The owner of a Southern California furniture manufacturing company, Brownwood Furniture located in Rancho Cucamonga, has been sentenced to 10 months in federal prison for knowingly hiring illegal immigrants and six months for continuing to employ illegal aliens.  The sentences will be served concurrently.  In addition to the prison terms, he was ordered to pay a $15,000 fine.

Prosecutors say 57-year-old Brownwood Furniture owner Rick Vartanian was told earlier that 61 of his 73 workers at the facility were illegal immigrants and had submitted invalid documents to obtain their jobs.  In November 2009, Vartanian told U.S. Immigration and Customs Enforcement agents that the illegal immigrants no longer worked for Brownwood Furniture, but investigators discovered 18 illegal immigrants were still working for him.  Vartanian, who was convicted of obstruction of justice and employing illegal immigrants, was sentenced Monday by a Los Angeles federal judge.

Brownwood Furniture vice president Michael Patrick Eberly pleaded guilty to employing illegal immigrants and he was placed on a years’ probation and fined $10,000.

The charges against the defendants stem from an investigation that began after ICE HSI received an anonymous tip that Brownwood furniture was using unauthorized labor. An audit of the company’s hiring records in July 2009 revealed that 61 of the firm’s 73 employees had submitted invalid documents to obtain their jobs. After ICE HSI notified the company about the discrepancies, the executives told investigators the unauthorized workers had been terminated. However, when ICE HSI agents executed a search warrant at the business in Dec. 2009, they encountered 30 unauthorized workers, 18 of whom had purportedly been terminated following the July audit.

These sentences make very clear that employers who knowingly hire unauthorized workers, face seriously dire consequences.

Should you require the services of an expert team of employer compliance specialists, please contact our office to discuss your situation and visit our I-9 Employer Compliance Resource Center:  www.I-9Audits.com

Our March 2011 news is now available.  You can access our Immigration News here and our I-9 Compliance Newsletter here.  Should you wish to discuss your immigration case with us, we can be contacted at info@immigrationsolution.net or by phone at 562 612.3996.

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ICE and HSI worksite enforcement activities strike again – this time it’s temp agencies!

In an ICE Press Release today, it was announced that during an ICE and HSI investigation, it was found that a 2-location temp agency was knowingly supplying undocumented unskilled and skilled warehouse and janitorial workers to their clients as a part of their labor pool.

Clinton Roy Perkins, the owner of Can Do It Inc. in Bensenville, IL, was sentenced on February 16th to 18 months in prison, to be followed by three years of supervised release, for knowingly hiring illegal aliens at the staffing companies. He pleaded guilty in September 2010. On Feb. 25th, U.S. District Judge Joan B. Gottschall also ordered the forfeiture of $465,178 in proceeds obtained as a result of the criminal activity.

Perkins admitted to knowingly hiring more than 10 illegal aliens from Mexico between October 2006 and October 2007.  Perkins did not require the workers to provide documents establishing their immigration status or lawful right to work in the United States.

Perkins and his son-in-law, Chrispher Reindl, paid the illegal workers’ wages in cash; did not deduct payroll taxes or other withholdings. Perkins and Reindl directed low-level supervisory employees to transport illegal workers back and forth between locations near the aliens’ residences in Chicago and work sites in the suburbs. Both also provided bogus six-digit numbers – purporting to be the last six digits of the aliens’ Social Security numbers – to a company, knowing that their workers were in the country illegally and did not possess valid Social Security numbers.

In a quote from special agent in charge of ICE HSI in Chicago:  “We will hold employers accountable for their actions.  Mr. Perkins knowingly hired an illegal workforce and circumvented our nation’s immigration laws for financial gain. The goal of our enforcement efforts is two-fold – reduce the demand for illegal employment and protect job opportunities for the nation’s lawful workforce.”

ICE was assisted in the investigation by the U.S. Department of Labor’s Office of Inspector General in Chicago. Assistant U.S. Attorneys Christopher R. McFadden and Daniel May, Northern District of Illinois, prosecuted the case.

One of Mississippi’s most successful and largest private employers pled guilty in federal court last week to knowingly violating federal criminal conspiracy laws in its employment of illegal aliens at the company’s electrical transformer plant in Laurel, MS following an investigation by ICE and Homeland Security Investigations (HSI).  The company agreed to pay a $2.5 million fine, which is larger than normal for such a conviction, the U.S. Justice Department said in a news release.

Immigration agents detained more than 600 illegal immigrants at Howard Industries’ electrical transformer plant during a massive raid on Aug. 25, 2008. Those detained in the raid came from countries including Brazil, El Salvador, Germany, Guatemala, Honduras, Mexico, Panama and Peru, and most of them were deported, though a few were convicted on identity theft charges for using fraudulent documents and providing fake papers to other workers.

The company said in a statement that it was pleased to resolve the investigation “based on the actions of its former human resources manager Jose Humberto Gonzalez.”  Gonzalez is the only company executive who has been charged in the case. He pled guilty in December 2009 to conspiracy and admitted that he hired hundreds of people who he knew were in the country illegally.  

The company had repeatedly denied allegations that it had knowingly hired individuals without work authorization, putting all of the blame on its HR manager, Jose Humberto Gonzalez, who was charged in a 25-count indictment with conspiracy and employee verification fraud.   He faces a maximum of 5 years of imprisonment on the conspiracy charge and on each employee verification fraud count. He also faces a minimum of 2 years imprisonment for the aggravated identity theft charge and possible fines up to $250,000.

Howard Industries was charged with knowingly and willfully conspiring to encourage and induce undocumented workers to reside in the US, and knowingly conspiring to conceal, harbor and shield from detection such workers.  As it turned out, Howard Industries waived indictment and agreed to plead guilty to the one-count felony of  conspiracy to commit offense or to defraud the United States which calls for a term of not less than one and not more than 5 years of probation and a fine of up to $500,000. However, this fine was substantially enhanced to $2.5 million due to the nature of the crime (harboring), the number of workers involved (100 or more), and the size of the company.

Apparently Gonzalez would routinely hire unauthorized workers who presented false identity documents, including green-cards and Social Security cards, and then would complete the I-9 with the fake information.  Gonzalez was also accused of submitting SSNs to the Social Security Administration to verify their numbers and then disregarding the results if they came back as invalid.

E-Verify doesn’t protect against identify fraud: Howard Industries was using E-Verify and ran every applicant through the system, but E-Verify doesn’t detect identify fraud and shouldn’t be used as a substitute for I-9 compliance.  The case at hand teaches a lesson about the E-Verify program, in that using E-Verify doesn’t insulate an employer against penalties and doesn’t provide a safe harbor against worksite enforcement.

So what’s an employer to do?

If you are contemplating ‘going electronic’, whether that be an electronic I-9 system or enrolling in the E-Verify program, it is imperative that you find out what condition your I-9’s are in.  This is done by having a qualified immigration attorney that specializes in compliance issues perform either a partial or full audit on your I-9’s so that the reoccurring errors and violations buried in your paperwork can be identified, corrected, and your staff properly trained.  We additionally encourage our clients to work with us in establishing policies and guidelines as to how they want to process and manage the I-9 function at their organization and document this, and make sure that everyone involved with the process is trained and fully understands your internal policies.

We link to the ICE press release

For more information on our employer compliance services and solutions

February 16, 2011, Brett Dreyer, Chief of the Worksite Enforcement, Unit of Homeland Security Investigations, verified on 2/16/2011 that ICE continues to focus its investigations both on businesses that were brought to their attention by tips and leads, and on those that work in areas of national security and critical infrastructure. Mr. Dreyer further confirmed: “The agency continues to be interested in egregious employers as they tend to break other laws in addition to immigration…including paying employees under the table, avoiding taxes and ignoring employee protections. The inspections will touch on employers of all sizes and in every state in the nation — no one industry is being targeted nor is any one industry immune from scrutiny.”

Confirmation has been publicized that NOI’s were indeed served throughout the USA on February 17^th.  The audits are expected to be completed within the next 2-3 months. We link here for more on this story.

This is a good time to review what you should do if you are served with a Notice of Inspection (NOI):

• Immediately contact Immigration Solutions and company management
• Employers are allowed by law 3 days notice to respond by producing the I-9 records of their active as well as terminated employees within a particular period of time

The NOI will be most probably be accompanied by a very invasive Document Subpoena that might ask for all of some of the below items:  

• A copy of your I-9 Policy and Procedures Statement or Manual
• I-9 forms for current employees hired after 11/6/1986
• I-9 forms for terminated employees within the required retention period
• Complete employee lists of current and terminated employees
• Quarterly Wage and hour reports
• Payroll Summaries
• SSA Mismatch correspondence
• E-Verify and/or SSNVS documents
• Business information such as:  Employer ID number, owner’s SSN/address, business license, etc.

We work with our clients to create compliant workforces, and now is the time to be proactive if you absolutely know that you have problems with your I-9 forms; and, by the way, most employers do.  We encourage you to be proactive and take action now before you pay the high price of being put in a position where your options have diminished.

We are happy to hear from you and are very flexible with our package of compliance services and solutions.  Our talented team is read to assist you with whatever you’d like to accomplish with your compliance programs.  Visit our I-9 Resource Center here.

Here’s another sad story from the restaurant industry. Snack Attack Deli, d/b/a  a Subway Restaurant franchise in Fayetteville North Carolina, has been neglecting filling out I-9 Employment Eligibility forms for several years to the tune of 108 I-9 violations producing a serious fine of some $111,078, as reported by the Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO) on February 11, 2011.  The Judge considered the small size of the company, the number of employees and their payroll and reduced the penalty down to $27,000 which was still difficult for the small franchise to handle.

Here’s the back story: Snack Attack produced 11 incomplete I-9 forms for 108 employees, current and mostly past employees, following the receipt of an NOI requesting I-9 forms for current and past employees for years 2006 through 2009 from ICE in early 2009.  The ICE auditor provided the owner with a copy of a sample I-9 form along with a copy of the I-9 Employer Handbook and told one of Snack Attack’s employees that if new forms were prepared, they should not be back dated.  Section 2 of the 11 I-9 forms that were produced were not filled out at all, and 7 of the 11 forms had been back dated  – including one for the restaurant owner.  Amazing- go figure!

ICE then issued a Notice of Intent to Fine in July 2009 stating that Snack Attack committed 108 I-9 violations including improper completion of the 11 forms, failing to complete I-9 forms for 97 employees.  Each violation carried a penalty of $1,028.50 for a total of $111,078.

Snack Attack alleged that the back dating was not their fault because it occurred in section 1 and that the owner had sold the business to another person, although there was no evidence to support his claim and so the judge issued civil penalties in the case.

The Judge wrote that failure to prepare an I-9 form is amongst the most serious of paperwork violations, in addition to not filling out the employer attestation in section 2.

It should be stated that there was no evidence of unauthorized workers and the 97 employees for whom no I-9’s were filled out, remains unresolved.  ICE’s position was that Snack Attack’s practices could very easily lead to the hiring of unauthorized workers.

We cannot stress enough that employers must be proactive and generate an I-9 form for all their employees and should catch these serious violations right now, particularly if you are in an industry such as food service, manufacturing/distribution, the garment industry, construction or the hospitality industry that are making headlines every week and creating media nightmares for employers

We also learn with this ruling that although fines are calculated based on regulatory criteria, there is some hope of relief based on a company’s size and business volume.  The question is, could there have had a much happier ending if Snack Attack would have retained the services of a competent attorney with a specialty in employer compliance issues to represent them during the audit?  We say unequivocally, “yes!”

For more information on employer compliance issues, please visit our I-9 Resource Center.

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E-Verify Self Check

The USCIS Self-Check Initiative will go into effect on March 18, 2011 and will permit individuals to check their work authorization status prior to being hired and to enter data into the E-Verify system that might be reflected in federal databases to ensure that the information relating to their eligibility to work is correct and up to date.  This will lead to a more  reliable and accurate E-Verify system that works better for both employers and employees.

How does Self-Check work?

E-Verify self check uses a Web-based interface that will be accessible to all individuals and is a free, voluntary service offered by the government to provide information to the user about his/her employment eligibility in the USA.  The user will not need to register or open an account, but will be required to agree to the “Terms of Use” and restrictions on usage (you may only run a self check on your own information) detailed on the E-Verify Self-Check website before granted access.

The information collected will only be used to:

• Confirm the identity of the user and
• Confirmation of work authorization

The user will be asked to confirm their current work authorization status and to enter minimal biographic information (name, address, date of birth, the social security number is optional).

After the information is submitted it is authenticated by a 3^rd party Identify Assurance Service that will generate 2 and 4 questions that only the user can answer.  If the user is unable to answer a question or the databases of available information from public records, financial institutions and other available records are insufficient, the user’s identify will not be authenticated and the user will be unable to advance to the next step and complete usage of the system. In this event, none of the information entered is provided to or retained by E-Verify Self-Check.  The system does retain, however, a transaction number, the reason for failure, the date and time of the transaction and the error code.

Once the user’s identity has been authenticated, they can then run an employment eligibility query to determine their work eligibility status.  The biographic information that was provided will pre-populate (and cannot be changed) and additional information will be requested that is identical to the information and documentation required for the I-9 form. Following this step, one of three results can occur:

1)  Confirmation of Work Authorization

2)   Possible SSA mis-match information; and

3)  Possible immigration information mis-match

The user is then asked if they wish to resolve the issue if 2 & 3 above are received.  With an SSA mis-match, the system generates a form with their name and biographic information along with the E-Verify Case Number with detailed instructions as to how to resolve the issue  If the issue is immigration related, the system provides instructions to contact E-Verify Customer Service to assist in the correction of their immigration records within 72 hours after the inquiry to speak with a status verification representative.  If the user’s record cannot be corrected by the representative, the user will be advised of further actions required to resolve their immigration mis-match.

Confirming Work Authorization Without Identity

If an individual is unable to authenticate through the IdP but wants to determine work authorization status prior to hire, USCIS will provide information on how to visit a Social Security Administration field office, access Social Security yearly statements, call USCIS, or submit a Freedom of Information Act/ Privacy Act request to access work authorization records. The individual will also be advised to check the information at the various credit bureaus and through a free credit check website.

Conclusion

With the self check program, workers will be able to use E-Verify in much the same way as employers, except that workers will need to take extra steps to verify their own identity.  It will alleviate much of the administrative burdens that fall on employers who receive an E-Verify non-tentative confirmation of an employee’s work eligibility, since the new tool should allow employees to identify and resolve verification problems before they begin a new job.

Resources

For more information on E-Verify, visit USCIS’  E-Verify homepage.

E-Verify Employee Rights and  Responsibilities

For those of you who might rather listen to our news than read it, we are releasing a podcast of a previous Blog post on the topic of the I-9 Revised Employer Handbook that was released by USCIS last month that provides additional guidance on many of the most frequently asked questions that we see in our employer compliance practice.  Have a listen and please take our Survey.   For a list of our compliance services and solutions we link here.

Last week the House subcommittee on immigration policy and enforcement held their first hearing on “ICE Worksite Enforcement – Up to the Job?” The major agenda item was whether or not Immigration and Customs Enforcement (ICE) was adequately enforcing worksite immigration laws.  The Republican members called upon ;their usual sources to diminish the Obama administration’s enforcement efforts, even though Deputy Director of ICE, Kumar Kibble stated quite clearly that ICE has achieved record numbers of investigations, audits, fines, and deportations by citing the below  statistics.  Frankly, after listening to the majority members, one can’t help but wonder if any amount of enforcement would be sufficient to meet their expectations.

Under the Obama administration, ICE has moved  away from raids, and stepped  up the pace of auditing businesses who may be suspect to employing undocumented workers.  However, the emphasis today is more on employers who hire immigrants and not just arresting undocumented immigrants who are working in the factories, the hotels, restaurants and construction businesses.  The vehicle being used to police the workforce is the auditing of I-9 forms,  levying fines and utilizing employer verification tools such as E-Verify and the Ice Mutual Agreement Between the Government and Employers Program.

The Deputy Director cited the following statistics as evidence of the success of ICE’s worksite enforcement: for FY 2010:

• A record 2,746 worksite enforcement investigations, more than doubling the 1,191 cases initiated in FY 2008.
• ICE criminally arrested 196 employers for worksite related violation, surpassing the previous high of 135 in FY 2008.
• ICE also issued a record 2,196 notices of inspection to employers, surpassing the prior year’s record of 1,444 and more than quadrupling the 503 inspections in 2008.
• ICE issued 237 final orders – documents requiring employers to cease violation the law and directing them to pay fines – totaling $6,956,026, compared to the 18 issued for $675,209 in FY 2008.
• The total of $6,956,026 last year represents the most final orders issued since the creation of ICE in 2003.
• In addition worksite investigations resulted in a record $36,611,320 in judicial fines, forfeitures, and restitutions.
• Finally ice brought a new level of integrity to the contracting process by debarring a record 97 businesses and 49 individuals preventing unscrupulous companies from engaging in future business with the government.

The glaring facts that came out of the hearing are that no matter whether it’s worksite raids or company audits with deportations of undocumented aliens, the current state of how foreign born workers are processed into the country is no longer working.  The conversation that we all should be having is the comprehensive reform of how workers are brought into the USA.  We can only hope that the GOP and the Democrats can have civil and reasonable debate that results in meaningful change.  Let’s see what happens.

As previously reported in our blog post and newsletter,on January 12, 2011, USCIS Director Alejandro Mayorkas released the revised version of the I-9 Employer Handbook known as the M-274.  After reviewing the new release, the following is a summary of the additional guidance and answers to FAQs that we think you need to be aware of in order to continue to remain I-9 compliant as well as update your policies and procedures in relation to managing your I-9s.   

Is this a perfect employer handbook? … No — but it is improved and does address many of the questions that we hear from employers in our practice; i.e, questions about name changes, conditional resident status, how to handle H-1B portability, clarifying the Thursday Rule for when the employer must complete Section 2 of the form, and assistance in how to calculate and determine the I-9 retention date for separated employees. So, let’s get started with the issues that produce the most questions:

 Clarifying the Thursday Rule (Page 3)   The Handbook states that employers must review the employee’s documents and complete Section 2 of the form within 3 business days of the first day of work for pay, but not including the actual date of hire – or, Thursday if the employee begins work on Monday.

Clarifying Conditional Residency (Page 9)  Permanent Resident Cards with either an expiration (Conditional Cards) date or no expiration date are List A documents that should not be re-verified.  An example of the new Form I-551 Permanent Resident Card that was issued May 11, 2010 has been included in the examples of “reasonable” authorization documents

Name Changes (page 18)   An employer is not required to update the I-9 form when an employee changes their name, but may do so in Section 3.  The new Q&A section instructs that employers may accept a document with a different name than what is entered in Section 1 (due to married names, compound names, or misspellings) if the documentation presented by the employee reasonably relates to the employee and appears genuine.  USCIS further suggests that if the employer is not satisfied that the presented documents appear genuine and relate to the individual, to request additional documentation to assist in making the determination.  The employer may wish to attach a brief memo to the I-9 detailing the employee’s reason for the name discrepancy, including copies of any supporting documentation the employee chooses to provide; this is referenced on pages 41-42.  There is a reminder for government contractors required to comply with FAR E-Verify that a name change in the system triggers the completion of a new I-9 form under the FAR rule.

Interruptions in Employment (Page 20)    The Handbook now provides guidance to employers about whether a new I-9 form is required after an employee has had a brief interruption in employment.  The Handbook provides examples of continuing employmentsituations such as maternity or paternity leave,  leaves of absence, transferring from one business unit to another unit for the same employer, changing jobsite locations with the same employer.  An employer is not required to fill out a new I-9 form in these situations where there is an expectation of continued employment.

The Temporary Employment Authorization Tablehas been replaced instead with narrative content for refugees and asylees, employees in TPS status (Temporary Protected Status), exchange visitors (J visas), students (F and M visas), H-1B professionals and H-2A agricultural workers.  More on this below.

H-1B Employees Changing Employers (a/k/a “Portability” or an H-1B Transfer) – Page 17   The Handbook restores the ability to “port or transfer” and start working immediately for an employee in valid H-1B status who changes to a new employer upon filing an H-1B petition with USCIS.  The prior 2009 version of the Handbook required the porting H-1B employee t o obtain a Form I-797 receipt notice from USCIS prior to starting employment.  One of the benefits of H-1B portability is that the employee can start right away, so it’s good to see them finally get this right as it applies to the Form I-9.  Further guidance states that the H-1B employee’s Form I-94/I-94A issued for  employment with the previous employer, with the foreign passport, would qualify as List A documents.  You should write “AC-21” and record the date you submitted the I-129 Petition to USCIS in the margin of the I-9 form next to Section 2. 

Page 18 further states that “you should” retain the following documents with the Form I-9 to show that you filed for an extension of stay:  1) A copy of the new Form  I-129;  2) Proof of payment for filing a new Form I-129; and  3) Evidence that you mailed the new I-129 petition to USCIS.  No further guidance has been provided on when or if to re-verify the H-1B petition after it’s approved.   We recommend that you calendar re-verification of H-1B status based upon the dates provided on the I-797 USCIS  approval notice.

Extensions of Status (Page 17-18)   Guidance states that an employee with a petition for extension of status, timely filed before work authorization expires, are eligible for continued employment for up to 240 days beyond the expiration date of the authorization as long as the extension remains  pending.  Details are provided for how to complete the I-9 and the documentation to be attached for those in E-1, E-1, H-1B, H-2B, H-3, L-1, O-1, O-2, P-1, P-2, P-3, Q-1, R-1 and TN classification who have timely filed extensions with the same employer. 

For H-1B extensions, the employer should write “240-Day Ext” and record the date the employer submitted the I-129 Petition Extension to USCIS in the margin of the I-9form next to Section  2 (Page 17).  Further guidance is provided as to what documentation should now be attached to the I-9 form, as follows:

• A copy of the Form I-129 that was filed
• Proof of payment
• Evidence that the new I-129 Petition was mailed to USCIS
• After the extension is filed, USCIS will issue a receipt notice (Form I-797C) which should also then be added and retained with the I-9

Upon approval of the case, the employer should record in Section 3 the document title, number and expiration date listed.  The Handbook further states that the employer must give to the employee the Form I-94A attached at the bottom of the approval notice, which is evidence of the employee’s nonimmigrant status.

J-1 Exchange Visitors and M-1 and F-1 Students Changing to H-1B Status (“The Cap Gap”) – Pages 11-13   This section now includes details on how to complete Section 2 and confirms that the student’s employment authorization will remain valid through September 30^th of the calendar year for which the H-1B is filed, so long as the student’s H-1B status will begin on October 1^st.  The Handbook also informs that an employer must re-verify a student’s Form I-20.  The Form I-20 must show that the cap-gap extension was endorsed by the student’s designated school official.  Re-verification must be done no later than October 1^st.

I-9 Retention Calculator (Page 23)   The Handbook now includes an IRS retention calculator to help employers determine the retention date for terminated or separated employee I-9s.

Electronic Retention of the I-9 Form and Documentation of Electronic Storage Systems – What’s New?  (Page 24)   The Handbook expands guidance to employers that use paper, electronic systems or a combination of paper and electronic.  Employers must follow particular guidelines should they choose to retain their I-9s in an electronic storage system.  Employers who are currently using an electronic retention system or contemplating the future use of an electronic retention system should review the information outlined in the Handbook and consult with their immigration or attorney.

Employees with Temporary Protected Status (TPS)…Page 10   The Department of Homeland Security (DHS) may extend a country’s TPS designation by issuing a Federal Register notice that automatically extends expiring Employment Authorization.  A TPS employee may choose to present an Employment Authorization Document (EAD card) that is expired so long as it has been automatically extended.

 So, how do you determine if the TPS EAD card is a valid List A document?  There is now guidance on how to determine whether DHS has issued an automatic extension of expiring EADs, and how to explain that the status has been extended, as well as sample images of an EAD card that has been issued.  There is additional guidance on how to re-verify refugees and asylees.

Federal Contractors (Page 19)   The new Handbook provides  additional guidance to Federal Contractors about their responsibilities under the amended FAR related  to employment eligibility verification and states that the regulation requires contractors with a federal contract that contains the FAR E-Verify clause to use E-Verify for their new hires and all employees (existing and new) assigned to the contract.  Additionally, guidance is provided that where an employee working for a FAR employer undergoes a name change and the employer chooses to verify existing employees by updating existing I-9s, and then a new I-9 form must be completed.

Check out the new Q&A section on pages 37-49

For questions pertaining to the revised Handbook and how to implement the new guidance into your current I-9 policies and procedures, please contact our office.

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