Increased Risks for Immigration Worksite Enforcement Actions

Immigration has been a well-publicized political issue dominating the media for some time, and it is continues to be a heated topic during the ongoing election process. Many businesses have lobbied for provisions that would permit thousands of immigrants to work as guest workers on a seasonal basis. Other groups have expressed their objections to the potential legalization of many illegal aliens already in the United States. While competing interests have delayed comprehensive immigration legislation, bipartisan support for some provisions will likely lead to revisions of the nation's immigration laws that will have a direct and substantial impact on some industries. The Bush administration recently announced new programs intended to discourage the employment of illegal immigrants. These changes include stricter verification provisions and increased fines and penalties for businesses that knowingly hire illegal immigrants. These initiatives along with the inconclusive nature of recent legislative efforts has left many employers in the restaurant, construction and agricultural industries concerned as they face an uncertain future with respect to their ability to find enough employees to continue growing their businesses.

With an increasingly divergent workforce, immigration issues have become one of the key employment issues many companies now face. This article briefly addresses some of the important concerns of which our clients should be aware when making their employment decisions.

A. Liability for Employing Illegal Immigrants

1. Hiring Illegal Immigrants

The United States Immigration and Customs Enforcement ("ICE"), the largest investigative arm of the Department of Homeland Security ("DHS"), is responsible for identifying and enforcing effective border security measures. ICE is intensifying its worksite enforcement actions, and businesses that employ unauthorized aliens are now facing substantial criminal and civil penalties. During the last two years, ICE investigations have led to criminal charges and convictions against companies in food processing, construction, janitorial and employment placement industries. Company executives, managers, and human resource employees are increasingly facing individual criminal counts relating to their involvement in recruiting, hiring and retaining illegal immigrants. Arrests of employers and their managers increased from 24 in 1999 to 716 in 2006, and then swelled to over 1,400 for 2007. ICE investigations have led to criminal prosecution for related activities involving charges of wire fraud, identity theft, and money laundering. In fact, employers can face charges under the Racketeer Influenced and Corrupt Organizations (RICO), a statutory scheme more commonly associated with organized crime. ICE's new worksite enforcement strategies carry substantial risks, and businesses need to do be aware of relevant laws, their responsibilities and potential liabilities with respect to their employment decisions.

It is unlawful for an individual or business to hire, recruit or refer for a fee an alien knowing that the alien is not authorized to work in the United States. 8 U.S.C. § 1324(a)(1)(A)(2007). Violators are assessed civil penalties that vary depending on the number of any prior offenses. A first time violator faces a civil penalty in an amount from $250 to $2,000 for each unauthorized alien for whom a violation has occurred. These penalties increase to $2,000-5,000 for an employer with one prior violation and to $3,000-$10,000 for multiple offenses. 8 U.S.C. § 1324(e)(4). Persons or entities found to have engaged in a pattern or practice of knowingly hiring or retaining unauthorized aliens also face criminal penalties including a fine of up to $3,000 for each unauthorized alien and/or imprisonment of up to 6 months. 8 U.S.C. § 1324(f)(1). A business can often avoid risking these concerns by complying with established procedures to verify a potential employee's identity and authorization status.

2. Verification of Employment Eligibility

U.S. employers are required to verify the eligibility and identity of all employees hired to work in the United States. A business is prohibited from hiring an individual without complying with the required procedures to verify that an individual is not an unauthorized alien. 8 U.S.C. § 1324(a)(1)(B). To further compliance, employers must verify under penalty of perjury that the individual is not an unauthorized alien based on the employer's examination of approved documentation establishing identity and authorization. To establish identity and authorization, an employee may present a U.S. passport or a resident alien card. An employer may also accept a Social Security card as proof of authorization to work in the U.S. and a state driver's license or identification card to verify the person's identity. Although an employer is not required to be a documentation expert, the employer does have a duty to conduct an inspection and discover any inconsistencies or deficiencies as to the document's genuineness that a reasonable person would ascertain. This vague legal standard has not traditionally caused much concern, but stricter enforcement policies should give companies an incentive to analyze their hiring methods and controls to ensure they do not invite scrutiny.

Employers must complete and maintain Eligibility Verification Forms, known as an I-9, for all employees, including U.S. citizens for a period of 3 years following the hire date or the employee's termination whichever is later. 8 U.S.C. § 1324(b)(3). Employers who hire individuals without complying with the verification system are subject to a civil penalty in an amount between $100 and $1,000 per violation, depending on the size of the business, any good faith effort of compliance, the seriousness of the violation, history of previous violations, and whether the individual hired is an unauthorized alien. 8 U.S.C. § 1324(e)(5).

To help employers in their efforts, DHS/ICE has recently announced the "Mutual Agreement between Government Employers" (IMAGE) program. DHS/ICE is encouraging employers to enroll in this program to receive professional education and training with respect proper hiring procedures and fraudulent documentation detection. Employers wishing to enlist in the IMAGE program must submit to an ICE audit to ensure they are maintaining Eligibility Verification Forms (I-9) and verify the Social Security numbers of their employees. Further, ICE is encouraging employers to utilize E-Verify, an automated computer system that utilizes access to information contained in the Social Security Administration ("SSA") and ICE databases, to confirm employment eligibility. IMAGE participants automatically receive membership to the E-Verify system.

2. New ICE Enforcement Strategies

Due to the lack of effective enforcement and relatively modest penalties, many businesses have viewed potential civil penalties as a minor issue. ICE's recently enhanced enforcement policies have resulted in a substantial increase in the quantity and size of criminal and civil penalties. For the 2007 fiscal year, ICE announced it had already obtained over $30 million in criminal fines and civil penalties. Recent government announcements indicate that investigations and enforcement efforts are going to intensify further. In August 2007, DHS/ICE announced an initiative to coordinate efforts with the SSA to identify employers who receive "No Match Letters" relating to their employees. The SSA sends a "No Match Letter" to an employer stating that the name and/or corresponding Social Security account number does not match the SSA's record. Under the proposed initiative, notices from DHS/ICE will accompany "No Match Letters" from the SSA. ICE will prosecute employers who do not require the employees to correct any clerical or other errors and submit compliant information. If an employee is not able to provide amended documentation or provide the necessary verification within 90 days, the employer is required to terminate the employee or face potential criminal liability. The proposed fine under this initiate could be as much as $10,000 per incident. It is important to note that a company should not discharge or take any action against an employee based merely on the receipt of a "No Match Letter" as it may violate employment discrimination laws. The "No Match Letter" initiative was scheduled to take effect and begin in September 2007, but a judicial stay delayed the program's implementation pending legal challenges.

3. Discriminatory Employment Practices Based on National Origin

The increasingly aggressive nature of enforcement actions may lead many businesses to try to avoid legal difficulties by refusing to hire or employ immigrants irrespective of their residency status. While this concern may be understandable, it is generally unlawful to hire, discharge or take any other employment action based on a person's national origin or status as a legal alien. 8 U.S.C. § 1324(b)(a)(1). Businesses with three or more employees who are found to have committed unfair immigration-related employment practices face a civil penalty of $250-$2,000 per offense for first violation, $2,000-$5,000 if there was one previous offense, and up to $10,000.00 if there were multiple previous violations. 8 U.S.C. § 1324(g)(2)(B).

The Civil Rights Act of 1964 also prohibits discriminatory employment practices based on an individual's national origin. 42 U.S.C. § 2000e-2. The Equal Employment Opportunity Commission ("EEOC") is charged with the responsibility of investigating alleged violations of the Civil Rights Act. Claimants who do not elect to settle their claims in the EEOC process can eventually file a lawsuit in civil court to obtain remedies such as lost wages, back pay, attorneys' fees, and exemplary damages.

Businesses are facing a complex and risky landscape making employment decisions increasingly difficult. Effective planning to prevent avoidable risks requires a comprehensive understanding of ever-changing legal obligations. While ICE enforcement actions are likely to have a diverse impact on companies depending on their respective industries, it is clear that employers are going to face the possibility of significant liability with respect to immigration issues. In light of these risks, it is imperative that companies plan and discuss their practices with legal counsel who are well versed on immigration matters and have significant experience with other important employment issues.

Author: Michael McTaggart
Phone: (713) 951-1008
Fax: (713) 951-1199
Website: www.sswpc.com