Employer Compliance 2015

A No Hype Overview of Immigration Compliance for Employers

Tony Weigel

Weigel Law Office, LLC

Immigration & Nationality Law

Weigel Law Office, LLC Immigration & Nationality Law

Presentation Outline

• Immigration-related Requirements Applicable to All Employers

• Civil/Administrative Penalties for Compliance Violations• Potential Criminal Charges and Penalties for More Serious

Compliance Violations

• Enforcement Processes and Patterns• Additional Immigration-related Compliance Requirements for

“Sponsoring” Employers

• Meeting Compliance Challenges

• Options for Assessing and Improving Compliance

• Questions & Answers

Historical Context

• Prior to November 7, 1986 – No obligation to check immigration status, verify identity information, or complete any forms for purposes of employment authorization

• Employment of Unauthorized Workers was exempted from criminal law (harboring) under the “Texas Proviso”


Immigration Reform and Control Act of 1986

• Known as “IRCA”• Placed requirements on employers to verify

identity and work authorization of employees, starting in Nov. 1986

• Also requires maintenance of verification efforts• Prohibits knowingly employing unauthorized

workers and certain actions that constitute unlawful discrimination


IRCA – Relevant Legal Standards

• Standard of document review – 8 C.F.R. §274a.2(b)(ii)(A)– The document(s) presented should

reasonably appear to be genuine on its face– It should appear to relate to the person

providing it

– In some instances, the government focuses on patterns of documents presented over a period of time (ex. Puerto Rican birth certificates)


IRCA – Relevant Legal Standards

• “Knowledge” of unauthorized work status– Can be actual or constructive– Actual knowledge – Employee states “I am

not legal to work in the U.S.”– Constructive – May be fairly inferred through

notice of certain facts and circumstances which would lead a person, through the exercise of reasonable care, to know about a certain condition (ex. not legal to work in the U.S.)


IRCA – Two-Page I-9 Form

• All employers required to use the 2-page form starting May 7, 2013

• Form is 2 pages, so consider using 2-sided copies for record-keeping purposes

• Section 1 asks for an employee to provide phone numbers and e-mail addresses, which are optional

• Section 1 for non-citizens became more complicated– USCIS & Alien Numbers are the same thing– I-94 records – Can either be a card or new print-out

• The M-274 Manual was updated for use with new form (http://www.uscis.gov/files/form/m-274.pdf)


IRCA – Section 1 of I-9 Form

• Must be completed by end of the first day of work• Employee provides his or her full name; maiden name, if

applicable; current address (street, city, state and zip); and date of birth

• Completion of the Social Security Number is optional, but mandatory if the employer utilizes E-Verify

• Completion of one of the status categories and insertion of additional information (Alien #, Admission #, and expiration date, if applicable)

• Someone may assist the employee if in need of assistance or translation, but must sign and date the form and provide name and address information


IRCA – Section 2 of I-9 Form

• Must be completed within 3 business days of the first date of employment, unless employment is for less than 3 days, then it must be done on the 1st day

• After employee provides either a document from List A or one document from List B and List C, the employer must review the documents

• Employer records the document title, issuing authority, document number, and expiration date for each document, as applicable

• Employer must insert the date the employment began in the certification block, sign and date the form, and insert name, title, business name and address information


IRCA – Section 3 of I-9 Form, Rehires• Option exists to do a new form or re-use prior form

• If rehire is within three years of the date the existing Form I-9 was completed, then the employer must check whether or not the person’s work authorization has expired

• If the work authorization has not expired, then the form can be updated on the date of rehire by inserting the date of rehire and signing and dating that section

• If the work authorization has expired, then the employee must provide a valid List A or List C document and employer must record the date of rehire, document title, number, expiration date (if any), and sign and date the form.


IRCA – Section 3 of I-9 Form, Reverification• Reverification is required if an existing employee initially

presented temporary work authorization documents

• Must be done before the expiration date on those documents

• The employee must provide a valid List A or List C document and the employer must record the document title, number, expiration date (if any), and sign and date the form

• Option exists to use Section 3 or portions of a new I-9 form (inserting employee’s name in Section 1 and completing Section 3 of the new form)


IRCA – Section 3 of I-9 Form, Updating

•Employers are not required to ‘update’ I-9 forms if an employee’s name changes

•Exception: the employee’s name has changed since the initial form was completed upon either rehire or reverification of work authorization



Administrative Penalties for Violations

• Failure to properly complete, retain or present an I-9 Form: $110 to $1,100 per form

• Knowing hire or continuing to employ an unauthorized worker: $375 to $16,000 per unauthorized worker

• Debarment from federal contracts for hiring or continuing to employ unauthorized workers


Administrative Penalties - Statistics• 2003-2008 Statistic

– $1.5 million• 2009-2012 Statistics

– 9,140 inspections– Final fine orders totaling $31.2 million

• 2013 Statistics – 3,127 worksite enforcement investigations – 452 criminal arrests, 179 owners, managers, supervisors or HR

employees

– ICE issued 637 final fine orders totaling $15.8 million– Debarred a record 277 businesses and individuals

• 2014 Statistics– 1,327 inspections– 638 final fine orders totaling $16 million

• 2015 – Fines on pace to total $16 million for Fiscal Year


I-9 Related Penalties – Citizenship Discrimination

• An employer may not unlawfully discriminate: on the basis of an individual's national origin or citizenship status, by requesting more or different documents, or by refusing to honor acceptable documents

• $375 to $16,000 potential fines per charge and other costs:

Back-pay, Attorney Fees, Training, Monitoring and Oversight• In recent years, the government has pursued employers for engaging in a

“pattern or practice of citizenship discrimination by imposing unnecessary and discriminatory hurdles to employment for work-authorized individuals.”

• Penalties:– Over $250,000 in fines in some cases, plus back-pay for employees– Notification, identification and back-pay to additional individuals– Training, reporting and oversight mandates impacting everyone from HR

clerks to top management


I-9, Administrative Audits• Since 2009, there have been an increasing number of

administrative audits of employers’ I-9 records across the U.S. conducted by the U.S. Department of Homeland Security, Immigration & Customs Enforcement (ICE)

• ICE has primarily issued fines for failures to properly complete and retain I-9 records

• Once audited, employers are sometimes re-audited within 6 to 12 months

• Some cases have led to criminal investigations and prosecutions

• Almost every audit is complaint-based from either a local source or by direction of upper-level ICE personnel


I-9, Administrative Audits• Audit Stages

– Notice of Inspection

– Notice of Suspect Documents/Discrepancies

– Notice of Substantive or Technical Violations

– Notice of Intent to Fine

– Administrative Hearing


I-9, Administrative Audits• Notice of Inspection

– Notice is served with a Subpoena for I-9 and related business records

– Response period, 3 business days, sometimes a bit more– Employers can/should work with legal counsel to submit

documentation in best possible state– After documents are submitted, it may take 1 to 3 months for an

initial response from ICE– In some cases, ICE may ask for more documents and

information– The goal is to provide ICE with enough information to conduct

the audit, but not more than is required


I-9, Administrative Audits• Notice of Suspect Documents/Discrepancies

– ICE will run all information through its databases, mainly from the I-9 forms and supporting documents

– Some of the information will result in a list of employees with ‘suspect documents,’ meaning the information is not valid

– Some of the information may not match up, meaning there are ‘discrepancies’

– ICE’s Notice will identify individuals and provide a time period for the employer to conduct one-on-one follow up regarding the Notice information

– Some employees may be able to clear up any issues regarding work authorization, but most are not and their employment is usually terminated


I-9, Administrative Audits• Notice of Substantive or Technical Violations

– Notice is served identifying violations related to specific employees’ I-9 forms

– If technical, employers are provided a 10-day period to correct forms and avoid fines

– If substantive, ICE will issue fines according to its matrix

– Many audits involve discussions arguing that substantive violations are instead technical


I-9, Administrative Audits• Notice of Intent to Fine

– Notice is served with a count-by-count statement of violations and fines per violation

– Employers have 30-days to attempt to negotiate a reduction in charges and/or fines

– Employers have the option to request an administrative hearing to contest the charges and/or fine assessments, but it is a use it or lose it provision, meaning failure to request a hearing within 30 days forecloses the option of a hearing

– ICE typically maintains that the most it can reduce fines is by 25% of the matrix amounts

– Depending upon the facts and the employer’s preference, it may make sense to go to an administrative hearing


I-9, Administrative Audits• Administrative Hearing

– Before an Administrative Law Judge

– Involves standard types of discovery and motions associated with court cases, which can mean more attorney fees

– Cases can still be settled if beyond the 30-day period, post-Notice of Intent to Fine

– Employers and their counsel should carefully evaluate trends in administrative cases

• Some may be very favorable in fine negotiation• Others may seem applicable, but really aren’t• Trends can change in favor of the government too

The Criminal Side of I-9 Compliance

There are three critical aspects to keep in mind:

•There are specific criminal statutes that apply to all employers

•Criminal actions against employers do occur

•A high percentage of employers are not engaged in activities that warrant a criminal investigation or prosecution



Commonly Used Statute:•8 U.S.C. §1324a(f)(1) Prohibits engaging in a “pattern or practice” of knowingly hiring or continuing to employ unauthorized workers

Potential Penalties:•Fines up to $3,000 for each unauthorized worker, imprisonment for up to six months for the entire pattern or practice, or both.•Criminal misdemeanor charge



Commonly Used Statute:•8 U.S.C. §1324(a)(1)(A)(iii), General “harboring” – attempt to or actually conceal, harbor, or shield from detection an unauthorized alien

Potential Penalties (8 U.S.C. §1324(a)(1)(B):•Basic: Fines or imprisonment up to 5 years, or both;•If done for commercial or private financial gain: Fines or imprisonment up to 10 years, or both;•Enhanced penalties if action results in injury or death



Commonly Used Statute:•8 U.S.C. §1324(a)(3)(A), Prohibits knowingly hiring for employment, during any 12-month period, at least 10 individuals with actual knowledge they are not work authorized

Potential Penalties (8 U.S.C. §1324(a)(1)(B):•Fines or imprisonment up to 5 years, or both



Commonly Used Statute:•8 U.S.C. §1324(b), Asset seizure and forfeiture for felony violations•Applicable to violations of 8 U.S.C. §1324(a), ex. harboring•Not applicable to administrative I-9 penalties or criminal misdemeanor charges



Less Commonly Used Statute:•8 U.S.C. §1001(a), Prohibits knowingly or willfully making false or fraudulent statements or concealing information•Can be applied to certifications made during I-9 process

Potential Penalties:•Fine up to $250,000, imprisonment up to 5 years, or both


Criminal Enforcement

Common Types of Activities that are present in Criminal Enforcement Actions:•There is actual or constructive knowledge that an employee or a group of employees are not authorized to work in the U.S.•No effort is made to complete an I-9 form•The employer may: pay wages in cash, forego paying FICA or other required deductions, ignore minimum wage and overtime requirements, or set up “sham” labor contractor arrangements



Criminal enforcement investigations and prosecutions can occur:

•Following an administrative I-9 audit;

•Concurrently with an administrative I-9 audit; or

•Independent of an administrative I-9 audit.



Possible signs of a criminal investigation:•At the completion of an I-9 audit, ICE warns of a re-inspection within the near future (ex. 6 months)•An employee with known work authorization problems re-applies for employment•Former employees or subcontractors call wanting to discuss prior work arrangements•An out-of-the-ordinary applicant shows up•Out of the blue questions about employer compliance from various parties



If an organization suspects it is the subject of a criminal investigation or becomes aware of potentially criminal activity relating to the employment of unauthorized workers, it should:

•Engage competent legal counsel, to include criminal defense and immigration compliance counsel,•Focus on assessing the situation first, and•Manage information and communications accordingly.


Compliance for “Sponsoring” Employers

If an organization sponsors an individual for a work visa, additional requirements apply:•Example, an H-1B visa petition for a professional worker requires an employer to:

– Pay fees associated with sponsorship,

– Pay the “required wage” amount,– Maintain Public Access files for inspection and

consent to governmental “site visits,”– Notify the government if the employment terminates

before the end of the sponsorship– In some instances, pay for the worker’s return

transportation costsWeigel Law Office, LLC Immigration &

Nationality Law


I-9 Do’s & Don’ts

Don’t:• Assume the process will manage itself• Allow this to become one of the lowest priorities in HR• Engage in snap decisions or make regrettable statements• Repeat the same mistakes, or worse, create more errors in the

process of a self-audit

Do:• Get a fresh set of eyes to review records and practices• Identify areas of need and conduct focused training• Identify best processes and personnel to handle the job• Establish periodic review processes to monitor and improve

compliance


Challenges for Organizations

Small Organizations:• Lack specialized staff, typically have a small number of I-9s, and

may have less formal records systems

Larger Organizations:• Possess specialized staff, have a larger number of I-9 records, and

more formal records, but communication and process management can break down

Organizations with Multiple Worksites:• Employer representatives are performing the I-9 function and

creating records in multiple sites, possibly without secondary review, along with communication and process management challenges


Assessing & Improving Compliance

Identify “Helpful” Resources

Manage Self-Audit Risks

Establish Training and Oversight


Hypothetical ScenariosSmall construction company – Never an I-9, knows workers don’t have legal status, provides housing and transportation, one or more of the employees come into contact with local law enforcement for whatever reason


Hypothetical ScenariosLarger organization – Regularly does I-9s, professional HR staff, no knowledge of work authorization at management or HR levels, but first-line manager regularly calls an employee by a name distinctly different from name on organization paperwork – Jeff Jones vs. Steve Smith


Hypothetical ScenariosMedium-sized organization – Relatively high percentage of ethnic workforce, issues with one worker, individual does not directly engage with HR/management – instead there are one or two of the workers who intervene by providing new documents and a new application for the employee in question


Hypothetical ScenariosLarger organization – Regularly does I-9s, professional HR staff, no knowledge of any work authorization problems at any level, employer terminates employment of an employee for cause, during exit interview, she states that at least one other worker in her department is using a false identity


Questions & Answers

Contact Information

Tony Weigel

Weigel Law Office, LLC

[email protected]

816.516.6555

www.weigellawllc.com

mailto:[email protected]

http://www.weigellawllc.com/

Supplemental Information

• Electronic I-9 Form Systems

• E-Verify



Electronic I-9 Creation and Storage Systems

• The law has authorized creation and/or storage of I-9 forms by electronic means, but be aware that the law is a bit complex because of 3 distinct periods of differing standards:

• Period 1 - April 25, 2005 to June 14, 2006 – Authorizing law provided no guidance, so anything (within reason) would satisfy the law

• Period 2 – June 15, 2006 to August 22, 2010 - On June 15th, an Interim Regulation was released that set some exacting, yet ambiguous standards for compliance

• Period 3 – August 23, 2010 to Present – A final regulation was issued that answered some questions, but left others unanswered – even the established vendors have to guess!



If an electronic system is utilized and an employer is audited, ICE will request the following from an employer:

•Name and provider of software vendor•Internal business practices/protocols re: generation, use, storage, security, inspection and quality assurance for electronically generated forms•Indexing system identifying links between information and employees•Documentation regarding electronic signatures•Audit trail information re: record creation and modification•A live demonstration of the system•Beware: Pre-population of Section 1 is a hot-button issue!



The Bellwether Enforcement Case – Abercrombie & Fitch, Sept. 2010– Company utilized an electronic I-9 system for completion and storage of

forms for new hires– Following an administrative audit, it paid a fine totaling $1,047,110.00

for I-9 violations, none of which were for employing unauthorized workers!

– Fines were assessed for “numerous technology-related deficiencies”– Quote from ICE official: “Employers are responsible not only for the

people they hire but also for the internal systems they choose to utilize to manage their employment process and those systems must result in effective compliance.”

Be Very Careful in Selecting and Utilizing an Electronic System!


E-Verify – Overview

• Originated in 1996 as “Basic Pilot” and a government-operated, electronic means of obtaining secondary verification of an employee’s work authorization

• E-Verify is utilized by approximately 480,000 U.S. employers, roughly 5%

• Under federal law, use of E-Verify is optional for most employers, with the exception of certain federal contractors and subcontractors

• Over 25 states have various forms of E-Verify requirements for all employers in the state or based solely upon award of a non-federal contract or receipt of funding


E-Verify – How It Works• Participating employers enter into a Memorandum of

Understanding (MOU); designate users (Program Administrator, Genl. Users), who must undergo online training; and provide notice of E-Verify use (Posters)

• I-9 form must be completed with SSN and photo ID, copies of US Passports and Passport Cards; ‘Green Cards’ (I-551 documents), and EAD’s (I-765)

• Employer submits a case query to system and it is processed using data from the Social Security Administration and Dept. of Homeland Security

• Query typically results in a confirmation and closes out case, keeping a copy of confirmation or writing case number on form, but not always


E-Verify – How It Works

• In some cases, a tentative non-confirmation (TNC) may result

• The employer must:– Provide notice of TNC to the employee, who chooses whether or

not to contest– Provide TNC documentation for employee follow up– Watch the E-Verify system for updates

• Case query can result in a confirmation, or a final non-confirmation (FNC)

• In a small number of cases, the FNC result can be challenged and corrected, but most FNC cases result in termination of employment


E-Verify – Management

An employer’s most common and fundamental E-Verify Errors:

• Failure to review and solidify basic I-9 processes• Failure to think beyond simply getting started

Tips for a “Freer & Easier” E-Verify Experience

• Understand that the system combines a number of manual and automated tasks using inconsistent databases – it is a “work in progress” and has been for 15 years

• Understand the long-term training and oversight needs• Develop a support system for use evaluation and

improvement


E-Verify – Monitoring & Compliance• E-Verify has had systemic problems with use of

fraudulent documents by both employers and employees

• Employers have failed to use system in accord with the MOU

• The result has been continual enhancements in Monitoring & Compliance, which the employer consents to in the MOU

• Employers may be contacted by E-Verify, subjected to a ‘bench audit’ and on-going oversight

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