What The Immigration Debate Means For Business Owners

What The Immigration Debate Means For Business Owners

Although the 2016 presidential election is still over fourteen months away, talk of immigration reform has already begun to dominate the headlines. From now until next November, we will likely be subjected to the usual political talking points about the 11 million undocumented individuals residing in the U.S., the building of walls along the Mexican border, paths to citizenship for those who currently have no lawful status, and the impact current and proposed policy will have on the American worker. But what about the American employer? Where in this dialogue does a business owner- small, medium, or large- fit in?

When discussing immigration reform, politicians from both sides of the aisle often talk about the need for mandatory employee verification systems, giving many of their constituents the false impression that the U.S. Government currently stands idle while companies continue to employ unauthorized workers. The reality, however, is that the federal government has become increasingly aggressive in targeting business owners in its enforcement of the nation’s workforce immigration laws.

In 2009, Immigration and Customs Enforcement (ICE) revised its worksite enforcement strategy to target not only foreign workers, but also their employers. This strategy prioritizes the use of both criminal prosecutions against business owners found to be in violation of their compliance obligations and utilizes all available civil and administrative tools, including audits and investigations that often result in the imposition of significant civil fines and debarment. In fiscal year 2013 ICE made 472 arrests (179 of those arrests were owners, managers, supervisors and human resources employees), served 3,127 Notices of Inspection, resulting in a total of $15,808,365.00 in administrative fines, and debarred 277 businesses that were in violation of immigration workforce compliance laws.

Additionally, the size and type of company seems to have become less of a factor in ICE’s current enforcement strategy, as a majority of litigated cases involved small business. Meanwhile, in June 2013 federal authorities seized 14 7-Eleven stores on Long Island and in Virginia, arresting nine owners and managers, and seized property, including five homes.

ICE’s enforcement strategy goes beyond targeting employers that knowingly hire unauthorized workers. In fact, a large portion of the millions of dollars in penalties have been imposed on businesses after an ICE audit revealed so called “paperwork violations” pertaining to the completion and retention of employee I-9 records. Common substantive paperwork violations that routinely result in the assessment of fines include: failure to complete a section in a timely manner, failure to check an immigration status box, failure to list all required document information, not conducting re-verification of an employee in a timely manner, and failure to sign and/or date the appropriate section. While an ICE audit that reveals substantive errors in an I-9 form can lead to penalties of up to $1,100 per employee, even more troubling for business owners is that an audit will often inspire more expansive ICE investigations. These investigations can lead to criminal prosecution or the imposition of civil fines of up to $16,000 per employee. In 2013 the IT company Infosys agreed to pay $35 million in order to resolve a federal investigation related to I-9 paperwork violations and visa matters. According to the company’s website, “the settlement [was] focused on historical I-9 paperwork errors from 2010-2011 that Infosys began correcting before the investigation began.”

ICE’s worksite enforcement policies are not limited to companies that directly employ foreign workers, but also extend to those whose workforce is comprised of independent contractors or sub-contractors. For instance, Wal-Mart reached a settlement with the federal government in which it paid $11million after an ICE enforcement action revealed that companies hired by Wal-Mart to clean its stores were themselves employing unauthorized workers. As part of the settlement, Wal-Mart also agreed to create its own immigration compliance program, which included a policy of making sure its contractors took “reasonable steps to comply with immigration laws.” Additionally, ICE is increasingly seeking to impose fines against companies they believe are attempting to skirt their I-9 obligations by classifying workers who meet the definition of an employee under the immigration law as independent contractors.

Considering the continued expansion of ICE’s investigations into business owners who rely on foreign labor and the rare bipartisan agreement over the need for a stricter worker verification mandate, it is clear that more and more companies will find themselves the subject of an ICE investigation. Therefore, it is vital for all companies, no matter the size, to implement an immigration compliance program. A sufficient program should at minimum establish a proper I-9 document production and retention system; procedures on how to respond to an ICE audit and the personnel responsible for each aspect of that audit response; a statement on whether the business utilizes E-Verify; an internal I-9 audit policy that includes appropriate and lawful responses to potential violations and discrepancies; policies on how the company complies with worker verification requirements while also not being in violation of anti-citizenship status or national origin discrimination laws that govern the worker verification process; and a contractual provision in standard contracts, which includes certain workforce compliance language (for companies that contract with other businesses). Only by implementing a comprehensive immigration compliance program can a business be truly prepared to defend against the type of ICE audits and investigations that have and will continue to become more prevalent in the federal government’s immigration policy.

1. http://www.ice.gov/factsheets/worksite
2. http://www.nytimes.com/2013/06/18/nyregion/us-seizes-14-7-eleven-stores-in-immigration-raids.html


Contact Cohen Forman Barone Today

Call (212) 577-9314 or Send Us a Message
    • Please enter your first name.
    • Please enter your last name.
    • Please enter your email address.
      This isn't a valid email address.
    • Please make a selection.
    • This isn't a valid phone number.
      Please enter your phone number.
      You entered an invalid number.
    • Please enter a message.