U.S. Immigration and Customs Enforcementreported it conducted more than 3,000worksite audits in fiscal year 2012. One

way ICE identifies potential hiring violations is by auditing employers’ Form I-9s, the documentbusinesses use to verify an employee’s eligibilityto work. Under the Immigration Reform andControl Act of 1986 (“IRCA”), employers arerequired to complete and retain a Form I-9 foreach individual they hire. ICE is authorized tofine employers even for technical violations of the employment authorization verification system. Each year, the agency issues fine noticestotaling in the millions to businesses for I-9 violations. In light of ICE’s increased worksiteenforcement activities, this article examines howemployers can demonstrate compliance withForm I-9 employment authorization verificationrequirements.

Verification

Employers perform I-9 verification by requiringall new hires to complete Section 1 of the Formand present documentation confirming theiridentity and authorization to work. The employ-er must then record the documentation present-ed in Section 2 of the Form. U.S. Citizenship andImmigration Services released a new Form I-9,Employment Eligibility Verification, and M-274,Handbook for Employers, Instructions forCompleting the Form I-9, on March 8, 2013.Employers must use the new form exclusivelybeginning May 7, 2013. Employers who fail to do so will be subject to penalties.

Penalties

Section 274A of the Immigration and NationalityAct (“INA”) provides for civil monetary and criminal penalties:

• for record keeping or paperwork violations:$110-$1,100 per occurrence;

• for knowingly employing an unauthorizedworker: $375-$3,200 per occurrence for first

violation, $3,200-$6,500 per occurrence for second, and $4,300-$16,000 per occurrence for third and more; and

• for a demonstrated “pattern or practice” ofknowingly employing unauthorized workers: acriminal fine of up to $3,000 and imprisonmentof up to six months.

USCIS regulations define “pattern or practice” as “regular, repeated and intentional activities,but…not…isolated, sporadic, or accidental acts.”Criminal prosecutions may be brought againstthe employer as well as individual company offi-cials for pattern or practice violations. In addi-tion, it is a criminal offense, punishable by up tofive years’ imprisonment, for “any person whoduring a 12 month period knowingly hired foremployment at least 10 individuals with actualknowledge” that they are not authorized to beemployed in the United States and were broughtinto the country illegally. An employer who hasviolated the I-9 requirements may be debarredfrom federal contracts for a year. This period may be extended in one-year increments.

The Other Side of I-9 Compliance

The focus of I-9 enforcement is on the means ofI-9 completion and civil and criminal penalties for noncompliance. However, even as employersseek to comply, they also must ensure they donot treat individuals disparately or discriminatori-ly. The I-9 requirements represent a compromisebetween eliminating the employment of unau-thorized individuals and preventing discrimina-tion on the basis of citizenship and national origin. Employers may be penalized for engaging in activities that could have a disparate impactupon one of the protected classes of job appli-cants. Thus, an employer who engages in docu-ment abuse by demanding more documentationthan the law requires or rejects documents that “on their face appear to be genuine,” may be subject to civil penalties ($110-$1,100 per individual discriminated against).

Walking the I-9 Compliance Tightrope:Employer Challenges AmidstAggressive Enforcement

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Employers found to have engaged in unfair immigration-related practices (“UIREP”) may be subject to penalties of:

• $375-$3,200 per occurrence for a first violation,

• $3,200-$6,500 per occurrence for a second, and

• $4,300-$16,000 per occurrence for a third and more.

UIREPs include refusing to hire or discharging a protectedindividual because of his or her national origin or citizen-ship, and requesting specific documents or rejectingapparently valid documents during employment eligibili-ty verification for the purpose or with the intent of dis-criminating on the basis of citizenship or national origin.

The Department of Justice’s Office of Special Counsel for Immigration Related Unfair Employment Practices(“OSC”) enforces INA’s anti-discrimination provisions. The INA prohibits employers from discriminating on thebasis of citizenship or immigration status unless requiredby law, regulation or government contract. Followingrandom checks/audits of online postings (particularly ofrecruiters, job banks, and staffing companies), OSC hascommenced proceedings against employers for allegedunlawful discrimination. It announced on February 8,2013, a settlement agreement with a Casselberry, Florida,healthcare staffing company, resolving allegations thatthe company had engaged in a pattern or practice of citizenship status discrimination by posting discriminatoryjob advertisements on the Internet. OSC’s investigationhad found the company’s Internet-based job postingscontained discriminatory language, impermissibly prefer-ring foreign-trained individuals seeking permanent resi-dence or H-1B visa sponsorship over U.S. workers. Underthe terms of the settlement, the employer agreed to pay$27,750 in civil penalties, to change its internal policiesand written procedures to incorporate INA’s anti-discrimi-nation protections, and to submit to reporting and compliance monitoring requirements for three years.Link: http://www.justice.gov/opa/pr/2013/February/13-crt-173.html

The INA’s anti-discrimination provisions also limit the typeof questions employers can ask job applicants. In policystatements, OSC has approved two questions:

1) Are you legally authorized to work in the UnitedStates? (Yes or No); and

2) Will you now or in the future require sponsorship for an employment visa status?

Employers cannot ask whether a job applicant is a U.S.citizen before making an offer of employment, unlessrequired by law or government contract. Since U.S. citizens, permanent residents, refugees and asylees are protected from citizenship status discrimination, askingthe question pre-offer could expose the employer tocharges of discrimination. By the same token, employersare generally cautioned against asking additional questions about a job applicant’s current visa status prior to making an offer of employment.

Enforcement of Form I-9 Employer Sanctions

The Departments of Labor and Homeland Security auditemployers to ensure compliance with the I-9 require-ments. The DOL compliance force is made up of Wageand Hour Compliance Program compliance officers andOffice of Federal Contract Compliance Programs equalopportunities specialists. Members of DHS’s ICE carry outenforcement. To avoid liability that may result from anICE inspection, employers need to establish a sound I-9verification and compliance system. Employers alsoshould ensure that their contractors comply with I-9 obligations with respect to contractor employees performing services at the employer’s facilities.

Under the Obama Administration, I-9 enforcement strategies have shifted away from civil enforcement ofemployer sanctions towards combined civil and criminalprosecutions of egregious violators. Unlike the BushAdministration, which focused on unauthorized-workerarrests at employer worksites, the current administrationhas pursued employers alleged to have knowingly orrecklessly hired unauthorized workers. ICE’s worksiteenforcement strategy, which it released on April 30, 2009,prioritizes criminal prosecutions against employers thatrely on unauthorized workers as a business model, mistreat their workers, engage in human smuggling ortrafficking, engage in identity and benefit fraud, laundermoney, or participate in other criminal conduct. ICE concentrates on employers involved in national securityand public safety, or associated with critical infrastructureand key resources sectors. Consequently, industries traditionally associated with the employment of illegalaliens — including the construction, food processing, and agricultural production industries — have been frequent targets for enforcement.

Form I-9 Audit Process

ICE usually initiates the I-9 administrative inspectionprocess by serving an employer with a Notice ofInspection (NOI). The NOI compels production of Forms I-9 within three business days. An extension may begranted at the discretion of the investigating officer. The NOI will indicate whether ICE requires any support-ing documentation, such as a copy of the payroll, list of current employees, Articles of Incorporation, and business licenses.

ICE agents or auditors then inspect the employer’s FormsI-9. When technical or procedural violations (pursuant toINA § 274A(b)(6)(B)) are found, the employer is given 10business days to make corrections. ICE may impose a finefor all substantive and uncorrected technical violations.Employers determined to have knowingly hired or con-tinued to employ unauthorized workers will be requiredto cease the unlawful activity. They, in most cases, will befined, and in certain situations, prosecuted criminally.Such employers may be debarred from participating infederal contracts and from receiving other governmentbenefits.

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ICE must consider all criminal statutes pertaining to violations discovered during a worksite investigation forpossible criminal prosecution of an employer or principalmanager. These statutes cover alien smuggling, encour-aging or inducing an illegal alien to enter the U.S., knowingly hiring/continuing to employ illegal aliens,fraud or misuse of visas, false statements, structuringtransactions to evade reporting requirements, moneylaundering, and conspiracy, among others.

Employer Response

Employers can reduce the likelihood of being fined bytaking a number of measures, such as establishing andmaintaining effective I-9 compliance policies and proce-dures, administering them in a uniform manner, and conducting self-audits. Here are some tips to consider:

• In-House Procedures: Adopt written procedures providing clear guidance to human resources man-agers. Procedures should address who is responsible for conducting I-9 verification and who is subject to I-9verification, when and how I-9s should be completed,how I-9s should be stored and retained, and how todevelop a sound I-9 compliance system that is integrat-ed with the company’s overall personnel/hiring policy,and employee orientation and registration materialsand applications.

• Appoint an I-9 Manager: A human resources managershould be tasked to manage the I-9 process. This manager is responsible for:

Training employees responsible for completing I-9s and ensuring they understand the process.

Overseeing compliance and helping to ensure that itbecomes part of corporate culture. With the assistanceof counsel, employers should conduct periodic reviewsof the company’s I-9 files, looking for patterns of com-mon mistakes and areas that require attention. RegularI-9 audits will enable the company to respond moreeffectively to a government NOI in a timely mannerand demonstrate a good faith attempt to comply withI-9 requirements.

Keeping abreast of ICE requirements and ensuring thatthose conducting I-9 verifications are informed ofchanges.

• Conduct Manager Training:Managers responsible for hir-ing and for negotiating servicecontracts should be trained on I-9requirements and procedures, potentialpenalties for I-9 violations and behavioralrisks (such as joking about illegal aliens in the workplace) that could be used to show thecompany knew, or should have known, of I-9 violations.

• Review Contracts with Service Providers: Contractswith service providers should contain express provisionsmaking the completion of I-9s for contractor employ-ees the contractor’s responsibility. Where the host company has sufficient leverage, it may be desirable toinclude a provision requiring the contractor to indem-nify the company for any costs, damages or penaltiesarising from the contractor’s failure to comply withIRCA and other legal requirements, such as workman’scompensation.

• Consider Auditing Contractor Performance: Conductperiodic audits of contractor I-9 procedures to ensurethe contractor is complying with IRCA’s requirements. If such audits include reviewing the contractor I-9forms, however, they may be used to bolster an argument that the company is a co-employer of thecontractor’s employees and extend the company’spotential liabilities.

• Evaluate Overall Relationship with Contractors:Employers must be honest with themselves. In onecase, the government argued that a retailer’s cleaningcontracts were so favorable to the company that itmust have known its contractors could not comply with the wage and hour and workman’s compensationlaws and, therefore, would have to resort to employingunauthorized employees in violation of IRCA.Employers should consider an evaluation to determinewhether similar risks exist. Finally, a previous IRCA violation increases the risk of additional governmentinvestigations.

The highly anticipated immigration reform bill hasbeen formally introduced by a bi-partisan group ofeight Senators. The proposal for significant changes

to the nation’s immigration system (consisting of almost850 pages), the “Border Security, Economic Opportunity,and Immigration Modernization Act of 2013,” includes

provisions for increased border security, legalization forindividuals present in unlawful status, and modernizationof the legal immigration system. A complete summary isavailable at http://www.jacksonlewis.com/resources.php?NewsID=4447.

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Editors:

Sean Hanagan, (914) 328-0404, HanaganS@jacksonlewis.com

Roger S. Kaplan, (632) 247-0404, KaplanR@jacksonlewis.com

Mei F. So, (212) 545-4000, SoM@jacksonlewis.com

Editorial Office: Jackson Lewis LLPOne North BroadwayWhite Plains, NY 10601(914) 328-0404www.jacksonlewis.com

The articles in this Update are designed to give general and timelyinformation on the subjects covered. They are not intended asadvice or assistance with respect to individual problems. This Update is provided with the understanding that the publisher, editor or authors are not engaged in rendering legal or other professional services. Readers should consult competent counsel or other professional services of their own choosing as to how thematters discussed relate to their own affairs or to resolve specificproblems or questions. This Update may be considered attorneyadvertising in some states. Furthermore, prior results do not guarantee a similar outcome.

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The Jackson Lewis Immigration practice consists of a multi-cultural team of professionals with a com-mand of 15 languages, working to provide a broad

range of immigration law services. Our attorney parale-gal team model leverages more than 300 years of com-bined corporate immigration experience held by groupattorneys with the efficiency and cost-effectiveness of ahighly trained paralegal pool. We:

Train and advise employers on I-9 employment eligibilityverification, Social Security “no match,” and E-Verifypractice and requirements.

Help establish in-house visa programs and policies tostreamline international transfers and visa sponsorshipconsiderations.

Represent companies in government audits.

Assist companies in obtaining temporary and permanentemployment visas for foreign employees in the UnitedStates.

Counsel recruiting staff and management about the visasystem to facilitate strategic planning for key employees.

For outbound visa assistance, working in concert with anetwork of leading foreign law firms, offer seamlessglobal coverage for the movement of critical staff.

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