Basics of Immigration Compliance Enforcement

Posted on: July 16th, 2014
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I. How does ICE enforce IRCA?

The I-9 enforcement process starts with the hand-delivery of a Notice of Inspection (NOI) and subpoena on the employer, by Immigration and Customs Enforcement (ICE) demanding the original I-9 forms of all current employees and former employees for a period going back one to three years. Additionally, the NOI will demand a list of all current and former employees including hire and termination dates; payroll records; quarterly wage and hour reports; business information, such as names of owners, Articles of Incorporation, and business licenses; and a list of related companies and subcontractors. An employer should contact their immigration compliance counsel immediately upon being served with a NOI.

An employer has three days to comply with the NOI although it can waive the three-day period. An employer should never waive the three-day period. Often, ICE is willing to provide more than three days, if requested to do so.

II. What are Penalties assessed by ICE?

ICE has a formula for determining its penalties (also referred as fines). The most serious violations are: “knowingly” hiring or employing undocumented workers; harboring or transporting undocumented workers to a jobsite; and knowingly accepting fraudulent documents. An employer can be fined $375 to $16,000 for each unauthorized worker employed (depending on first or subsequent offenses); up to $250,000 and/or up to 10 years imprisonment for harboring and/or transporting undocumented workers; and $250 to $5,000 for each knowingly fraudulent document received (depending on first or subsequent offenses).

ICE has the authority to fine an employer for substantive and/or uncorrected technical errors. ICE has a formula for determining its penalties/fines. The fines/penalties for substantive and/or uncorrected technical errors are $110 to $1,100 per I-9 form. The size of the fine for violations is based upon a sliding scale which starts at $110 for errors on 0 to 9 percent I-9 forms, which the employer should have maintained, and gradually increases to $275, $440, $605, $770 and finally to $935 for 50 percent and more of errors on I-9 forms, which the employer should have retained.

In addition, there are five aggravating or mitigating factors, each worth a 5 percent increase or decrease from the baseline penalty. They are: size of the business, good faith efforts or lack thereof, seriousness of the violations, whether any employees were unauthorized, and history of previous violations.

III. Recent OCAHO Decisions

In 2013, there was significantly greater litigation at Office of Chief Administrative Hearing Officer (OCAHO) involving I-9 form violations. ICE, the prosecutor of these cases, won 29 of the 30 OCAHO decisions. However, even though ICE won, in part, 29 cases involving the level of penalties, the employers were successful in greatly reducing the total amount of the penalties. In 2013, OCAHO reduced penalties sought by ICE by an average of 46.5% – reducing the penalties sought by ICE from $1,091,259.75 to approximately $508,020. The reduction in penalties is similar to 2012 when the reduction averaged 45 per cent, although it only involved 11 cases.

IV. How is the Anti-Discrimination Provisions of IRCA Enforced?

While employers need to be diligent about complying with IRCA’s employment verification rules, they should not be so overzealous that they end up penalizing qualified employees. IRCA has anti-discrimination rules that can result in an employer facing stiff sanctions. Employers of more than three employees are covered by the IRCA anti-discrimination rules (as opposed to the 15 or more employees covered by Title VII). IRCA protects most U.S. citizens, permanent residents, temporary residents or asylees and refugees from discrimination on the basis of national origin or citizenship status if the person is authorized to work. Aliens illegally in the U.S. are not protected.

Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provisions of IRCA, which prohibits citizenship and national origin status discrimination in hiring, firing and recruitment or referral for a fee, as well as document abuse – discriminatory I-9 form and E-Verify practices. If a company becomes overzealous in making sure all employees are authorized to work in the United States by requesting more documentation or certain documentation for non-citizens, it could be in violation of the anti-discrimination provision.

The OSC has been especially active recently in investigating and settling allegations under the anti-discrimination provision. In 2013, the OSC reached settlements with 20 employers concerning issues of document abuse or citizenship discrimination. The total penalties paid to the U.S. government in these 20 cases were approximately $788,500, with the largest penalty of $250,000, being paid by Centerplate, Inc., due to alleged document abuse. In addition to the civil penalties, employers paid approximately $260,000 in back pay to individuals who were alleged to have been discriminated against.

V. Department of Labor Audits

The Department of Labor (DOL), Wage Hour Division has the authority to conduct H-1B investigations in much the same manner as ICE has the authority to conduct I-9 inspections/audits. During these investigations, DOL will be demanding the employer produce the public access file as well as all I-129 USCIS petitions and H Supplements as well as approval notices. Other records requested include any records on a change in corporate structure, any “single employer” entities, whether the employer is “H-1B dependent”, a past “willful violator”, and liquidated damages or penalties sought or collected from H-1B workers. The DOL also has the authority to determine whether an employer engaged in benching (failure to pay an H-1B employee who is ready and available for work).

VI. Conclusion

As the above demonstrates, employers are on the front lines of immigration compliance enforcement and have several government agencies to be concerned about.