Our monthly employer compliance newsletter where we review the I-9 form, the receipt rule and updating and reverifying the form, is now available and we link to it here.
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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 17th. 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):
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:
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.
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.
Following through on a campaign promise, Florida Governor Rick Scott signed four executive orders minutes after being sworn in, including one that requires all state agencies to use E-Verify, making it the first state to mandate E-Verify participation in 2011. Florida joins a list of 13 other states that have mandatory E-Verify laws or executive orders in place.
According to a press release from the governor’s office:
Executive Order No. 11-02 requires state agencies to use the E-Verify system to verify employment eligibility of state employees and contractors.
The Florida State Legislature, which convenes next week, is also expected to consider an Arizona-style immigration enforcement bill that would also require all employers in the state to use E-Verify. The bills are being drafted by Rep. Bill Snyder and Sen. Mike Bennett. This is fast approaching the Arizona question again… Can the state trump the federal government on immigration requirements?
It is worth noting that, Rhode Island’s Governor, Lincoln Chafee, rescinded Rhode Island Executive Order 08-01 that required the state as well as contractors and vendors doing business with Rhode Island to register and use E-Verify for all new hires. Chafee called the use of E-Verify a “divisive issue.”
So, what does this mean going forward for Florida’s State Agencies and employers, in general?
Prior to enrolling in E-Verify, you must undergo comprehensive I-9 training by skilled immigration counsel that maintains an active employer compliance practice so that your designated E-verify employees have a solid grounding in the law as it relates to the I-9 form and today’s complex issues concerning employment eligibility verification. The most well intentioned employees make mistakes and, if you’re like most employers, 30-50% of your I-9 forms may have issues that put you at risk. Half of the companies audited by Immigration and Customs Enforcement (ICE) get fined $110,000 or more.
Employers must recognize that this can mean civil and criminal liability to both themselves and their employers for charging untrained and inexperienced employees with the employment verification process.
You’re probably thinking …this could never happen to me and my company…we’ve reviewed our I-9 forms, done a self-audit and put policies in place for the management of our employment verification program. This thinking is understandable; however, untrained HR managers and assistants that try to correct or minimize their mistakes to save their jobs can lead to charges of document falsification, perjury and tampering.
Plainly put, this complicated one-page, poorly designed I-9 form has a 70-page government instruction manual! Performing a self-audit, with an untrained staff, can likely increase the possibility for penalties and fines.
Please have a look at our I-9 Employer Resource Center: www.I-9Audits.com , contact our office to discuss your concerns and sign up to receive our news and information.
USCIS has posted an Executive Summary of a listening session it hosted on November 2, 2010 regarding the Form I-9. The summary presents stakeholder comments, suggestions and concerns for how to improve the form itself and the overall I-9 process. There were many worthwhile suggestions that we hope USCIS will strongly consider.
In this climate of excessive worksite enforcement, we note that there was particular emphasis on USCIS providing better, more clear I-9 employer tools and support. Employers were also confused as to how to correct the I-9 form and who corrects what (which is covered in audits and training performed by qualified attorneys skilled in the area of employer compliance).
Should you wish to discuss your compliance concerns and issues, please contact our office. We also have an excellent employer compliance resource center that you can access at www.I-9Audits.com.
Employers can no longer afford to think that because they don’t hire foreign nationals, they don’t have any I-9 issues or need to comply with I-9 immigration regulations. The I-9 form is required documentation for all US citizens and non-citizens …every single employee must fill out an I-9 Form.
In our employer compliance audit practice, we find that every employer has I-9 violations, from minor clerical errors and unintentional mistakes, to document discrimination issues due to lack of training on I-9 regulations and document requirements.
Immigration attorneys, HR professionals, auditing firms and other professionals, if skilled in the practice area of employer compliance audits, could qualify as a viable vendor in handling I-9 audits, training and policy development.
There are a lot of do and don’t lists, blog postings, podcasts, free seminars and more on this topic which is why you should most particularly pay close attention as to whether or not the provider has a broad understanding of employer immigration compliance law and policy. Discuss with them their previous and current experience, can they answer your questions, what services do they provide, what solutions are they proposing to suit your specific needs, and what type of follow-up consultation do they provide post-I-9 project completion.
Immigration Solutions regularly represents clients from all industries in developing effective I-9 policies and compliance programs. We assist our clients proactively in establishing and maintaining effective corporate policies and procedures, before one of the five government agencies involved with enforcement knocks on your door.
The Justice Department announced on November 10th that it has reached a settlement agreement with Hoover Inc., a leading manufacturer of vacuum and carpet cleaners with facilities in Ohio and Texas, to resolve allegations that Hoover engaged in a pattern or practice of employment discrimination by imposing unnecessary and discriminatory hurdles in the I-9 process upon lawful permanent residents.
According to the department’s findings, Hoover required all permanent residents who presented a permanent resident card (green card) for I-9 purposes to produce a new green card when theirs expired. In contrast, Hoover’s U.S. citizen workers were not required to present new documents. Like U.S. citizens, permanent residents are always work authorized, regardless of the expiration of their documentation. The Immigration and Nationality Act (INA) prohibits employers from treating permanent residents differently than U.S. citizens in the I-9 process.
Under the terms of the settlement, Hoover has agreed to pay $10,200 in civil penalties. Hoover will also train its human resources personnel about employers’ nondiscrimination responsibilities in the I-9 process, and it will provide periodic reports to the department for one year. Here’s the Press Release
This is one of several recent settlements brought by the DOJ against employers that engage in document abuse. This occurs when employers treat employees differently based on national origin or citizenship status during the I-9 process.
What does this ruling mean for employers?
Although some I-551 Permanent Resident Cards have an expiration date, employment authorization continues and there is no need to reverify this document upon expiration. An expiration date on the Form I–551 reflects only that the card must be renewed, not that the bearer’s work authorization has expired, 8 C.F.R.§ 274a.12(a)(1). Further Question 39 on Pg. 36 of the M-274 Handbook states: You may not re-verify an expired U.S. passport or passport card, an Alien Registration Receipt Card/Permanent Resident Card (Form I-551), or a List B document that has expired.
Here are some examples of prohibited practices that fall under document abuse:
1) Setting different employment eligibility verification standards or requiring different documents based on national origin or citizenship status. One example would be requiring non-U.S. citizens to present DHS-issued documents like “green cards”
2) Requesting to see employment eligibility verification documents before hire and completion of the Form I-9 because an employee appears foreign or the employee indicates that he or she is not a U.S. citizen.
3) Refusing to accept a document or hire an individual because an acceptable document has a future expiration date.
4) Limiting jobs to U.S. citizens unless a job is limited to citizens by law.
5) Asking to see a document with an employee’s alien or admission number when completing section 1 of Form I-9.
6) Asking a lawful permanent resident to re-verify employment eligibility because the person’s “green card” has expired.
Should you have any questions, or know that your I-9’s have problems, be smart and proactive and contact an experienced professional in this field who knows the law and can assist you.
We have a terrific I-9 Resource Center for Employers and are available to design a cost-effective audit and training program to suit your particular needs.