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.

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.

We are frequently asked this question in our practice and what the differences are, what can and cannot be corrected.  Please refer here for more information on the subject.

Should you have any questions or would like to discuss your employer compliance needs, please contact us:  562 612.3996 … info@immigrationsolution.net

Our I-9 Employer Compliance Website is full of excellent information – take a look around:  www.I-9Audits.com.

1)         You’ve had a turnover in the HR position(s) charged with the responsibility of handling and processing I-9 Forms

2)         None of the staff charged with the I-9 process has been formally trained

3)         You already know that you have I-9 document violations, errors and unintentional mistakes

4)         You have recently gone through a corporate reorganization, merger or acquisition

5)         You know you have an on-boarding process that is complex, such as multiple jobsite locations where the I-9 process takes place

6)         When you haven’t documented your I-9 Form policies and procedures in a policy statement or procedures manual

7)         If you have a large volume of foreign worker I-9 forms

8)         If you do not have a tickler system for re-verification or  terminated employee retention

9)         If you do not have  a centralized I-9 recordkeeping process

10)       If you are photocopying documents presented during the I-9 process for some and not for others

11)       You participate in government contracts and have been asked to perform an I-9 audit

12)      You’ve never performed a self-audit or had any outside provider perform an I-9 audit

13)      You do not know how to make corrections to the I-9 form

14)      You’ve received SSA No Match Letters

15)      Your industry is being targeted by ICE

16)      You don’t know that new I-9 guidance was released by USCIS this year

Immigration Solutions regularly represents clients from all industries to develop effective I-9 policies and compliance programs.  By establishing and maintaining effective corporate policies and procedures, many of the above-mentioned warning signs can be addressed proactively in an audit before the government does one for you.