By:  Timothy Sutton, Communications Editor

In the USDOJ published decision United States v. Four Seasons Earthworks, ICE made it clear that with respect to form I-9 compliance, late is not any better than never. Four Seasons failed to pass an ICE audit that found incomplete form I-9 List A and List C information. The company asserted they obtained every employee’s social security number and maintained supporting documents (like military IDs and birth certificates) necessary to verify employment eligibility. ICE’s response was terse, “Late production nevertheless does not absolve the respondent from liability.”

Securing qualified employees can be stressful. Once a worthy recruit is hired, employers may be anxious to have the new-hire begin working even before they secure the required documentation to complete the I-9 form. Improper documentation constitutes a violation under the INA. In it’s investigation of Four Seasons Earthworks, the ICE Forensic Auditor calculated penalties based upon the following formula:

 Number of Violations divided by the total number of current & former employees up to inspection date = % of base fine

Additionally, 5% increases for bad-faith or serious violations are tacked on to penalties. The number of undocumented workers, the size of a business, and previous violations are also considerations that increase penalties.

Thankfully, an employer’s good faith attempt to comply with obligations can influence a penalty reduction. ICE views hiring violations on a continuum, recognizing violations vary in severity. If your company finds itself in a similar situation with employees who are not properly documented, hiring immigration compliance professionals may greatly reduce your chances of incurring audit-initiated penalties. Contact us for support in planning and implementing legally sound solutions to protect your company’s future:  562 612.3996 | info@immigrationcompliancegroup.com.

By:  Timothy Sutton, Communications Editor

“Homeland Security Investigations is committed to holding businesses and their managers accountable when they knowingly hire an illegal workforce,” –John Kelleghan, Special Agent in charge of HSI Philadelphia.

Homeland Security, the FBI, and ICE did much more than hold GPX/GPX, USA, a seismic surveying company and their field supervisor, Donald Wiggill, “accountable,” by charging the company with a total maximum fine of $10 million, a probation term of five years on each count, and a special assessment totaling $8,000; Wiggill faces an unconscionable indictment of 100 years in prison on all 20 counts, a fine of $5 million, a supervised release term of 60 years, and a special assessment of $2,000. The Texas based company failed to verify the immigration status of nineteen employees and did not prepare the required Form I-9 and supporting documentation concerning the immigrants’ authorization to work in the United States.

John Kelleghan of Homeland Security further justified the Philadelphia HSI decision to levy such harsh punishment for I-9 non-compliance saying, “HSI and our law enforcement partners will continue to ensure that employers follow our nation’s hiring laws, which ultimately protect job opportunities for the nation’s legal workers, and levels the playing field for those businesses that play by the rules.”

The proportionality of the punishment sought for the crime is extremely shocking. Our blog has recently covered the penalties imposed upon, HerbCo, Chipotle, and most recently ABC Tree Professionals, which pale in comparison to the punishment GPX is now facing.

GPX is being treated like a national security threat for mishandling nineteen employees Form I-9s. The difference between thousands of dollars versus millions of dollars in fines, in addition to 100 years of jail time, is the involvement of the FBI and the Homeland Security. GPX is charged with harboring and transporting illegal aliens and conspiracy to commit those offenses as outlined in an indictment by the U.S. Attorney for the Middle District of Pennsylvania, Peter J. Smith. Whether GPX was honestly aware of their employees’ immigration status is still unknown, however proper planning and implementation of I-9 compliance would have saved the company millions in civil penalties and avoided a hundred years of jail time. With the stakes elevated so tremendously high by this multi-departmental crackdown on workforce compliance –  who can afford not to get their legal documents in order?

To protect your business and your employees please contact one of our immigration professionals at info@immigrationcompliancegroup.com or call 562 612.3996.

By:  Timothy Sutton, Communications Editor

For the Houston based ABC Professional Tree Service, Inc., firing non-compliant workers and implementing E-Verify was too little too late. Even after implementing E-Verify and firing hundreds of workers following an ICE audit in 2008, the Immigration Customs Enforcement agency of the Department of Homeland Security recently announced reaching a $2,000,000 non-prosecution agreement with ABC. Shockingly, the sum was based upon ICE’s estimation of profits ABC earned through illegal labor practices.

After four years of investigation, ICE did not release how the $2,000,000 figure was reached. However, they did release an estimate that up to 30% of the 2,500 ABC employees were illegally employed. In a press release on May 18, 2012, ICE espoused ABC knowingly employed illegal workers after receiving “no-match letters” from the Social Security Administration. Additionally, on March 4, 2010, two years after the initial audit, ICE seized records from the ABC Birmingham office through a federally issued warrant. Undocumented employees in the Alabama office and working in the field were detained.

Typically Form I-9 violations lead to heavy monetary penalties, but in this case ICE chose to cut a non-prosecutorial deal. It is unclear from the information released whether or not the $2,000,000 sum is more or less than ABC would have faced in fines? But more importantly, businesses like ABC who are subject to years of audits and investigations, despite implementing E-Verify and discharging employees, have little bargaining power. Consequently, the best defense against an ICE audit is total compliance. Employers would be wise to hire a professional consultant to train staff, organize existing documentation and manage future non-compliance issues. The Immigration Compliance Group has the experience and resources necessary to protect your business from an ICE audit.  Contact one of our immigration professionals at info@immigrationcompliancegroup.com or call 562 612.3996.

By:  Timothy Sutton, Communications Editor

Since February of 2011, the U.S. Department of Homeland Security, Immigration and Customs Enforcement, as well as the office of the U.S. Attorney for the District of Columbia, have been conducting investigations into Chipotle Mexican Grill’s compliance with employee work authorization laws and regulations. On May 17, 2012, Chipotle received a subpoena from the U.S. Securities and Exchange Commission, requesting information regarding compliance with employee work authorization requirements, related public statements and other disclosures.

Failing their initial ICE audit exposed Chipotle to the SEC violations under investigation. Even though a year has passed since the company released immigration compliance disclosures to their investors, the current SEC investigation may lead to further fines and federal litigation. In February of 2011, the company filed a Form 8-K with the SEC stating,

“Our business could be adversely affected by increased labor costs or difficulties in finding the right employees for our restaurants.” Unauthorized workers are subject to deportation and may subject us to fines or penalties, and if any of our workers are found to be unauthorized our business may be disrupted as we try to replace lost workers with additional qualified employees. We could also experience adverse publicity arising from immigration-related enforcement activity that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.”

The current SEC investigation has reopened the wound left by the ICE audits Chipotle endured over the past two years.  Following the ICE raids of 2010, Chipotle restaurants in Minnesota were issued a Notice of Suspect Documents identifying a large number of employees who appeared not to be authorized to work in the U.S. Employees who were unable to provide valid work eligibility documents were terminated. In December 2010, DHS requested work authorization documents for employees in the District of Columbia and Virginia. At that time, Chipotle filed a statement with the SEC in a Form 10-K stating:

“We believe our practices with regard to the work authorization of our employees, including the review and retention of work authorization documents, are in compliance with applicable law. However, the termination of large numbers of employees does disrupt our operations and results in a temporary increase in labor costs as we train new employees. It is not possible at this time to determine whether we will incur any fines, penalties or further liabilities in connection with these matters.”

The Department of Homeland Security, ICE, and the SEC’s investigation of Chiptole, sends a strong message to American employers that the U.S. government is relentless in its efforts to penalize employers of illegal aliens. ICE audits open the door to immigration, tax, and labor investigations that can cost employers (companies of all sizes – both private and public) millions in fines. In particular, this is a strong message to publicly held corporations that you must  take care now more than ever to ensure workforce compliance to avoid falling victim to an SEC probe.

As the mountain of immigration compliance trouble casts a shadow over Chipotle’s recent financial successes, further fines, penalties and liabilities levied by the SEC are sure to follow. For more updates on this matter subscribe to our RSS feed and for more information on how to avoid ICE audits and SEC investigations contact one of our immigration professionals at info@immigrationcompliancegroup.com or call 562 612.3996.

By:  Timothy Sutton, Communications Editor

The Hamilton Project, at the Brookings Institution held a forum on U.S. immigration on May 15, 2012. US Davis Economist, Giovanni Peri, purposed a radical overhaul to the entire immigration system. In short, Peri proposed a national auction system wherein employers bid for employee visas and proceeds of these sales fund local healthcare and education. The auction prices would be set with a reserve to ensure a minimal guaranteed income stream. Uncapped, the market would dictate the number of visas issued annually. This proposal seems to find a common ground between business needs and government regulation, benefiting the low-skilled labor market.

Auctioning low-skilled labor visas should help reduce the population of roughly 11.5 million illegal immigrants. Employers will be able to hire a legal workforce up to the point where auction prices for visas offset low wage savings. At that time, I-9 audits and workplace raids should continue to deter further hiring of illegal immigrants. This larger, stable and legal temporary workforce will help stabilize the economy. Changes are welcomed for companies like 3M that recently experienced a “brain drain.” 3M has been outsourcing science and technology jobs to Asia, citing the instability of the low skilled labor market they rely on to support their laboratories, manufacturing, research and development.

While Peri’s proposals are likely years away from actually being introduced into legislation, public officials like Senator John Cornyn continue to push for business friendly immigration. Senator Cornyn recently introduced legislation that would add 85,000 H-1B temporary visas issued annually to foreign-born engineers, mathematicians, scientists and other high-tech workers. Cornyn reminded the Senate, “We have to remember how this country was built. All of us are sons and daughters of immigrants that showed up here and made our way. We’ve cut off that flow.”

For continued coverage of proposed immigration reform and legislation, as well as the latest developments in immigration politics, subscribe to our blog and immigration and I-9 newsletters here.

Interested in staying current with I-9/E-Verify news and issues?  Check out our group on LinkedIn.

Please see our attached brochure and contact our office to discuss your compliance needs.  Our talented staff can walk you through our customized services and solutions.

By:   Timothy Sutton, Communications Editor

State legislatures in Kansas recently voted down a bill that would mandate all employers utilize the E-verify employment verification system. The federal government currently encourages employer’s voluntary participation in E-verify under the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). Although there are numerous benefits to participating in E-verify, blanket mandates burden all businesses regardless of size and resources. Legislatures across the country are proposing these mandates in an attempt to target employers who wish to remain “willfully blind” to their employees immigration status. The Kansas bill proposed excluding contractors who did not participate in E-verify from bidding on government contracts valued at $50,000 and above. When the bill failed by a vote of 84-35 businesses across the state heaved a temporary sigh of relief. Kansas will likely see this bill return in the near future, as the main deterrent for passing the bill was a lack of time and resources to adjust the state budget that takes effect on July 1, 2012.

Employers should be aware that although the federal government controls immigration laws, states are currently placing additional restrictions on employers adding additional layers of compliance measures aimed at reducing illegal immigrant populations. Controversial immigration laws passed by the state of Alabama, which mandate employer’s participation in E-verify, have sparked lawsuits by the Obama administration. Various industries are hit hard by such mandates including the agricultural industry.

Numerous farmers have prepared for a significant reduction in available labor by planting crops that can utilize machines to perform the work in place of immigrant laborers. H.B. 87, which recently passed in the state of Georgia, requires that all public employers and private employers utilize E-verify in advance of securing business licenses and permits. While these mandates appear to keep employers “honest,” in their hiring practices, they come at both an economic and social cost. Businesses bear the economic burden of compliance while minority populations pay the social cost of increased racial discrimination.

Mandates create an additional layer of workplace compliance that many small businesses lack the manpower and training to adhere to. Additionally, workplace verification screening without proper guidance by attorneys or employment specialists may lead to an increase in discriminatory employment practices. In light of the growing trend of state laws mandating E-verify participation, employers are encouraged to seek trained professionals for training and education on compliance with the law. For more information contact one of our immigration professionals at info@immigrationcompliancegroup.com or call 562 612.3996.

By Timothy Sutton, Communications Editor | Immigration Compliance Group

 Amendments to The Racketeer Influenced and Corrupt Organization Act (RICO) in 1996 expose businesses to civil liability for knowingly hiring illegal workers. RICO was originally enacted to protect businesses from the influence of the mafia by allowing private enforcement of sanctions against violators of racketeering laws. Today, if a business employs illegal workers both (1) private individuals who are directly and adversely affected by loss or depression of wages due to employment of illegal workers and (2) businesses who are proximately harmed by a direct competitors employment of illegal workers may seek monetary sanctions including attorney’s fees under RICO. Simply, if you are employing illegal workers, your legally employed workers and your direct competitors may sue you for racketeering.

In Trollinger v. Tyson Foods, Inc., legally authorized workers filed a civil RICO class action against Tyson claiming the company and its recruiters had violated the INA by entering into an illegal hiring scheme to pay illegal aliens lower wages to increase profits. The workers claimed that their own wages had been depressed by Tyson’s immigration violations. Tyson prevailed after six long years of civil litigation because the plaintiff’s failed to establish a sufficient causation of their lost wages by Tyson’s hiring of illegal workers. However, this case set out the framework for employees to bring a lawsuit against their employer for hiring illegal workers under RICO.

Because the government holds private businesses accountable for enforcing immigration laws through I-9 compliance, E-verify and various Federal statutes, workplace compliance is essential to protecting your business. Businesses, not illegal workers are held accountable for fraudulent documents, misrepresentations of citizenship, and discriminatory hiring practices.

As “gatekeepers,” of immigration enforcement, employers have a de-facto duty to prevent illegal immigrants from securing employment. To ensure that your business is prepared for RICO lawsuits, ICE audits, and OSC hiring discrimination claims, contact one of our immigration professionals at info@immigrationcompliancegroup.com or call 562 612.3996.

Our Employer Resource Center is very informative – check it out.

We had the ICE IMAGE Training and Forum in Los Angeles last week on May 3rd where they explained the benefits of the IMAGE Program and followed up with releasing all the Powerpoint Presentations through email after the event.  They have made some excellent information available to the public on their website; namely:

1. An HSI I-9 Presentation
2. An IMAGE HSI Presentation
3. OSC IMAGE Event Presentation
4. Self Check User Presentation
5. E-Verify Presentation

We felt that their perspective on the above topics was critical information to  be shared and analyzed alongside your other resources.  They can be accessed here.

Please know that we are available to assist you with your compliance program and offer practical and sustainable services and solutions to assist you in establishing a compliant workforce.

By:  Timothy Sutton, Communications Editor

Like many successful restaurant managers, I worked my way up from the bottom of the employee food chain. That meant with each promotion from bus boy to manager, I was trained by other employees on how to do my job. By the time I became a General Manager, I erroneously believed that being a good manager meant being able to follow established procedures. I soon discovered that this was actually a recipe for disaster.

Auditioning a new waiter is a common practice in the restaurant industry. This entails observing an applicant voluntarily interacting with customers, taking orders, serving food and working with other employees. Typically, the audition ends with a free meal in exchange for the waiter’s time and parking validation if the restaurant is generous. Throughout the industry, restaurateurs believe that this practice limits their liability because the applicant has not yet become an employee in “volunteering,” their time to audition for the job.

However, the M-274 Handbook For Employers instructions on completing form I-9 (Employment Eligibility Form) classifies this practice of meals and parking reimbursement as remuneration: anything of value given in exchange of labor or services, including food or lodging. Because restaurant managers typically train one another on hiring practices, there is a perpetual false belief that auditioning waiters is a healthy hiring practice. According to the M-274, the work done in exchange for the value of a meal exposes restaurants to form I-9 non-compliance fines. Essentially, the audition becomes Day One of employment, which requires I-9 forms to be completed and retained.

If the applicant is not hired, both Section 1 and 2 of the I-9 form must be completed that same-day in order to comply with rules regarding employees retained for three-days or less. Without the proper knowledge and training on these I-9 compliance issues, managers expose their companies to thousands of dollars in fines by auditioning waiters. A successful manager goes beyond following the established procedures by having the foresight to seek professional guidance to ensure that company employment practices are in accordance with the law.

For fresh insight into how your business’s employment practices can become a recipe for success contact our office at info@immigrationcompliancegroup.com or call 562 612.3996.

Please refer to our informative Employer Resource Center for more, and here for a list of our services and solutions.