ICE Enforcement Actions

On Monday, June 5 from 2:00 to 3:00 pm EST I will conduct a free webinar on “Workplace Investigations by the Department of Homeland Security – Is Your Restaurant Ready?”  The webinar is sponsored by the Georgia Restaurant Association.  Much, if not all, of what I’ll be discussing regarding employers compliance with immigration laws during the hiring process relates to all employers and isn’t limited to restaurants.  During the webinar I will discuss the following topics:

  • Factors leading to a workplace investigation by DHS – ICE
  • How to prepare for a workplace investigation by ICE
  • How to respond to a Notice of Inspection
  • What happens during an ICE audit
  • The role of the Department of Justice in workplace investigations
  • Collateral consequences of workplace investigations

Click here to register.

On February 28 at 3:00 pm EST, I (check out my bio) will be speaking on a free webinar hosted by Hire Image called, Hiring and Maintaining a Legal Workforce: What’s New in 2017.

I will be talking about what’s new in 2017 relative to hiring and maintaining a legal workforce. I will cover immigration compliance-related topics such as the President’s Executive Orders—and proposed orders—and the impact they could have on American employers and your workforce.  I will also talk about mandatory E-Verify, increased raids by Immigration and Customs Enforcement (ICE), increased civil penalties for noncompliance with the Form I-9 requirements, and what to expect and how to prepare your organization for an ICE worksite enforcement operation.

This webinar is approved for 1 HR (General) recertification credit hour toward California, GPHR, HRBP, HRMP, PHR and SPHR through HRCI, and is valid for 1 PDC for the SHRM-CPSM or SHRM-SCPSM.

Click here to register.

Happy New Year!

The (some would say unexpected) results of the presidential campaign have led us down a path where president-elect Trump will be sworn in January 20, 2017.  While the dust is still settling, and will continue to settle over the coming weeks and months, employers should prepare for the potential impact this Administration could have on immigration compliance.  What do I mean by immigration compliance?  I’m talking the new Employment Eligibility Verification form (the “Form I-9”), mandatory E-Verify, and increased government investigations. While today’s hype may be about border security, vetting of refugees, and deporting criminal aliens, I believe immigration compliance is an area that will take on greater importance under this Administration.  I’m doing two (because it’s that important) free webinars with colleagues on this topic and I hope you will join us.

The first one–Understanding the New Form I-9 and the Election’s Potential Impact on Immigration Reform–is sponsored by Equifax Workforce Solutions on January 19, 2017 at noon EST.

Click here to register.

I’ll post information on the second webinar, which will be hosted by my firm on January 24, 2017, at a later date.

A national staffing company has been fined $227,000 in civil fines for improperly completing the Forms I-9 for its remote hires.  This despite the fact that Immigration and Custom’s Enforcement (ICE) determined that all employees were legally authorized to work in the United States.   According to a press release by the company, the reason for the fine lies in the fact that the wrong person signed the I-9 forms.   Again, according to a company press release, this was how they completed Forms I-9 for remote hires.  Which, as I will explain later, was not properly done and hence why the company was fined:

Prior to the government’s notifying ESSG of any problem with its employment verification process and because of ESSG’s nationwide sprawl, the company confirmed new employees’ identity via an on-site agent who examined applicants’ documentation for authenticity. Once confirmed, the agent faxed color copies of the documents to company headquarters, where ESSG staff completed and signed the mandatory I-9 forms and again confirmed employees’ authorization with the advanced electronic verification system (E-Verify) used by more than 500,000 companies in the U.S.

The government objected to ESSG’s process, claiming the law requires the same person who views the applicant’s original documents must complete and sign the I-9, and disregarded ESSG’s voluntary use of E-Verify.  Despite the judge’s decision in favor of the government, ESSG is standing its ground and preparing an appeal.”

This practice is described in the OCAHO judge’s order as well.  Namely that an off-site agent of ESSG examined the original documents, copied them and sent them to ESSG in Minnesota where a payroll administrator completed section 2 of the Form I-9 by working off the photocopies.  Turns out the government is right in saying the I-9s were improperly completed.

The regulations at 8 C.F.R. §§ 274a.2(a)(3) and (b)(1)(ii)(A) – (B) clearly state that the individual who examines the original document(s) presented by the employee who completes section 1 must be the same person who completes section 2.  There must be a physical inspection of the document(s) presented for I-9 purposes  AND the person reviewing them must be the person who completes section 2.  No exceptions for remote hires.  Putting aside the reality that this does not allow employers to leverage technology (like Skype) and that it seems like an archaic requirement in the 21st century … truth is that is the law.  Section 2 also includes an affirmative attestation in which the person completing the section states, under penalty of perjury, that they have examined the document(s), they appear to be genuine and relate to the individual presenting them.  This requires a tactile review of the documents.

The judge’s conclusions of law were, among others, that:

  • Failure to review an individual’s original documents before signing section 2 of the Form I-9 constitutes a failure to properly complete section 2 of the I-9 in violation of 8 C.F.R. § 274a.2(b)(1)(v); and
  • Section 2 of the I-9 is properly completed only when the person who signs the section 2 attestation is the same person as the person who examines the employee’s original documents.

In total, the judge found that 243 employees listed in the Notice of Intent to Fine fell under the employer’s incorrect I-9 practices for remote hires.  The judge found no “compelling reason” to adjust the penalties set by the government (and Judge Thomas usually does).  ICE set the penalties “for the false attestations in section 2 of the I-9s” for the 242 employees at $935 each.

To read the Final Decision and Order in United States v. Employer Solutions Staffing Group II, LLC (OCAHO Case No. 14A00005) click here.

If you are a company with remote hires and would like to discuss your practice please contact me at Arnall Golden Gregory LLP.

The Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO) assessed an I-9 related penalty of over $228,000 to a Georgia construction company.  This is one of the larger fines I’ve seen issued by Immigration and Customs Enforcement (ICE) for such violations, and it was even below what they originally assessed, which was a fine of nearly $332,000.  All this over paperwork violations (i.e., failure to present and/or failure to properly complete) related to the Form I-9, the Employment Eligibility Verification form which all new hires must complete.

  • The issuance of the Notice of Inspection (NOI) by ICE was fueled by a damaging media story by the Atlanta Journal Constitution in 2010 in which a group secretly taped a foreman making statements about hiring undocumented workers.  ICE issued an NOI requesting Forms I-9 for a three year period as well as employment records, payroll data, wage and hour reports and other information.
  • ICE alleged two counts.  First that the company failed to ensure that 277 named employees properly completed Section 1 of the Form I-9 and/or failed to ensure that the company properly compelted section 2 of the Form I-9.  Second, that the company failed to prepared and/or present Forms I-9 for 87 employees. ICE initially requested a penalty of $332,813.25 with penalties of $981.75 per I-9 violation.  OCAHO Administrative Law Judge Thomas issued a final decision and order, finding the company liable for 338 of the violations alleged, but mitigating the total penalty to $650 for each violation in Count I and $750 for each violation in Count II, for a total civil money penality of $228,300.  See, United States of America v. M&D Masonry, OCAHO Case No. 13A00023.
  • In Judge Thomas’ decision there was a discussion regarding determining the appropriate size of the company for purposes of assessing a civil penalty.  But what I found interesting is the fact that the company pre-signed over 100 Forms I-9, which could constitute a false attestation. In her decision, Judge Thomas states, “review of the company’s I-9 forms reflects what appears to be a wholesale execution by means of a rubber stamped signature in section 2 on February 20, 2008 of a large number of what must have been at the time otherwise blank I-9s.”  It furthermore appears that many of these forms listed no documents in Section 2 and no start dates. Judge Thomas goes on to say, “It is difficult to avoid the inference that the forms were prepared in bulk in advance and used as needed for subjsequent hiring.”  See United States v M&D Masonry, 10 OCHAO no. 1211, p. 12.

Lessons Learned

As a practitioner in the field, I know that company’s often struggle with issues related to Form I-9 compliance stemming from a variety of reasons.  But employers can learn a few lessons from this case.

  • Know what those in the field or on-site are doing (specifically those with hiring authority) because their actions can hurt the company.  Also, no one other than principals or a designated spokesperson should be authorized to speak with the media. This case was a little different since the individual allegedly secretly taped the foreman, but have a media plan in place so that all media requests are funneled to the appropriate individuals within the company.
  • Often times, especially where there is high turnover or high volume hiring, employers try to streamline the I-9 process in different ways.  One way may be to pre-populate the employer information section in section 2 of the Form I-9.  That can be acceptable depending on how it is done, but it is never acceptable to pre-sign section 2 of the Form I-9.
  • Have a Form I-9, properly completed, for each current employee.  Civil paperwork penalties for the Form I-9, which range from $110 to $1,000, can quickly add up due to aggravating factors and therefore they are never really $110 per violation.

 

Immigration and Customs Enforcement (ICE) assessed penalties totaling $264,605 for 283 Form I-9 violations on a restaurant in New York.  That’s a lot of money for a small business for paperwork violations!  Following a government investigation of the company’s I-9 compliance, ICE alleged that the restaurant failed to properly complete I-9s for 264 employees and failed to prepare or produce I-9s for 19 employees.  ICE proposed a penalty of $264,605, with a baseline penalty of $935/violation, alleging that the increased baseline was due to the seriousness of the violations and the bad faith of the employer.  It then mitigated the baseline amount due to the employer’s small size and absence of unauthorized workers.   Ultimately this matter ended up in court, before the Office of the Chief  Administrative Hearing Officer (OCHAO), where Administrative Law Judge Thomas reduced the total penalties to $88,700.  Still a lot of money for a small business.  Judge Thomas found that the government’s proposed total penalty was excessive, in part due to its small size and also its location in an economically depressed area.  She also found no bad faith on the part of the employer. The case is United States v. Two for Seven, LLC, 10 OCAHO no. 1208, 2014 OCAHO LEXIS 1 (Jan. 15, 2014).

Takeaways from this case:

  • Fines for I-9 compliance lapses quickly add up and ICE aims high when assessing penalties.  Paperwork violations start at $110/violation and can go as high as $16,000/violation if you are a repeat offender. Generally speaking, in government investigations I handle, I often see ICE use $935 as the baseline fine amount.  One bad I-9 can equal $935.00.
  • Not completing a Form I-9 is a big deal if you are the subject of an ICE investigation, as it is a substantive violation and can serve as the basis for a fine.  Make sure you have a Form I-9 for all current employees and if you don’t, contact legal counsel experienced in I-9 compliance issues to address.
  • Not properly completing the Form I-9 is as serious as not presenting a Form I-9, depending on how poorly it has been completed.  There are two types of violations — substantive I-9 violations and technical violations which can be corrected.  Depending on what wasn’t completed on the I-9, an employer can be charged accordingly.  For instance, an employee not completing the attestation section in Section 1 is a substantive violation, which can lead to a fine.
  • If you are the subject of a government investigation for your I-9 compliance (i.e., you’ve recieved a Notice of Inspection and/or received an administrative subpoena from ICE) work with legal counsel experienced in I-9 compliance investigations.  Don’t go it alone.

The Department of Homeland Security (DHS) has released a document entitled “Guidance on the Collection and Audit Trail Requirements for Electronically Generated Forms I-9” in response to a Freedom of Information Act (FOIA) request.  If you use electronically generated Forms I-9, read on.  If you are a vendor with an I-9 product that allows companies to electronically generate Forms I-9, read on.

The Guidance provides direction to DHS special agents and auditors during Form I-9 investigations for those employers who use electronic Forms I-9.  Which means that if you are the subject of a Notice of Inspection (NOI) by Immigration and Customs Enforcement (ICE) — meaning ICE wants to inspect your Forms I-9 — and you have electronic Forms I-9 through a third party vendor, ICE agents will not only look at your Forms I-9 but also at your vendor and their product.  Under the Immigration and Nationality Act, providers of electronic I-9 software products must follow certain requirements (see generally 8 C.F.R. section 274a.2).  The Guidance is important because it clarifies minimum electronic audit trail requirements, among other things.  So what will ICE agents ask for if you are the subject of an I-9 investigation and you use an electronic I-9 product?  In addition to the Forms I-9 and other documents, ICE will want the following: 

  • Documentation regarding the product’s “audit trail”, specifically the date the Form I-9 was accessed, who accessed it, and what action was taken. Meaning that the audit trail must show when a Form I-9 was created, completed, updated, modified, altered or corrected.  
  • The name of the software product being utilized. 
  • Documentation about your internal business practices and protocols related to the inspection and quality assurance, as well as, the generation, use, storage and security of the electronically generated Forms 1-9.   Which means that if you use an electronic I-9 product, have in place a document with your I-9 vendor outlining protocols and procedures in place with respect to the I-9 product and your Forms I-9. 
  • Information about the product’s indexing system identifying how the electronic information contained in the Form I-9 is linked to each employee.  This will include documentation of the system used to capture the identity and attestation of the individual electronically signing the Form I-9. 
  • What procedures are in place to certify that the individual whose name is on the electronic Form I-9 not only is the person who completed the form, but also that they knew what they were verifying to when they provided their electronic signature.
  • ICE agents or auditors may also ask to see at least one printed completed electronically generated Form I-9.  They may also request access to the system for a demonstration of the generation of an electronic Form I-9.

Tip of the Day: ICE worksite audits and investigations can be a stressful process, but knowing what to expect will make the situation more manageable.  Moreover, employers can greatly reduce the burden imposed by these audits by properly documenting the protocols and procedures relating to the company’s management of electronic Form-I-9s in advance and discussing them with immigration counsel.  Contacting your electronic I-9 software provider may also provide answers to questions regarding the audit trail, indexing system and electronic signature.  It’s also important to confirm that your vendor is meeting the standards outlined in the DHS guidance so that if ICE comes knocking you will be prepared.

The Guidance can be found at ICE’s FOIA library.

I recently attended the Federal Bar Association Chicago Chapter’s conference on Workplace Enforcement and Immigration where I was both a speaker and member of the audience.  Dan Siciliano at Stanford Law School gave a great presentation on the importance of the Sarbanes Oxley, Dodd Frank Act and Securities and Exchange Commission (SEC) with respect to publicly traded companies and their compliance with the immigration laws.  These seem like very odd words lumped together, but here’s why they are important. 

If you are a publically traded company, Section 404 of the The Sarbanes Oxley Act  applies to you.    The Sarbanes-Oxley Act (SOX) came into force in July 2002 and introduced major changes to the regulation of corporate governance and financial practice.  A goal of SOX is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws.  A summary of Section 404 states:

  • Issuers (of financial reports to the SEC) are required to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures.  The registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.

Section 922 of the Dodd Frank Wall Street Reform and Consumer Protection Act has a whistle-blower provision which is relevant to corporate immigration compliance because it allows a whistle-blower to obtain an “award” (aka bounty) where they voluntarily provide the SEC with original information that leads to a successful enforcement action where the SEC obtains sanctions exceeding one million dollars.  The “award” ranges from 10 – 30 percent of the recovery.  Potential whistle-blowers can spill the beans about a company’s lack of, or poor, immigration compliance controls and procedures surrounding the Form I-9.

Tip of the Day — if you are a publicly traded company (and even if you aren’t) treat your company’s handling of the Form I-9 and related immigration compliance matters as a top priority.  Work with immigration counsel to establish protocols, processes and procedures regarding the proper completion, storage and retention of your Forms I-9.  Conduct a self-audit of your Forms I-9, again with immigration counsel.  Involve leadership in this process, including General Counsel and audit chairs.  An example of an SEC investigation in this area is Chipotle Mexican Grill, in which an Immigration and Customs Enforcement (ICE) investigation led to an SEC investigation regarding the work authorization of Chipotle’s employees.

I’m a speaker at the upcoming Federal Bar Association Chicago Chapter’s 7th Annual Workplace Enforcement and Immigration Program.  If you are in Chicago please join us. View the agenda and register by clicking here.

Conference Title — What You Should Know about Workplace Enforcement and Immigration

Date — October 16, 2012 (8:30 am – 5:00 pm)

This is a great conference if you want to learn more about corporate immigration compliance, employer self-audits of forms I-9, Immigration and Customs Enforcement (ICE) and worksite enforcement, E-Verify, best practices, immigration due diligence during mergers and acquisitions (M&A), how to deal with remote hires and the form I-9, etc., etc., etc. 

My panel is on Counseling Corporate Compliance in Today’s Climate — how to deal with constructive knowledge situations, issues arising from Deferred Action for Childhood Arrivals, best practices and the Office of Special Counsel, due diligence in M&A situations and immigration issues related to publicly traded companies.  I’m joined by some fantastic and very knowledgeable speakers and I’m sure it’ll be an all around good experience for all!

On August 8th, Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) announced that following an investigation and audit of Form I-9 documents, it had issued a $625,000 fine to Secaucus, New Jersey clothing manufacturer, Infinite Visions LLC, for alleged violations of the Immigration and Nationality Act  and serious deficiencies with their form I-9 employment eligibility verification records. 

HSI stated that its investigation into Infinite Visions’ hiring practices followed an anonymous tip claiming that the company was employing unauthorized workers.  The enforcement action serves as another reminder of the importance of properly completing Forms I-9 for legally authorized workers.