It’s Time to Get Your I -9 House in Order: Employer Audits on the Rise Susan S. Im Hungerford Nichols 18th Annual Update December 5, 2013
ICE’s Focus on Worksite Enforcement ICE aggressively targets employers who knowingly and recklessly employ an illegal alien workforce. We will use all our investigative tools to pursue employers who take advantage of illegal labor to make an unlawful profit and gain unfair advantages over businesses which operate within the law. Employers are responsible not only for the people they hire but also for the internal systems they choose to utilize to manage their employment process and those systems must result in effective compliance. - Brian Moskowitz, Special Agent-in-Charge at ICE Office of Investigations in Detroit
Worksite Enforcement Gets a Face Lift Under the Obama Administration • In 2012, ICE issued a record over 3,000 Notices of Inspection for I-9 audits • 2,496 in 2011; 2,000 in 2010, 1,444 in 2009, 503 in 2008 and only 250 in 2007 • Since 2009, ICE has conducted over 7,500 audits and imposed over $80 million in fines • Targeting business owners and managers, threatening imprisonment and significant monetary penalties including forfeiture of business assets
How are employers selected for an I-9 audit? • Selection of employers are generally based on information gained through disgrunted employees, investigative leads and intelligence • What types of documentation is ICE requesting to see from employers?
Civil Penalties for I-9 Violations • I-9 Paperwork Violations ─ $110 - $1,100 per violation • Civil Penalties for Use of Fraudulent Documents ─ First offense: $375 - $3,200 for each fraudulent doc. that is the subject of the violation ─ Subsequent offenses: $3,200 - $6,500 for each fraudulent doc. that is the subject of the violation • Civil Penalties for Unauthorized Employment ─ First offense: $375 - $3,200 for each unauthorized worker ─ Second offense: $3,200 - $6,500 for each unauthorized worker ─ Subsequent offenses: $4,300 - $16,000 for each unauthorized worker
Criminal Charges and Penalties • 8 USC § 1324(a): Unlawful Employment of Aliens – Up to $3,000 fine and/or 6 months imprisonment for a pattern or practice of knowingly hiring or continuing to employ unauthorized aliens • 18 USC § 1546: Use of Fraudulent Documents – Fines and/or up to 5 years imprisonment • 8 USC § 1324 and 18 USC § 371: Harbor and Transport Unauthorized Aliens – Up to 10 years imprisonment for each alien harbored and/or fines of up to $250,000 or double the employer’s financial gain from the harboring, whichever is higher • 18 USC § § 1956 and 1957: Money Laundering – Up to 20 years imprisonment and fines of up to $500,000 or twice the amount laundered, whichever is higher
Recent ICE Busts in MI Abercrombie and Fitch fined over $1 million after I-9 audit; highest ever for a technical violation ICE announced a $1,047,110 fine settlement reached with the clothing retailer Abercrombie & Fitch for violations of the Immigration and Nationality Act related to an employer's obligation to verify the employment eligibility of its workers. The settlement is the result of a November 2008 Form I-9 inspection of Abercrombie & Fitch's retail stores in Michigan. The audit uncovered numerous technology-related deficiencies in Abercrombie & Fitch's electronic I-9 verification system. The company was fully cooperative during the investigation and no instances of the knowing hire of unauthorized aliens were discovered. Since the initial inspection, Abercrombie & Fitch has taken measures to revise its immigration compliance program and has begun to implement new procedures to prevent future violations of federal immigration laws. "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. “ Brian Moskowitz, Special Agent-in-Charge at ICE Office of Investigations in Detroit
Recent ICE Busts in MI Michigan dairy farm and its owners sentenced for employing undocumented aliens • Aquila Farms near Bad Axe, MI, owners are John and Anja Verhaar • Employed 100 people between 2000 and 2007 • ICE found that 78 were not authorized to work in the U.S. • A criminal investigation ensued, revealing that some of the workers were hired on multiple occasions using different names or SSNs • Aquila Farms failed to conduct the necessary inquiries to determine the employment eligibility of their workers • In 2011, the owners agreed to a plea deal, in which they would serve 3 years of probation and pay nearly $3 million in penalties and $234,000 in fines • Initiated based on a lead by the Michigan State Police and investigated by ICE HSI special agents www.ice.gov - News section for latest employer busts by ICE!
The I-9: Why Does it Matter? • Immigration Reform and Control Act of 1986 (IRCA) requires employers to verify the identity and employment eligibility for all new hires after November 6, 1986 • Employer can be found to have “constructive knowledge” of hiring or employing an unauthorized worker if employer improperly or fails to complete the I-9 (totality of circumstances test) • Proper completion and retention of the I-9 shows good faith compliance, a potential defense • Mitigating or enhancing factors for recommended fines include – Business size – Good faith of employer – Seriousness of violations – Unauthorized aliens – History – Cumulative adjustment
No Defenses for Actual Knowledge • Actual Knowledge: Employee makes an admission or “true confession” of undocumented status • No defense available for Actual Knowledge, even with proper completion and retention of I-9 forms.
The Latest I- 9: What’s different? • Latest version of Form I-9 (www.uscis.gov) must be used for each new hire • Only unexpired documents acceptable; also a reduced list of acceptable documents • New optional items in section 1 • Provide all 6 pages of instructions to new hires • Latest M-274 Handbook for Employers (www.uscis.gov)
I-9 Basics • I-9s must be completed for all new hires regardless of citizenship or nationality • I-9s must be retained for all current employees • For terminated employees, I-9s must be retained for 3 years after date of hire OR 1 year after date of termination, whichever is later • Show new hires the “List of Acceptable Documents” with List A, B and C • Employee must complete Section 1 of I-9 on date of hire • Employer must review presented documents and complete Section 2 of I-9 within 3 business days of hire • Genuine/Reasonable Test for Documents – not required to be a document expert!
Common Errors on the I-9; Remedying Technical Errors • Employee errors in Section 1 • Employer errors in Section 2 • Employer errors in Section 3 • Employer directs new hires to bring specific documents • Never too late to complete or correct an I-9; but never back date! • Use different colored ink, initial and date each correction to avoid the appearance of hiding or disguising information – no white out. • In Section 1, all corrections must be made by the employee. In Section 2, all corrections must be made by the employer.
E-Verify: Who uses it? • Voluntary employers • Employers taking advantage of STEM OPT 17 month extensions for F-1 students • Employers required by state law or county ordinance • Employers subject to an FAR E-Verify Clause (certain federal contractors and subcontractors)
Internal Audit: The Best Defense • With ICE threatening business owners and managers with civil and criminal penalties, including forfeiture of business assets, employers should utilize experienced immigration counsel to conduct an audit of their I-9 forms and establish a consistent I-9 compliance policy in advance of receiving a Notice of Inspection (NOI). • Follow-up and conduct regular I-9 compliance training for all who touch I-9s
Susan S. Im 61 Commerce Ave. SW, Suite 502 Grand Rapids, MI 49503 P 616.606.5297 (LAWS) D 616.258.7241 susan@imlaw.biz www.imlaw.biz
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