We have heard similar stories such as this over the last few years.  The charges against Taqueria El Balazo stem from a 2008 incident in which U.S. Immigrations and Customs Enforcement (ICE)  agents raided 11 El Balazo restaurants and arrested 63 undocumented workers, drawing the ire of immigration advocates across the Bay Area.

According to the U.S. Attorney’s Office, they later re-hired at least 10 of the illegal employees after receiving written notification from U.S. Immigration and Customs Enforcement and Homeland Security investigators informing them of the employees’ identities. BIG mistake!

Proprietors of the restaurant chain behind Haight Street’s popular Taqueria El Balazo pleaded guilty to a series of violations surrounding immigration, social security, and tax evasion practices.  The owners  told the court they under-reported employee wages to the payroll company; they admitted that, based upon their actions, the amount of employment taxes paid to the Internal Revenue Service were understated, and admitted to hiring employees they knew were not legally allowed to work in this country. According to the plea agreement, between August 2007 and August 2008, they employed more than 100 illegal aliens.

Owners, Marino and Nicole Sandoval. are scheduled to be sentenced December 14^th and could face up to 20 years in prison and a half a million dollars in fines, according to San Ramon Express News. Sandoval’s brother, Francisco Sandoval, who owns and operates the restaurant chain with the couple, pleaded guilty to tax charges last August.

Taqueria El Balazo currently operates nine restaurants throughout the Bay Area in addition to its Haight Street outpost.

For more on this story:  http://www.sanramonexpress.com/news/show_story.php?id=4368

What do restaurant owners need to consider:

• Are you training your employees who are charged with employment eligibility verification?  How thorough are you when it comes to the I-9 process of employment verification?  It’s time to get serious about this.
• Have you been proactive and called for a Form I-9 Audit by a qualified and experienced immigration firm that specializes in this practice area?  We strongly recommend you consider this.
• Are you screening, coaching, training and counseling your employees to ensure compliance with immigration laws?

This is very serious business for all employers and is the major enforcement tool for the economic and political climate we are in at the present time.  The goal on both the state and federal level is to punish egregious employers and convince farmers, restaurant owners, clothing manufacturers, meatpackers and other employers to change their behavior.

Plain and simple, the national debate is heating up over mandatory E-Verify.  Some members of Congress seem intent on pushing the issue without taking into account the harm they will cause for American businesses and workers.  Now is the time to get your house, so to speak, in order.

The Department of Justice (“DOJ”) reported that it had reached a settlement with Brand Energy and Infrastructure Services and its subsidiary, Industrial Services LLC (ISI) on July 21, 2011. The DOJ reports that Industrial Services engaged in a pattern and practice of discrimination while completing Form I-9 on its non-citizen workers requiring specific employment documentation beyond what was required by law.

The investigation was prompted after a work-authorized immigrant lost his job when he could not comply with ISI’s request to provide specific employment documentation beyond what was required by law.   Further investigation revealed that ISI’s Prairieville, LA office required all newly hired non-U.S. citizens to present documents issued by the Department of Homeland Security upon hire.  The company did not require U.S. citizens to present any particular documents.

ISI has agreed to pay $43,560 in civil penalties and $7,200 in back pay, plus interest, to the injured party.   Brand and ISI have also agreed to monitoring provisions, as well as training for their human resources personnel.

What employers need to know: You just cannot presume that the employees charged with  managing your I-9 program are compliant with the law and adhering to anti-discrimination rules and regulations if you’re turning a blind eye to your compliance issues, the consequences of which today  are severe and expensive – not to mention the bad press that accompanies such an investigation. Employers must accept ANY acceptable document from List A that appears to be genuine and that relates to the worker, or a combination List B plus a List C document.  Additionally, employers are not to require more documentation than what is itemized on the List of Documents for Form I-9.

Let’s re-visit ICE’s list of best practices that include the following as a reminder to employers:

• Internal compliance & training program

• Polices/procedures safeguard against discrimination incl. training

• Require I-9 process only by those trained

• Secondary review for each I-9

• Annual I-9 audits by external auditing firm or trained person not involved in I-9 process

• Written I-9 policy

• Protocol to respond to tips/information/constructive knowledge

• Maintain copies of documents

• Participation in E-Verify/SSNVS

We are available  to assist you with your compliance  needs.  Please visit our Employer Resource Center and contact us should you wish to discuss our services and solutions.

Kinro Mfg. a subsidiary of Kinro Inc., which is wholly owned by White Plains, N.Y.-based Drew Industries Inc., has been fined a $25,000 civil penalty and $10,000 in back pay to the injured party for engaging in a pattern/practice of discrimination against work-authorized non-citizens in the employment eligibility verification process.  The company is a manufacturer of components for recreational vehicles and manufactured homes.

Kinro has also agreed to train its human resources personnel about employers’ responsibilities to avoid discrimination in the employment eligibility verification process, to produce Forms I-9 for inspection and to provide periodic reports to the DOJ for one year.

According to the department’s findings, the company subjected newly hired non-U.S. citizens to excessive demands for documents issued by the Department of Homeland Security in order to verify their employment eligibility, but did not require U.S. citizens to show any specific documentation . The charging party, a lawful permanent resident, filed his charge of discrimination after he was required to provide additional proof of his employment eligibility not required by law before he could begin work at the company.

View Press Release

Immigration Solutions August 2011 newsletter is now available, full of updates and information that you will find extremely useful.  This month we take a look at:

A story hit the news last week concerning a dispute between two electronic I-9 software providers where outsourcing I-9 software to a third party vendor was involved.  One of the parties wished to cancel its reseller agreement requesting that all I-9 data be returned to its customers.  In so doing, it was revealed that they would have to pay a rather high fee to obtain their customer’s I-9 data in a usable format.  Additionally, it was revealed that the 3^rd party provider had already been directly soliciting the other vendor’s clients to enter into a new I-9 and E-Verify service agreement.  Unable to resolve their differences, a lawsuit was filed on June 27, 2011, seeking an injunction to require the 3^rd party vendor, USVerify, to return its clients’ I-9 data in a reasonably usable and accessible format and to cease and desist from using or disclosing any confidential client information.

In light of the unraveling of this story, it brings clearly to the forefront the importance of being able to access your I-9 and E-Verify data because the employers who are customers of the vendor who is cancelling the reseller agreement, are unable to access their I-9 data at the present time. So, unless they have saved the data in another format or system, it can be assumed that if they were served with an ICE Notice of Inspection (NOI), they would not be able to comply with the NOI’s strict deadlines.

There are several I-9 software vendors in the marketplace, some good, some not.  This includes stand-alone providers that focus solely on I-9/E-Verify, in addition to “all-in-one” providers that offer electronic I-9 software that integrates with the employer’s personnel management software and employment screening/background check applications.

Apparently many all-in-one systems “outsource” the I-9 and E-Verify service to a third party vendor under a “reseller agreement.”  The reseller agreement governs the terms of use and other vital details regarding accessibility of the employer’s I-9 records. Given the rash of recent I-9 audits throughout the country, it is more important than ever for employers to very closely examine these arrangements to ensure that your best interests are protected.

It is not advisable for an employer to rely strictly on a vendor’s representations concerning their products and system compliance as these representations will not protect or insulate you from liability. Employers must undertake independent due diligence to ensure the system they choose complies with the applicable regulations.

If you are using a background screening provider, applicant tracking system, or all-in-one solution, it is imperative that you perform due diligence to ensure they you will have unrestricted access to your I-9 and E-Verify data, especially in the event the reseller agreement is terminated or if the you wish to terminate the agreement with your vendor.

We would recommend asking the following questions:

• Who owns the I-9 E-Verify data under the terms of the agreement?
• Can the employer request a backup of the electronic I-9 and E-Verify data at no or little cost?
• How often can the employer request such a backup and in what format will it be delivered?
• What happens if the vendor closes shop or decides to assign the data to another provider?

Lastly, we remind you that there are specific regulatory electronic I-9 requirements that affect almost every aspect of a vendor’s system and relationship.  These requirements are often confusing and unclear, and you should be encouraged to discuss these issues with experienced immigration counsel to ensure that your I-9 electronic system is compliant with enforcing agencies in all respects.

The American Immigration Attorneys Association (AILA) published an excellent article on the Minimum Requirements for Electronic Verification.  View article

Contact our office should you have any concerns that you’d like to discuss concerning this issue.

With a 2nd wave this year of Notices of Inspection (NOI’s) sent to employers across the country, and I-9 administrative audits being ICE’s driving force in determining whether an employer is adhering to employment laws –  it is a costly mistake for employers to presume that they can fly under ICE’s radar.  An ICE investigation can be triggered at any time by SSA No-Match letters, a tip from a disgruntled employee, a terminated employee, a customer, a competitor, or other “concerned citizens.”

With the above being said, we thought this would be a good time to review exactly what takes place when an employer is served with an NOI – starting with immediately contacting an attorney that specializes in employer compliance matters. Not all immigration or corporate attorneys do…so do your homework, or just call us.

Employers are allowed by law 3 days notice to respond by producing the I-9 records and other requested information.

The administrative inspection process is initiated by the service of a Notice of Inspection (NOI) upon an employer compelling the production of Forms I-9. Often, ICE will request the employer provide supporting documentation (an invasive Document Subpoena), which may include requests for a copy of your I-9 Compliance Policy, Employee Roster, copies of Payroll Summaries, I-9 forms for current and terminated employees, Quarterly Wage and Hour Reports, SSA Mismatch correspondence,   E-Verify and/or SSNVS documents, Articles of Incorporation, and business licenses.

ICE agents or auditors then conduct an inspection of the Forms I-9 for compliance. When technical or procedural violations are found, pursuant to regulations at INA §274A(b)(6)(B) (8 U.S.C. § 1324a(b)(6)(B)), an employer is given ten (10) business days to make corrections. An employer may receive a monetary fine for all substantive and uncorrected technical violations. Employers determined to have knowingly hired or continued to employ unauthorized workers will be required to cease the unlawful activity, may be fined, and in certain situations may be prosecuted criminally. Additionally, an employer found to have knowingly hired or continued to employ unauthorized workers may be subject to debarment by ICE, meaning that the employer will be prevented from participating in future federal contracts and from receiving other government benefits.

Monetary penalties for knowingly hiring and continuing to employ violations range from $375 to $16,000 per violation, with repeat offenders receiving penalties at the higher end. Penalties for substantive violations, which includes failing to produce a Form I-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers the size of the business, good faith effort to comply, seriousness of violations, whether the violation involved unauthorized workers, and history of previous violations, amongst other factors.

ICE will notify the audited party, in writing, of the results of the inspection once completed. The following are the most common notices:

Notice of Inspection Results – also known as a “compliance letters,” used to notify a business that they were found to be in compliance.

Notice of Suspect Documents – advises the employer that based on a review of the Forms I-9 and documentation submitted by the employee, ICE has determined that the employee is unauthorized to work and advises the employer of the possible criminal and civil penalties for continuing to employ this individual. ICE provides the employer and employee an opportunity to present additional documentation to demonstrate work authorization if they believe the finding is in error.

Notice of Discrepancies – advises the employer that based on a review of the Forms I-9 and documentation submitted by the employee, ICE has been unable to determine their work eligibility. The employer should provide the employee with a copy of the notice, and give the employee an opportunity to present ICE with additional documentation to establish their employment eligibility.

Notice of Technical or Procedural Failures – identifies technical violations identified during the audit and gives the employer 10 business days to correct the forms. After 10 business days, uncorrected technical and procedural failures will become substantive violations.

Warning Notice – issued in circumstances where substantive verification violations were identified but circumstances do not warrant a monetary penalty and there is the expectation of future compliance by the employer.

Notice of Intent to Fine (NIF) – may be issued for substantive, uncorrected technical, knowingly hire and continuing to employ violations.

We’d like to close with emphasizing the importance of creating an I-9 compliance policy that is integrated with your overall personnel policy.  A comprehensive written policy will help establish guidelines for all employees to follow, will establish good-faith efforts towards compliance, and potentially could mitigate penalties.  A company should also designate an overall I-9 compliance administrator. To ensure consistency, designate one person who is charged with centralized oversight, management, and training of the company’s compliance program.  To provide guidance to hiring managers about I-9 procedures, managers should know who must complete Form I-9; when and how to conduct verification; what permissibly may be asked prior to the actual hiring; what limits may be placed on hiring of certain individuals; what, how, and for how long I-9 records should be maintained.

.. We link to an inspection process chart that is a good illustration of the various steps in the NOI process

.. We also link to a copy of an ICE NOI and a Document Subpoena

.. For a list of I-9 Technical and Substantive Violations

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 considerably 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 program.  Visit our I-9 Resource Center here

In our June Newsletter we cover what’s new in employer compliance:  New I-9 Employer Handbook, new Q&A for I-9 and E-Verify, the new E-Verify RIDE interface and other information to assist you with staying current and developing a compliant workforce.

For more information regarding our services, please contact our office, 562 612.3996 or via email at info@immigrationsolution.net.

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.

At least two dozen employees were arrested March 4th after deputies raided four Pei Wei restaurants and its corporate headquarters in Scottsdale.  Maricopa County Sheriff Joe Arpaio had warrants for 120 employees who were suspected of identity theft.

Just how bad can it get?  Unfortunately pretty bad.  At the corporate headquarters, boxes of documents and computer databases were seized.  Arpaio said the investigation began in June 2010 after the sheriff’s office received a tip that several employees were illegal immigrants.  The investigation showed that most of the victims whose identities may have been stolen live out of state; eight of them are children under the age of 12 and four of them are dead.

Arpaio stated, “That’s one thing that makes this operation unusual. People apparently are fed up with the ID theft problem and the problems ID theft causes and are willing to help law enforcement to ensure the successful prosecution of this kind of crime.”

Pei Wei Asian Diners are operated by publicly held P.F. Chang’s China Bistro Inc   P.F. Chang’s operates about 170 Pei Wei locations nationwide and more than 200 P.F. Chang’s China Bistros.

It is estimated that a Pei Wei restaurant can generate up to $2 mil/year in sales.  The prolonged closure of a number of locations is costing the company a significant amount of money and the media coverage is tremendously damaging including a loss of prestige and community standing.

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. This is a wake-up call to anyone who thinks E-Verify is an effective remedy to stop identity fraud.  E-Verify doesn’t have the proper protections and safeguards in place for detecting it.

Secondly, if you own and operate a chain of restaurants, it’s time to be proactive and get your I-9’s in order and secure the services of a 3^rd party audit team who are skilled in handling employer compliance issues.  You must carefully review your systems and procedures around I-9 processing and management at all of your locations, particularly if you are a multi-site employer – including corporate headquarters.

For more on this story.

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