Articles Posted in Workplace Compliance, Form I-9, E-Verify

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USCIS has released some new instructional videos to help employers and their employees properly complete Form I-9s at time of hire. Since the passage of the Immigration Reform and Control Act of 1986 (IRCA), it has been the law every employer must document on Form I-9 the work permission status of employees hired since November 6, 1986. The law applies to the hiring of US citizens as well. Employers are subject to audit (Notices of Intent to Inspect) that can result in fines for failure to complete I-9s, failure to properly complete I-9s and for “knowingly hiring unauthorized workers.” In egregious cases, employers can be prosecuted for “patterns or practices of knowingly hiring unauthorized workers.” In addition, employers are prevented from discriminating against employees on the basis of national origin or citizenship status except in limited circumstances.

A few good resources for employers include:

1) Form I-9 and instructions. For more comprehensive information, see I-9 Central 2) M274 Handbook for Employers

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I previously wrote about the new I-9 form published by USCIS on March 8. The Handbook for Employers, or M-274, has also been updated. The biggest changes are the additional and expanded pictures of the various documents employers are likely to encounter. However, there are also a number of minor changes that can raise a number of questions by employers as to the appropriate documents that are acceptable or raise questions about the details in completing the I-9s.

Today, I attended a teleconference held by USCIS with stakeholders about the new I-9s. Employers’ questions centered around what to do when re-verifying employees who have updated documents. USCIS says to use the new March 8, 2013 form and to attach the old I-9 to it. There were many other questions raised by referrers and recruiters for a fee (e.g., staffing companies) and universities, all of which have seasonal or re-hire scenarios. The new I-9 form has a new place to indicate the start date for new hires. Other questions or concerns addressed the new boxes for the various types of Social Security cards, and what to do if someone has requested a replaced Social Security card. Many questions centered around when to use the old v. new form, whether to re-verify existing employees on the new form (No!), how long to keep scanned I-9s(same retention rules as paper versions), and whether employers can pre-populate forms from other data sources (e.g., payroll company information)(no, not the employee section, yes for the employer name and address only in part 2).

USCIS is holding numerous free public webinars and will also customize their training for employers who request it. Employers should start by taking a close look at the new I-9, read the instructions and regulation thoroughly, and then review the Handbook. Be sure to look at I-9 Central and call experienced counsel if you run into any unusual problems or wish to conduct an internal audit or training of personnel.

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Today, USCIS published a notice of revised I-9 form in the Federal Register. USCIS states: “Although employers should begin using the 03/08/13 dated form right away, older forms dated 02/02/09 and 08/07/09 will be accepted until May 7, 2013. After May 7, 2013, only the 03/08/13 will be accepted. The revision date is on the lower left corner of the form.” USCIS has also scheduled free webinars to help employers understand the new form.

Primary changes to the new form include more thorough instructions for employees and employers, a visually easier layout, and ability to complete online. USCIS added data fields, including the employee’s foreign passport information (if applicable), and telephone and email addresses. The form is now two pages rather than one, excluding the list of usable documents to verify work authorization. The list of acceptable documents include additional details about individual documents such as the various types of acceptable Social Security cards. Employers should still refer to I-9 Central for more details. The Handbook for Employers (M-274), mentioned in an earlier blog post below, is being updated.

The I-9 form is to be used by employers who hire, refer or recruit for a fee. The form is to be completed by the employer and employee within three business days of hire and may not be used as a screening tool. Employees must document their identity and work authorization in the US. The form is to be used for all new hires, including US citizens. Employers can be fined for failing to complete I-9s, for completing them improperly, for failing to retain them, and for knowingly hiring unauthorized workers. This has been the law since November 6, 1986.

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It’s been 27 years since Congress passed the 1986 Immigration Reform and Control Act (IRCA) requiring employers to document the work permission status of ALL new hires, including US citizens, on Form I-9. After all those years, employers still contact our office wanting to hire, or continue employing undocumented workers, or they simply want to “help” an employee who they don’t realize lacks permission to work. Many employers sound clueless about IRCA requirements, even when there is so much information out there. In addition, mergers and acquisitions are picking up again in a number of industries. Determining actual or potential I-9 liability and other immigration related workplace compliance problems should be part of every due diligence effort.

Of course, there are many employers who know about their IRCA obligations but ignore them, betting they will not be the subject of enforcement action and penalties, and contributing to employment as the magnet for illegal immigration. By contrast, many employers don’t know if their employees are work authorized or not if they are using fraudulent documents or signing I-9 forms falsely. It’s not just those who entered the country illegally without inspection that employers want to hire or sponsor for visas and green cards. A substantial portion of the undocumented population are those immigrants who came to the US lawfully and overstayed visas, committed misrepresentation in getting their visas, or violated status by working without authorization when the terms and conditions of those visas prohibit employment (such as tourists, foreign students without authorized practical training, and H-4 spouses, to name a few examples). Hiring workers without authorization puts employers at risk as well as the unauthorized workers. Employers can be audited and fined at any time; the worker can be deported or at the least make the ability to get legal documents more complicated. Nonetheless, the fact that a worker does not presently have work authorization, doesn’t mean that they are ineligible to become work authorized later. Separate legal advice is recommended to determine a prospective employee’s status and strategy. Because of potential conflicts of interest between the employer’s liability and the employee’s right to work (or not), each may need separate legal advice depending upon state bar rules.

Without doubt, the direction of Congress has been and will continue to be increased enforcement penalties against employers. According to ICE, in 2012 the agency made:

-520 criminal arrests tied to worksite enforcement investigations, of which 240 were owners, managers, supervisors or human resources employees. They face charges such as harboring or knowingly hiring illegal aliens. The remaining workers who were criminally arrested face charges such as aggravated identity theft and Social Security fraud.
-Homeland Security Investigations served 3,004 Notices of Inspection and 495 Final Orders, totaling $12,475,575.00 in administrative fines.
-ICE debarred 376 business and individuals for administrative and criminal violations.

While these enforcement figures are fairly low, jobs in the US are still the magnet that attracts both legal and illegal immigration. As we have seen, when the economy is doing well, more immigrants come to the US. When employment slows, so does legal and illegal immigration.

Potential Penalties
Civil fines for employers who violate I-9 rules include $110-$1100 per paperwork violation or $375-$15,000 per knowing hire/continuing to hire violation per employee. Recent legislative proposals include increased fines for employers by factors of three to ten times what they are now. Employers can be penalized for technical “paperwork” violations (failing to complete I-9s, failing to properly complete I-9s, failing to keep I-9s, etc.) as well as for “knowingly hiring or continuing to hire unauthorized workers.” “Knowing” includes “constructive knowledge.” In addition, there are criminal penalties for a “pattern or practice” of knowingly hiring or continuing to hire undocumented workers. Penalties can include asset forfeitures if used in a crime, as well as debarment from various federal programs, business forfeitures, liability for back wages, damages, and legal fees and costs. In other words, it can be very, very expensive to hire undocumented workers just to save on payroll expenses or to “help someone out as a favor.” There are also the burdens and costs of public relations nightmares, fiduciary duties owed to shareholders, and loss of management and executive time, if not service to the company, if the CEO, owner, officer or manager is found liable. In egregious cases, employers may be dealing with USCIS, ICE, the IRS, Social Security, US Department of Labor, state labor offices, prosecutors, and potentially the SEC (relating to public filings and disclosures about company liabilities).

ICE publishes its penalty schedule. ICE considers five factors in determining penalties: the size of the business, good faith effort to comply, seriousness of violation, whether the violation involved unauthorized workers, and history of previous violations. Every employer should review ICE’s description of the I-9 audit process including the “enhancement matrix” based on the above listed five factors.

Employers should plan how the company or organization will respond in case of a Notice of Inspection (NOI). Employers have only three days to respond. Calling the company lawyer, who may not practice immigration or employment law, or contacting an immigration lawyer for the first time upon receiving a NOI, with only three days to respond, can make it very difficult to review personnel records and I-9s and/or to formulate an effective response in a short time frame under stressful conditions. Rather, companies should review their employment and compliance practices before ICE comes knocking on the door. Conducting an internal audit with counsel and training appropriate personnel to handle I-9s should be done well in advance.
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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:

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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.
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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.

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584383_united_states_passport.jpgImmigration 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.
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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.
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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.”