the use of E-Verify is voluntary nationwide except for federal contractors and some employers who have been audited by DHS. However, several states and localities require employers to use E-Verify if engaged in state or local contracting, and other states are just waiting to enact mandatory E-Verify for all employers. For employers conducting business in several states, the patchwork of E-Verify requirements as well as penalties outside the federal scheme found across the country can be very confusing. On the other hand, the federal requirements attempt to be a comprehensive scheme for all employers.

The preemption doctrine has application to other areas of law as well such as environmental regulation. Therefore, it will be interesting to see the far-reaching consequences of any decision by the U.S. Supreme Court in Chamber v. Whiting.

In an interesting case, U.S. Immigration and Customs Enforcement (ICE) and Abercrombie & Fitch agreed to a $1,047,110 settlement for I-9 technical violations at Abercrombie & Fitch's Michigan retail stores. The ICE audit began in 2008. The company was not found to have knowingly hired unauthorized immigrants, but its electronic I-9 system was apparently found to have many problems. An ICE representative said:

"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."

Every employer must complete Form I-9 for every worker hired after November 6, 1986 to document work permission status in the U.S. I-9s are required for U.S. citizen hires as well. Employers are liable both for "paperwork" violations, such as mistakes and technical violations, for failing to complete or maintain I-9s, as well as for "knowingly hiring unauthorized workers." There are a range of civil penalties per violation as well as criminal penalties for "pattern or practice" violations.

Abercrombie & Fitch had an electronic I-9 system which is allowed under interim final immigration regulations, though in this case, the audit started before the regulations came out. The fine seems high given the violations were technical rather than "knowing hire" violations. It appears the company failed to have in place various internal controls or compliance procedures that called into question the validity of the I-9s.

Given the government's focus on employers the last couple of years, a cottage industry of software companies has developed, all vying for employer dollars to be spent on IT devoted to I-9 compliance. LawLogix Group, Inc., one such I-9 compliance software vendor, has further comments on the case and due diligence. Allott Immigration Law Firm in Colorado has a good list of 25 due diligence questions to ask of potential I-9 software vendors.

The Obama Administration has increased enforcement efforts on employers through the audit process. On September 16, 2010, the American Immigration Lawyers Association announced it had received confirmation from ICE that the agency served "more than 500 Notices of Inspection (NOIs) to companies throughout the U.S. ... According to ICE, the audits flow in large part from leads about employers who allegedly are engaging in hiring unauthorized workers and paying employees unfair wages or otherwise exploiting workers." Employers generally have only three days to produce I-9s when a NOI is received. Every employer should at least consider doing a private internal I-9 compliance audit with immigration or employment counsel just in case ICE comes knocking at the door. Employers can expect to see more ICE audits and mandatory E-Verify as part of the enforcement component of any immigration reform legislation.