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.