Articles

Form I-9 and H-1B Enforcement and Employers' Best Practices to Preclude Liability

Jane W. Boldblum and Jeffrey D. Azarva

Introduction

As President Barack Obama begins his second term in office, comprehensive immigration reform has catapulted to the top of his legislative agenda. But while Congress’ ability to agree to a meaningful overhaul remains uncertain, employers can be certain that Congress, like the administration, is focused on comprehensive immigration enforcement. This article will discuss the two main areas of employment-based immigration enforcement, reflected in governmental audits and, in so doing, will divide this article in two parts: in Part 1, the authors will discuss Form I-9 audits which potentially face all U.S. employers and are conducted by the U.S. Immigration and Customs Enforcement (ICE), a division of Homeland Security Investigations (HSI); and, in Part 2, the authors will discuss H-1B audits which potentially face any employer that employs an H-1B worker and are conducted by the office of Fraud Detection and National Security (FDNS), a division of U.S. Citizenship and Immigration Services (USCIS), as well as audits conducted by the U.S. Department of Labor’s Wage and Hour Division.

Message: this article, in no way, seeks to panic any employer. Indeed, these authors believe that our country’s applicable immigration laws are relatively easy to comply with. However, as evidenced, since 2009, when USCIS adopted an aggressive strategy to target employers perceived as not complying with the letter or spirit of our immigration laws, substantial fines have ensued. Since 2009, ICE has ‘raised’ over $87 million in employer sanctions. The Wage and Hour Division also has exacted sizable fines against non-compliant employers. Thus the critical message of this article: all employers need to be aware of their responsibilities and to meticulously comply with same. In order to do so, employers should seek the counsel of reputable immigration counsel who will not tell the employer what it wants to hear, but will clearly tell the employer what it needs to hear to avoid liability and to adhere to the requirements of the law. It is our hope that this article will help.

Part 1: Form I-9 and HSI Enforcement

John Morton, Director of U.S. Immigration and Customs Enforcement, underscored his agency’s priority when he delivered in March 2012 his 2013 budget address to Congress:

We are focused on smart and effective enforcement of our immigration laws, including making sure that employers have the tools they need to maintain a legal workforce and face penalties if they knowingly violate the law… By focusing on employers that are willing to hire illegal workers, we can eliminate the incentive that leads illegal aliens to violate our nation’s immigration laws… This focus will continue this coming fiscal year. ^[1] (Emphasis supplied)

Director Morton then described one such “tool”:

We have also established the ICE Mutual Agreement between Government and Employers program (IMAGE) — designed to promote voluntary compliance, educate employers about best practices and help companies train their employees to comply with the nation’s immigration-related employment laws. Last year, ICE entered into IMAGE agreements with well-known companies, including Chick-fil-A, Smoothie King, Best Western, Toyota, Tysons Food, and Kelly Services, among others. These companies agree to use E-Verify, conduct self-audits, and submit to an ICE audit. In FY 2013, ICE will continue to expand IMAGE outreach nationwide… ^[2]

John Morton’s address makes clear that ICE, through its Homeland Security Investigations (HSI), will be aggressively auditing employers in those industries believed to be employers of the undocumented. By way of example, in 2012, Infinite Visions, a clothing manufacturer in Secaucus, New Jersey, was audited after ICE received an anonymous tip alleging that the company hired illegal aliens. The audit revealed unspecified violations of the Immigration Act and “serious deficiencies with the company’s employment records.” ^[3] In other words, I-9 violations. In July 2012, the company reached a final settlement with HSI in the amount of $625,000. ^[4]

The special agent in charge of HSI’s Newark, New Jersey office, Andrew McLees, stated:

HSI is focused on protecting lawful business owners by continuing to investigate employers who repeatedly and egregiously hire illegal workers. ^[5]

Employers in New Jersey and elsewhere may believe that the above statement suggests that the ‘compliant’ employer can relax, and that only the egregious employer is being targeted. The authors of this article know otherwise.

In 2012-2013, the authors were asked to represent, what they (still) believe to be, a ‘compliant’ southern New Jersey employer in a Form I-9 audit. The employer had received I-9 training a few years before the audit and knew they had I-9s for each worker and knew that each worker had produced documents, as required, confirming their identity and work authorization. Although the employer somehow had misplaced about 15 original Forms I-9, they had exact copies of same and, after searching for the missing original forms, submitted an attestation attesting to the fact that the forms were a true and correct copy of their original. The employer, despite easily corrected technical deficiencies (such as the easily missed ‘date of hire’), in pertinent part, was a good example of what an employer should be doing in an industry that is perceived to be non-compliant. The authors expected HSI to accept the employer’s attestation that each Form I-9 produced was a true copy of its original, find ‘good faith compliance’, and hold the company up as an example of an employer that evidenced a commitment to hire an authorized workforce. Instead, HSI issued a Notice of Intent to Fine containing a punitive, substantive fine for each of the 15 copies of the Forms I-9 produced. The amount of the fine, of course, will be negotiated and reduced. However, this case underscores the importance of the most seemingly compliant employer in New Jersey to be vigilant and pro-active about their employment verification responsibilities, as HSI does not intend to show any mercy.

Indeed, recent years have witnessed a marked escalation in worksite enforcement. As alluded to above, since January 2009, ICE has ratcheted up its enforcement efforts, auditing more than 8,000 employers, debarring 726 companies from participation in federal contracts and other immigration programs, and levying more than $87.9 million in financial sanctions. ^[6] In FY 2012 alone (October 1, 2011 to September 30, 2012), ICE served 3,020 Notices of Inspection (initiating a government inspection of an employer’s Forms I-9), which led to 495 “Final Orders” totaling nearly in $12.5 million in administrative fines. ^[7] If the skeptical or complacent employer needed any further convincing of the Department of Homeland Security’s (DHS) newfound resolve, they need only look to the $18 billion spent on immigration enforcement initiatives in 2012—a figure which dwarfed spending by all other major federal law enforcement agencies combined. ^[8] As the above statistics suggest, DHS is serious about immigration enforcement, and there is every reason to expect more of the same in 2013 and beyond.

i. The Mechanics of Form I-9 Completion

The passage of the Immigration Reform and Control Act (IRCA) imposed an affirmative duty on employers to verify the identity and work authorization of all persons hired after November 6, 1986. ^[9] The mechanism for documenting same is the Employment Eligibility Verification Form, better known as simply Form I-9. This all-important form must be completed by all employees and by an authorized representative of the employer within three business days of hire. ^[10] Specifically, newly-hired employees must be given a sheet on which is listed those documents that, if provided (in the original), will establish the employee’s identity and employment eligibility. The employee is given full discretion to choose his/her documents to present. The employee may present one original, unexpired document which establishes both employment authorization and identity, or may present two original, unexpired documents: one which establishes employment authorization and a second document which establishes identity. ^[11] The employee, after submission of his/her documents, is required to complete and execute Section 1 of Form I-9. ^[12]

As mentioned above, the employer must refrain from specifying which documents an employee may present in connection with Form I-9 verification, lest liability for discrimination attach. ^[13] By executing the designated portion of Form I-9, the employee attests, under penalty of perjury, that he or she is authorized to work in the United States as either a U.S. citizen or national, lawful permanent resident (i.e. green card holder), or a nonimmigrant with valid employment authorization. ^[14] The employer, in turn, must review the proffered documents and accept the documents that are on the list as ‘acceptable’ Form I-9 documents, and which appear genuine. The law specifically precludes employers from ‘investigating’ or looking beyond the documents; it only requires that a document appear facially genuine in order for an employer to find an individual work authorized. ^[15] To look beyond the face of the documents will subject the employer to liability for discriminatory hiring practices. If, for example, an employer ‘suspects’ that a proffered Social Security Card is fraudulent, the employer is not permitted to reject same or request another document. It only may do so in the event that the document is clearly altered. Once an employer has reviewed the employee’s documents, it must fill out the second portion of Form I-9 by indicating the type of documentation provided, as well as the identification number and expiration date (if any) of same. ^[16] Finally, employers are required by law to maintain, for inspection purposes, Forms I-9 for all members of their current workforce during the entire time of their employment. In the case of former employees, they are obligated to keep same for a period of at least three years from the date of hire, or one year after the date the individual ceases to be employed, whichever is later. ^[17] As the authors’ client in southern New Jersey experienced, employers risk ‘substantive’ liability if Forms I-9 are not properly retained—either in paper form (with original signatures) or in electronic form (with acceptable electronic signatures), or via a microfilm or microfiche copy of the original signed version of the Form I-9. ^[18]

Although currently just one page, Form I-9 can be deceptively difficult to complete. Employers should not underestimate the importance of meticulously completing each and every item on the form, as the failure to do so can translate into mounting liability, even when no unlawful employment exists. Generally, in the event ICE agents or auditors conduct an inspection of an employer’s Forms I-9 for compliance, they will categorize I-9 violations into two categories: substantive verification errors, and technical or procedural deficiencies. ICE has never promulgated a regulation defining a substantive versus a technical violation. It, however, can be assumed that a substantive violation includes an employer’s failure to complete two key parts of Form I-9: (i) the part that indicates the worker’s ‘immigration’ status; and (ii) the part that indicates that the employee presented a document that confirms employment eligibility. Other omissions—including the commonly missed ‘date of hire’—usually constitute technical violations. Nevertheless, if technical or procedural mistakes have been ...

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