E-Verify, I-9 Compliance and Worksite Enforcement: An Essential Primer for All Employers

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1 E-Verify, I-9 Compliance and Worksite Enforcement: An Essential Primer for All Employers Melissa Harms Law Offices of Melissa Harms September 15, 2010

2 Roadmap Enforcement Budget and Recent Events in Worksite Enforcement Possible Worksite Enforcement Penalties Common I-9 Mistakes/ Recent changes to I-9 E-Verify Constructive Knowledge of Unauthorized Employment SSA No Match Letters Corporate Compliance Programs Melissa Harms 2

3 Enforcement Budget $3 Billion for enforcement activities for FY 2009 Key component of 2009 actions are worksite enforcement In 2007, ICE secured more than $30 million in criminal fines and civil judgments in worksite enforcement cases and arrested 863 people In 2008, ICE made 5,184 administrative arrests, and 1,103 criminal arrests tied to worksite enforcement. Of those, 135 were owners, managers, supervisors or human resource employees. Melissa Harms 3

4 Current Events in Worksite Enforcement American Apparel: 1800 employees lose jobs in LA in response to ICE investigation in September 2009 (1/4 its workforce) Immigration raids at 11 El Balazo restaurants in the Bay Area 63 people seized on May 2, September 2010: Virginia restaurants, owner and manager indicted on federal charges for knowingly employing and harboring illegal aliens Swift & Company: Meat processing plant was investigated and 1,282 workers were arrested. Swift lost 40% of workforce. In 2001, the same company was forced to pay 200,000 settlement for excessively scrutinizing documents of individuals who looked or sounded foreign. Melissa Harms 4

5 Form I-9 Enforcement ICE Audits Employee Complaint Random Audit Outcomes from Audit: Warning Notice - Technical or Procedural Failure Notice of Intent to Fine - Substantive Violations Employer may request formal hearing before Administrative Law Judge within 45 days DHS Notice of Suspect Documents Melissa Harms 5

6 Employer Sanctions for Form I-9 Violations (Civil) Knowingly Employing Unauthorized Aliens (IRCA) $375 to $3,200 per employee for first offense $3,200 to $6,500 per employee for second offense $4,300 to $16,000 per employee for subsequent offenses For offenses that occurred before March 27, 2008, the penalties are less Paperwork Violations $110 to $1,100 per violation Employer Good Faith Defense (IIRAIRA) Accepting fraudulent documents $250 to $5,000 per document accepted Melissa Harms 6

7 Employer Sanctions for I-9 Violations (Criminal) Engaging in pattern or practice of knowingly hiring unauthorized aliens or continuing to employ aliens knowing they are unauthorized to work in U.S. Fine of up to $3,000 per alien and up to 6 months in prison U.S. v. Tyson Foods Other criminal penalties possible for document fraud for both employee and employer Melissa Harms 7

8 Other possible charges in worksite enforcement Alien harboring actions Making false statements to government officials Criminal misuse of social security number Identity theft Fraud Money laundering Tax evasion Conspiracy Melissa Harms 8

9 Who Can be Charged? Individuals Managers and supervisors Human resource personnel Intermediate and senior corporate officials Accountants The employing entity Melissa Harms 9

10 Common Mistakes on I-9 Reverify and tickle for expiration dates Review documents and attach copies Know which documents you can accept CONSISTENCY! Never insist on specific documents Balance reasonably genuine documents with becoming a document expert. Melissa Harms 10

11 I-9s: Updating and Reverification If the employee lists an expiration date in Section 1 or the List A document has an expiration, a reminder to re-verify should be calendared Employers should institute a system that reminds them at least 6 months in advance that an employee s authorization document will expire The I-9 must be re-verified no later than the date the employee s work authorization expires Melissa Harms 11

12 Revised Form I-9: Items That Have Changed 5 documents have been removed from List A, which means they are no longer acceptable: Certificate of U.S. Citizenship (N-560 or N-561) Certificate of Naturalization (N-550 or N-570) Alien Registration Receipt Card (Form I-151) Unexpired Re-entry Permit (I-327) Unexpired Refugee Travel Document (I-571) One document has been added to List A Unexpired Employment Authorization Document (I-766) No changes have been made to Lists B and C Melissa Harms 12

13 Revised Form I-9: Items That Have Changed (cont.) List A doc titled unexpired foreign passport with an attached Form I 94 indicating unexpired employment authorization, has been replaced by an unexpired foreign passport with an unexpired Arrival-Departure Record, Form I 94, bearing the same name as the passport and containing an endorsement of the alien s nonimmigrant status, if that status authorizes the alien to work for the employer Providing a SSN in Section 1 is voluntary, unless the employer participates in E-Verify If an employee does present their SS card, the employer must record the SSN in Section 2 Melissa Harms 13

14 I-9 CHANGES: February 2, 2009 Requires all documents presented be unexpired New form is now available Check for latest forms No changes to the actual form Melissa Harms 14

15 e-verify: Electronic Verification Program Free program that confirms employment eligibility of all newly hired employees electronically through SSA & DHS databases Administration push to encourage employers to register for E-Verify: Grants 17 months F-1 OPT extension to STEM graduates working for E-Verify enrolled employers Federal Acquisition Regulation (FAR) E-Verify for government contractors (effective September 8, 2009) Melissa Harms 15

16 e-verify: Voluntary Sort of States requiring participation for all private employers: Arizona Mississippi (now employers of 250+, phase in all by 2011) South Carolina States requiring participation for public contractors: Colorado Georgia Minnesota Missouri Utah Federal and many states require for their agencies Federal contractor or subcontractor (as of 9/8/2009) Exception for contracts under $3,000 Melissa Harms 16

17 Map of States with e-verify Legislation Melissa Harms 17

18 everify: Participation Enroll at: Enter into a Memorandum of Understanding & attend online training session Must initiate inquiry AFTER employee accepts offer & completes Form I-9 (no later than 3 business days from initial start date) Employers are required to verify ALL newly hired employees. Will receive instantaneous confirmation or tentative non-confirm and must inform employee to contact DHS or SSA to get corrected. Using E-Verify establishes a rebuttable presumption that employer hasn t knowingly hired an unauthorized alien. Participation doesn t provide a safe harbor from worksite enforcement. Melissa Harms 18

19 FAR E-Verify Federal Acquisition Regulation effective September 8, 2009 requires federal contractors with FAR E- Verify Clause to use E-Verify Exceptions: Contracts for Commercially Available Off the Shelf items Subcontracts with value less than 3,000 Subsidiaries and affiliates MUST HAVE FAR E-VERIFY CLAUSE in contract Melissa Harms 19

20 Constructive Knowledge Knowledge fairly inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition Originally was construed narrowly Courts are broadening the interpretation Failing to re-verify Entrusting incompetent employees to complete I-9! Melissa Harms 20

21 Social Security No-Match Letters Issued by SSA when name and SSN on a Form W-2 submitted by an employer cannot be matched to an SSA record on file Several causes for no-match, including: Clerical Errors; Name Changes; Misuse or identity fraud Resolve discrepancies by sending letters to employees, employers & self-employed persons to obtain corrected info so that the earnings can be posted to the person's earning record. SSA suspended sending out since 2007 Melissa Harms 21

22 DHS Regulation on SS No-Match Letters Regulation abandoned by Obama administration BUT ICE claims that it has always interpreted these letters as constructive knowledge Dead regulation provides steps to take after receiving nomatch letter: Verify w/in 30 days that mismatch wasn t employer error Request employee to confirm accuracy of emp. records Ask employee to resolve the issue with SSA If steps 1-3 resolve it, follow instructions on SSA letter If no resolution, complete a new I-9 form w/out using the questionable SSN and instead using valid documents Employers who do not follow this policy risk liability for knowingly continuing to employ unauthorized persons Melissa Harms 22

23 Recommendations Follow up with the employee to attempt to reconcile the mismatch Send letter to employee and give a time period to meet with company representative Give reasonable time to follow up with DHS Verify any new name/ss number with SSNVS Melissa Harms 23

24 IRCA Discrimination Prohibits discrimination with respect to hiring, recruitment or discharge based on national origin or citizenship Refusal to employ based on a future expiration date of a current employment authorization document. Document Abuse Enforced by the Office of Special Counsel for Immigration Related Unfair Employment Practices, which is part of the Civil Rights Division of the U.S. Department of Justice. Melissa Harms 24

25 Penalties for IRCA Discrimination Charges are filed through Office of Special Counsel Employee right to hire or reinstatement Debarment from federal contracts Payment of back pay Fines (same as unauthorized employment) Document abuse $110 to $1,100 per employee per incident Melissa Harms 25

26 Avoid Discrimination in the I-9 Process Accept documents employee presents if they appear genuine and relate to that employee. Never request specific, different or more documents than required. Keep the I-9 on file at least 3 years from the date of employment, or one year after the employee leaves, whichever is longer. Verify that you have seen identity and work authorization documents on the I-9. Melissa Harms 26

27 ICE Raid Scenario After receiving information that illegal aliens may be employed at a specific location, agents investigate to determine the merits of that intelligence. Once that intelligence is substantiated, ICE may conduct a worksite enforcement operation, arresting employees and collecting computers and paperwork. ICE investigators then comb through the data to determine whether a business owner or managers are knowingly hiring illegal aliens. After presenting evidence to federal prosecutors, ICE may be authorized to arrest managers or company owners for criminal violations. Melissa Harms 27

28 Elements of an Effective Corporate Compliance Program Universal corporate compliance training - boardroom to frontline managers Detailed written guidelines for managers Effective auditing and monitoring procedures Strong disciplinary action for intentional violations Melissa Harms 28

29 Questions??? Melissa Harms Law Offices of Melissa Harms