Immigration Enforcement Affecting Small Businesses

Here is a reprint of an article recently forwarded to me and is used with the permission of Clark & Trevithick.

What do temporary employment and contract employment agencies in Oregon, Illinois, and Ohio; meat packers in Arkansas, Iowa and Colorado; construction companies in Mississippi, Missouri and Kentucky; a landscaping company in Florida; a textile company in Boston; and a chain of Japanese restaurants in Baltimore all have in common with the former owner of ten Dunkin’ Donut shops in Connecticut?

They’re all facing investigation and/or criminal prosecution in federal court by the newly invigorated and very aggressive United States Immigration and Customs Enforcement Agency, or “ICE”, for short¹. As the result of what in many cases started as a so-called administrative “Worksite Enforcement” investigation, the companies listed above, including individual owners, officers and managers, are facing criminal charges including hiring illegal aliens, harboring illegal aliens, money laundering, identity or document fraud and Social Security fraud, to name just a few. The consequences of conviction of many of these crimes includes jail time (harboring illegal aliens provides for a 10 year prison sentence and money laundering is a 20 year felony). In addition to prison time, ICE also has forfeiture authority to go after a company’s or individual’s assets. In FY2006 alone, ICE seized $29 million dollars through forfeiture from various employers around the country.²

Worksite Enforcement
Among its many tasks, ICE has recently focused its Worksite Enforcement teams on identifying and prosecuting companies in industries that employ unskilled or lower skilled workers that historically include undocumented aliens. The examples cited above certainly fall into this target group. While this kind of investigative activity was part of the now assimilated Immigration and Naturalization Service’s charter, the approach by ICE since 2003 is dramatically more aggressive and noteworthy.

By way of example, ICE agents recently investigated a small chain of Japanese restaurants in the Baltimore area. In March 2006, ICE agents executed search, arrest and seizure warrants at three of these restaurants and four related houses where they found 15 undocumented workers living in “deplorable conditions”.

Under the old INS approach to such a case the investigative agents would have proceeded administratively, conducting an investigation of the restaurants to determine whether necessary paperwork and forms were up-to-date and in compliance with immigration laws and regulations. Finding the undocumented workers would have generated an administrative fine in the neighborhood of $20,000, or less and probably no criminal charges.
Under the new regime instituted by ICE, the following actions were taken against the restaurant owners:

The owners were arrested and charged with money laundering (possible 20 year sentence) and harboring illegal aliens (possible 10 year sentence);

ICE agents seized 8 luxury vehicles, 10 bank accounts, 3 safety deposit boxes and cash found during the searches of the homes and restaurants;

Ultimately, the owners pleaded guilty to several felony charges and agreed to forfeit approximately $1.1 million in assets.³

Compliance Requirements
Current laws and regulations require that all employers in this country employ only individuals who are authorized to work in the United States. In order to comply, employers must verify on a Form I-9 the identity and employment eligibility of all employees, including U.S. citizens. These I-9 Forms are retained (including electronically) by the employer and must be made available for inspection by ICE, the Special Counsel for Immigration-Related Unfair Employment Practices or the Department of Labor. Failure to properly complete and retain the Form I-9 can subject an employer to civil penalties ranging from $110 to $1,100. Perhaps more significantly, ICE agents frequently use the agency’s Forensic Documents Laboratory to determine the authenticity of the various documents (including I-9’s) used to establish employment eligibility.⁴ Maintaining fraudulent documents can lead to the kinds of investigations and prosecutions noted earlier in this article.

Conclusion
Any employer, but especially one who employs lower-skilled alien workers, needs to pay particular attention to the laws and regulations that dictate the verification of employment eligibility of its workers. A new day has dawned in the form of new Worksite Enforcement investigations conducted by an aggressive and well-funded agency with a clear mandate to arrest and prosecute not just undocumented workers, but their employers and managers as well. The consequences of failure to comply with the laws in this area can include large fines, asset forfeiture and even prison.

1 ICE was created on March 1, 2003, combining the investigative and intelligence arms of the former Immigration and Naturalization Service (INS) and the U.S. Customs Service, and is part of the Department of Homeland Security. (ICE Fiscal Year 2006 Annual Report.)

2 “No More Slaps on Wrist for Work-Site Violations”, Julie L. Myers, Department of Homeland Security Assistant Secretary for Immigration and Customs Enforcement, as appeared in the Kansas City Star, June 26, 2007, ed.

3 ICE Fact Sheet, dated June 16, 2006, “Case Example—Worksite Enforcement”.

4 ICE Fact Sheet, dated April 26, 2005, “Electronic Signature and Storage of the I-9 Employment Eligibility Verification Form”.

Eric Dobberteen focuses his practice in the areas of commercial litigation and trial work, white collar criminal defense and local, state and federal regulatory enforcement proceedings. For more information regarding the Firm’s litigation practice, go to www.clarktrev.com.

The New ICE Crackdown on Employers

ICE - the U.S. Department of Immigration & Customs Enforcement - is aggressively pursuing employers who hire illegal workers.

Immigration and Customs Enforcement (ICE) Director Julie Myers announced that ICE will conduct more I-9 form audits in 2008. ICE has the authority to inspect employers’ I-9 forms, and it is planning to use this authority as another mechanism to ensure that employers are complying with immigration laws. The fines associated with I-9 form violations range from $110 to $1,100.

ICE’s more aggressive worksite enforcement strategy targeted the “jobs magnet” that attracts illegal aliens seeking employment in the U.S. In FY07, ICE dramatically increased penalties against employers whose hiring processes violate the law, securing fines and judgments of more than $30 million while making 863 criminal arrests and 4,077 administrative arrests.

In the past, administrative fines often proved to hold little deterrence value for violators. Many employers came to view these fines as simply the “cost of doing business.” Administrative fines were ignored, not paid in a timely matter or mitigated down over several years. ICE has dramatically increased the amounts of criminal fines and forfeiture over previous years of administrative fines alone. Administrative fines in FY 2001 totaled $1,095,734, $72,585 in FY 2002, $37,514 in FY 2003, $45,480 in FY 2004, and $6,500 in FY 2005. However, during the three quarters of FY 2007, ICE has obtained criminal fines, restitutions, and civil judgments in WSE investigations in excess of $30 million.

In criminal cases, ICE is often pursuing charges of harboring illegal aliens, money laundering and/or knowingly hiring illegal aliens. Harboring illegal aliens is a felony with a potential 10-year prison sentence. Money laundering is a felony with a potential 20-year prison sentence. ICE has found these criminal sanctions to be a far greater deterrent to illegal employment schemes than administrative sanctions.

Employers should continue to ensure their compliance with immigration laws by properly completing the I-9 form. In addition, employers may want to conduct a self-audit of their I-9 forms and correct any errors.

Illegal Workers & The ICE Crackdown Statistics

It can't happen to you? Wanna bet?

The graphic above shows the staggering increase in arrests made in conjunction with the hiring of illegal workers by the Immigration & Customs Enforcement Department (ICE - a part of the Homeland Security Department).

• In fiscal year 2007, ICE secured more than $30 million in criminal fines, restitutions, and civil judgments in worksite enforcement cases. They arrested 863 people in criminal cases and made more than 4,000 administrative arrests. That is a tenfold increase over just five years before.
• The number of criminal and administrative arrests has steadily increased over the past few years. Those arrested criminally include a variety of persons–corporate officers, employers, managers, contractors and facilitators. In criminal cases, ICE often pursues charges of harboring illegal aliens, money laundering and/or knowingly hiring illegal aliens. Harboring illegal aliens is a felony with a potential 10-year prison sentence. Money laundering is a felony with a potential 20-year prison sentence.
• ICE has found these criminal sanctions to be a far greater deterrent to illegal employment schemes than administrative fines.
• These arrests also include illegal aliens charged with criminal violations. Aliens have been charged with possession or sale of fraudulent documents, identity theft, Social Security fraud or re-entry after deportation.

And it gets more important in the fiscal year 2008 (which ends this October):

• As of August, ICE made more than 1,000 criminal arrests tied to worksite enforcement investigations.
• Of the 1,022 individuals criminally arrested, 116 are owners, managers, supervisors or human resources employees facing charges including harboring or knowingly hiring illegal aliens. The remaining workers criminally arrested are facing charges including aggravated identity theft and Social Security fraud.
• ICE has also made more than 3,900 administrative arrests for immigration violations during worksite enforcement operations.

If that wasn't sobering enough, the ICE website posts their most recent arrests and punishments -all types of businesses are being investigated - from donut shops, agriculture, manufacturing, retaurants and more.

They're not kidding any more. Make sure all your employees are legally authorized to work in the United States; review your I-9's for each employee - and when in doubt, follow the law.

When HR supervisors are getting arrested, you know it's serious.

I-9 Audits and Fines On The Rise

The United States ICE (Immigrations and Customs Enforcement Department) is no longer kidding around.

Last month, ICE Assistant Secretary Julie Myers stated that in 2008 there will be "a lot more I-9 inspections of employers."

Now the Bush administration has announced substantially larger penalties for knowingly hiring illegal immigrants.

"This is a way to keep that pressure up, to make sure people are complying with the law," said Homeland Security Secretary Michael Chertoff (pictured).

Under the plan, effective March 27, the minimum penalty for willingly hiring an unauthorized worker would go from $275 to $375. The maximum penalty will jump from $2,200 to $3,200, and the maximum for multiple violations will increase from $11,000 to $16,000.

Penalties for inadequate record-keeping range from $100 to $1,000 per violation - even if you unknowingly hired an illegal immigrant.

Make sure to audit your operations process. Employers are being arrested as well as fined.

It no longer makes sense to skirt the law.

Thanks to:

Dallas Morning News
Baker Donelson

Krispy Kreme Fined for hiring illegal workers

If Krispy Kreme didn't have enough problems already - here comes news they've been fined by the EEOC for hiring illegal (undocumented) workers in their Cincinnati factory. The fine amounts to $40,000.

What is remarkable about this fine is how easily it could have been prevented. The paperwork is easy - you just download an I-9 form off the internet. If there is any doubt about the documentation a candidate provides, just login to e-verify that's provided by the Department of Homeland Security. That would have been much cheaper than $40,000 and the embarassment caused by the resulting publicity.

And in case you think it might not happen to you - ICE has announced audits of 652 other businesses in the coming months (and we're sure there are more to follow!). The Obama administration has changed the focus from illegal employees to the employers that employ them.

Increased Penalties for Immigration Violations

The ICE crackdown continues, with increased penalties for employers who knowingly employ unauthorized aliens that are now in affect.

• First violation for knowing employment of an unauthorized alien, $375.00 (previously $275.00)
• First violation maximum penalty, $3,200.00 (previously $2,200.00)
• Multiple violations maximum penalty, $16,000.00 (previously $11,000.00)

All of these fines are per person. So if you're employing 10 authorized aliens, it's $375 per person you illegally employed.

Make sure to audit your employee files and I-9 procedures.

American Apparel and a Big Immigration Problem

American Apparel has been accused by ICE of employing 1,800 people in Los Angeles who are not authorized to work in the United States.

It begs the question - is your I-9 house in order?

One of the biggest mistakes we see when conducting HR Audits is when businesses screw up their I-9 process.

We've seen I-9's unsigned, misfiled, lost - and - in many cases - business owners who never used I-9's in the first place!

Get an audit completed today - you may be next...

Immigration Raids Continue In The Workplace

After hearing for months how ICE will be stepping up enforcement of undocumented workers, word comes from Mississippi that the largest ever raid has taken place in the workplace - 595 Howard Industries workers were arrested last month.

It remains unknown if company executives will be arrested.

The fines against employers are increasing, the enforcement has dramatically elevated, and now it's time to make sure you're compliant with all I-9 and related requirements.

If it can happen to a large company like Howard Industries, it can happen to you.

Thanks to Barker Olmsted & Barnier.