Immigration officials executed the largest workplace raid in more than a decade on a north Texas electronics repair business in early April, resulting in criminal charges against CVE Technology Group and more than 280 employees. The operation in Allen, Texas is the latest headline-grabbing component of immigration enforcement and is yet another signal to businesses to either align with the federal government’s culture of full I-9 compliance or suffer the consequences. In this case, the consequences may include jail time and fines for company officials and deportation for its undocumented workers.
ICE Investigations in 2018
US Immigration and Customs Enforcement (ICE) investigations in 2018 surged by 405% over 2017 to ensure a “culture of compliance.” The agency’s stated goals are to:
- Prevent the abuse of workers;
- Deter further illegal immigration;
- Stop criminal activity, thereby enhancing public safety;
- Eliminate threats to national security and
- Protect lawful workers and companies from unfair competitive advantage.
To these ends, ICE and Homeland Security Investigations (HSI) joined forces to produce stunning results from investigations to arrests over the previous year.
|I-9 audits initiated||1,360||5,981||440%|
As an investigative arm of the Department of Homeland Security (DHS), ICE is specifically targeting two types of industries: (1) those that relate to the nation’s critical infrastructure and (2) those that have traditionally employed and have been known to exploit unauthorized workers. The agency may trigger an Employment Eligibility Verification Form (I-9) audit of any business for any reason, but some of its most visible cases of late started with tips from other DHS agencies through their unrelated investigations and from the tip form on ICE’s website. Tipsters are not required to provide their names or other identifying information so that they may choose to remain anonymous.
With the rising number of audits comes a slowdown in the process, sometimes taking a year to complete and further complicating a difficult and costly headache for HR professionals. Businesses must be aware of the current climate and take every possible step to avoid triggering an I-9 audit and the expensive sanctions that can follow.
While it can take years for the federal government to turn an audit into a conviction, several high-profile cases and trends have emerged in the last two years that should make business owners reevaluate their I-9 procedures for weaknesses. The consequences of others’ misdeeds are sobering.
- The owner of a slaughterhouse in Tennessee pleaded guilty to tax and wire fraud and employing illegal aliens. He will pay $1.4 million in restitution before his sentencing which may include prison time and fines. 104 alien employees were arrested on immigration violations.
- HSI arrested 17 people for a criminal conspiracy to exploit illegal laborers, fraud and money laundering and is investigating violations at agricultural businesses in Nebraska, Minnesota and Nevada.
- A Texas trailer manufacturer is under criminal investigation for hiring 160 people using identities stolen from US citizens.
- In FY2018, businesses were ordered to pay over $20.4 million in civil and criminal penalties. One Texas business forfeited over $5.5 million, and an Oklahoma business paid more than $1 million.
- FY2017 saw the largest financial penalty ever issued in an immigration case. Asplundh Tree Experts of Pennsylvania was ordered to forfeit $80 million and to pay an additional $15 million to settle civil claims for willful blindness to lower level practices of hiring and rehiring illegal aliens.
While the numbers of indictments and convictions remained relatively steady over the last year due to the time it takes to complete the process, the message is clear to HR professionals—make sure I-9 procedures are rock solid. ICE recommends that companies conduct self-audits to identify and correct issues before they become problems.
Last year, US Immigration and Customs Enforcement (ICE) quadrupled the number of worksite investigations, a sobering reminder of why I-9 compliance is vital to every employer. These investigations led to a 440% increase in audits, a 560% increase in criminal arrests and an 887% increase in administrative arrests. In the last two years, businesses have been ordered to pay more than $127.8 million in criminal and civil penalties for violations of related laws. Any business owner who has not shored up his I-9 procedures in light of the surge could be making a very costly mistake.
The Purpose of I-9
The Immigration Reform and Control Act of 1986 requires employers to check the identity of all employees and to verify their authorization to work in the U.S. Businesses document these efforts via the Employment Eligibility Verification Form (I-9), maintained for each employee whether a citizen or not. The employee attests to his work eligibility, and the employer attests to verifying that the produced identification documentation appears to be genuine. The two-page form carries 15 pages of instructions, an indication of the serious legal ramifications to both employer and employee for mistakes and outright lies.
ICE may audit any business at any time, for any reason. While ICE has recently been specifically targeting (1) businesses that relate to critical infrastructure and (2) industries that have historically been known to exploit its workers, the agency may initiate an audit signaled by an unrelated investigation by another arm of the Department of Homeland Security or simply by anonymous tip.
An I-9 Compliance Audit
Through each step of the audit process, the business will receive written notice from ICE. It begins with a Notice of Inspection, informing the business that it has three days to produce its I-9 forms and any requested supporting documentation. If auditors discover violations, the employer then has ten business days to correct them or risk financial penalties. Should ICE determine that the business knowingly hired unauthorized workers, the business may be subject to fines, criminal prosecution and debarment from doing business with the federal government. Settlement may be reached with ICE along the way, but if the business continues to challenge the rulings, the case may proceed through a series of administrative hearings.
Determination of Fines
In January 2018, the Department of Justice increased I-9 fines for inflation. They are calculated from the date of the I-9 inspection and are determined by the violation(s)’ placements on the following ICE tables.
The Knowingly Hire/Continuing to Employ table represents the number of violations for employees fitting this description divided by the number of employees that required an I-9. Each ten-percentage point range increases the fine as does whether the employer is a first-, second- or third- (or more) time violator. The minimum fine for a first-time violator with a score of less than 10% is $548, while the maximum on the table is $19,242.
The Substantive and Uncorrected Technical Violations table divides the number of violations by the number of employees requiring an I-9, and also considers whether this is a first, second or third (or more) offense. The minimum fine is $220 while the maximum is $2,191.
The Enhancement Matrix considers five factors unique to the business. Each of these factors can increase or decrease the table percentages by at most five percent.
- Its size;
- Whether it acted in good faith;
- The seriousness of the offense(s);
- Whether unauthorized workers were involved; and
- Its history of compliance.
Avoiding a Costly Mess
With all of this, ICE is seeking to ensure a “culture of compliance” that will enhance public safety and national security and protect law-abiding companies from unfair competitive advantage. The best way for businesses to live comfortably within this culture of compliance is to, well, comply. The I-9 is a legal document. Both employer and employee attest to what they write as though it were testimony in a court of law, and it is a crime in itself simply to lie on any part of it. The HR professionals coaching employees through the I-9 should fully grasp this for themselves and make certain that the new employees understand that their signatures subject them to perjury charges for everything they have written. If all parties to the I-9 are acting in informed good faith, they are being good citizens of the culture of compliance.
Companies are responsible for the competence and good faith of their lower level HR professionals. It can be difficult for business owners and upper management to oversee the actions of everyone administering the I-9, especially when the forms are being filled out in other locations. ICE recommends that companies conduct self-audits to identify and correct issues before they become problems, and it offers guidelines to do so on its website. Just remember that the Immigration and Nationality Act prohibits discriminatory or retaliatory audits.
Lookout’s Development Efforts Already Underway
U.S. Citizenship and Immigration Services (USCIS) announced the newly revised Form I-9 is now approved for use. The announcement includes an implementation grace period through May 7, 2013 to allow employers to revise their internal processes to incorporate the use of the new form. The new Form I-9 has extended Section 1 to request additional information from the new hire. The additional information requested includes, telephone, email, and foreign passport information, where applicable. In addition, the Form I-9 itself now consists of 2 pages. The Federal Register Notice (78 FR 15030) indicates that the new Form I-9 may be obtained by visiting the I-9 Central website, www.uscis.gov/I-9Central. USCIS has also released a new corresponding Handbook for Employers (Form M-274) as of March 8, 2013.
Lookout’s development efforts are well underway. Lookout Services’ development team began programming these changes late last year with the expectation that the revised Form I-9 would eventually receive approval. However, initial review indicates that USCIS has made additional changes to the revised Form I-9 since the draft Form I-9 was issued in October of 2012. Our business and development team will be reviewing these changes and planning for their inclusion in our development efforts. However, Lookout is committed to publishing the new Form I-9 before the grace period ends. Lookout will continue to provide updates as the final development effort progresses.
As I-9 Program Administrators, you know the challenges presented by the human element. Electronic Form I-9 systems with real-time error-checking go a long way toward eliminating the issues created by the human element. But, even with error-checking software in place, there are still certain pitfalls that can occur.
- Your I-9 Processor ignores the system alerts and prompts resulting in an erroneously completed Form I-9.
- Your I-9 Processor does not know what to do when the new hire fails to present documents within 3 days of hire.
- Your I-9 Processor does not know what to do with an incomplete Form I-9 if the new hire quits before the I-9 is completed.
- Your I-9 Processor does not know what to do with an incomplete Form I-9 if the new hire never begins work.
Due to unique factors in your organization, many of these pitfalls require management and legal input to determine the best action to take. These determinations should be described in an I-9 policy manual and taught to I-9 processors during training sessions. In addition, a Program Administrator should be responsible for oversight and management of the organizations I-9 processing and policy enforcement.
Once again, electronic Form I-9 systems add efficiency to the oversight of Form I-9 processing. The ability to pull reports and search for specific events saves significant time. However, if your Program Administrator is not utilizing the reports regularly and effectively, your organization may find compliance issues continue to be overlooked.
Administrators should perform the following functions on a systematic basis to insure I-9 Policy and Program effectiveness.
- Review all Form I-9s containing errors
- Delete I-9s for new hires who never began work
- Terminate I-9s for new hires who failed to provide documents to complete I-9
- Resolve any curable errors, i.e., typos, conflicts of status, etc, for active employees
- Compare Payroll records to Form I-9 records
- Update Termination dates
- Purge Retention Expired Form I-9s
If you require instruction or assistance on how to perform these tasks in the Lookout system, please contact Customer Support at 713-668-6200 x2. We look forward to the opportunity to assist you in managing the human element in your I-9 processing.
The “Tentative Non-Confirmation” or TNC is the 2nd most common response users see from the E-Verify system following the “Authorized to Work” response. The reason this is a “tentative” non-confirmation is that the system sees some commonality between the employee’s information and a record in the system. However, there is not enough coinciding information to allow for a match and a definitive system response. It is extremely likely in these cases that a typo exists somewhere in the employee’s data.
A TNC is typically the result of a clerical error in Section 1 of Form I-9. It is important that you double or even triple check the employee’s personal information in these cases before you continue processing the E-Verify case. Often, a typo in the entered information will halt the confirmation. Here are a few common mistakes to look for:
- Last name/first name backwards
- Social Security number typed wrong
- Incorrect date of birth
These seem like very simple errors not to make, but that is exactly why they are made. Whether caused by rushing, complacency, or unfamiliarity with the computer system these mistakes are common; so look for them.
After making corrections, return to E-Verify and continue processing the case. This will update E-Verify with the corrected information and hopefully change the case status to authorized. But remember, typos and human error can occur on both sides of the system. If you’ve checked and rechecked the employee’s information and can’t find a mistake, it is possible that the error exists on the government’s side. If you determine that the information in Section 1 is accurate and that the government’s data was entered wrong the employee will need to “Contest” their case status.
The final case result would determine the procedure to follow to “contest” the findings. Simply follow the on-screen instructions and print the necessary documents.
We will cover some of these case results in more detail a future issues.
Here are 5 things that you can do as the year comes to a close to evaluate compliance with E-Verify and Form I-9. See how your end users are doing and how your Compliance Program performed in 2012. We invite you to contact us for assistance with these or any other matters you discover during your review.
- Review all Open E-verify cases: Identify any cases which have been open for more than 10 days, discover the reasons for untimely completion, resolve issues, and complete cases.
- Update Termination Dates: Request termination dates from payroll, and batch process termination dates to I-9 records.
- Match I-9s and Payroll: Request employee list from payroll, batch process Matching I-9 records against employee list.
- Review Three Days Section 2 Unsigned Report: Identify unsigned I-9 Records, discover the reasons for untimely completion, resolve issues, and complete signatures.
- Review Retention Expired Records: Identify retention expired records using the Retention Report, then notify Lookout for assistance with record removal.
On September 11, 2012, DHS announced proposed changes to the E-Verify MOU in the Federal Register (77 FR 55858). The Federal Register notice provides a 60-day comment period ending November 13, 2012. There are 6 versions of the new proposed MOU depending upon how access to E-Verify is gained. Each of the proposed MOUs may be viewed via the eRulemaking Portal, simply scroll to the bottom of the docket screen.
The proposed MOU includes several changes. The most significant of these changes are outlined below.
Article V. Section F. PENALTIES
- The [Web Services Agent, Web Services Employer, etc.] agrees that any failure on its part to comply with the terms of the MOU may result in account suspension, termination, or other adverse action.
- DHS is not liable for any financial losses to [Agent/Employer] or any other party as a result of account suspension or termination.
Article VI. Section B. TERMINATION
2. …DHS may terminate this MOU…, with or without notice at any time if deemed necessary because of requirements of law or policy, or ….breach of system integrity…, or a failure on the party of either party to comply with established E-verify procedures and/or legal requirements…the employer understands that if it is in a state where E-Verify is mandatory, termination of this MOU by any party may negatively affect the Employer’s business.
For employers using E-Verify in an E-Verify required state, these changes may have business ending consequences. The MOU does not outline the level or frequency of non-compliance issues which would result in suspension or termination. Furthermore, the MOU does not outline any means by which an employer can redress the non-compliance issues in order to maintain the employer’s E-Verify participation. Likewise, the MOU does not provide any process by which an employer can appeal the decision of DHS with respect to suspension or termination of the employer’s E-Verify account.
Lookout Services encourages employers to consider the proposed changes and to submit comments on the proposed MOU. Comments may be submitted via email (firstname.lastname@example.org ), as well as, the eRulemaking Portal. The comment period ends November 13, 2012.