United States: Increasing I-9 Audits And The Risks Of Turning A Blind Eye

Last Updated: August 15 2018
Article by Kathleen C. Walker

On July 24, 2018, Homeland Security Investigations (HSI) announced that it had issued more than 5,200 I-9 audit Notices of Inspection (NOIs) nationwide since January of 2018 as part of a two-phase operation. The second phase of the operation was conducted from July 16 to July 20, during which HSI agents served 2,738 NOIs and made 32 arrests. 2,540 NOIs were served and 61 arrests were made during the first phase of the national operation from January 29 to March 30. The Acting Executive Associate Director of HSI, Derek N. Banner, noted that HSI will honor its commitment to increase I-9 audits to create a culture of compliance by United States (U.S.) employers. In fiscal year 2017, businesses were ordered to pay $97.6 million in judicial forfeitures, fines, and restitution in addition to $7.8 million in civil fines. Asplundh Tree Experts, Co. headquartered in Willow Grove, Pennsylvania, was ordered to pay a forfeiture money judgment of $80 million dollars and an additional $15 million in civil fines, which was the largest civil settlement ever levied by Immigration and Customs Enforcement (ICE) in September of 2017 after a six year investigation.

In addition, in the Spring of 2019, the Social Security Administration (SSA) is apparently resurrecting the issuance of employer no-match notices (EDCOR Code V letters) when at least one W-2 form reflects a name and social security number mis-match. On August 23, 2012, SSA suspended all DÉCOR letters due to budgetary reasons. DÉCOR letters were sent to employees regarding a detected mis-match. Back in October of 2009, the Department of Homeland Security (DHS) rescinded the no-match rule implemented in 2007 during the Bush Administration, which was challenged by the AFL-CIO and the U.S. Chamber of Commerce. The 2007 rule established "safe harbor" procedures for employers receiving no-match letters. The rule was never implemented due to a federal court injunction. It is advisable to dust off prior policies regarding no-match letters and to develop standard protocols with the help of legal counsel.

In addition, it is important to remember that the receipt of no-match notices/letters is not to serve as a basis to take "any adverse action against an employee," but such notices in combination with other factors can potentially provide an employer with "constructive knowledge" as to identity or work eligibility issues regarding an employee. In the Guidance Memo issued by ICE regarding internal employer audits, ICE notes that, "An employer violates the employer sanctions provision of the INA if it continues to employ an employee with actual or constructive knowledge that the employee is unauthorized to work. While tips concerning an employee's immigration status may lead to the discovery of an unauthorized employee, tips and leads should not always be presumed to be credible."

Human Resources (HR) personnel are often the canaries in the mine, who are the employer's representatives first presented with potential credible information that may constitute "constructive knowledge" that an individual has assumed another identity or is not work authorized. Such information places a heavy burden on the HR representative as to how to respond to such signs legally. A failure to take appropriate action can lead to criminal consequences in the worst-case scenario.

What should HR do when it is asked to either participate in (or turn a blind eye to) illegal immigration in the workplace?

An HR employee in this situation is potentially choosing exposure to criminal prosecution. No job duties should include such risks. HR personnel should document concerns to management in writing and not participate in a policy of hear and see "no evil." For context, please refer to the news releases regarding worksite enforcement actions of ICE. In particular, as noted above, the settlement agreement in the Asplundh Tree Experts, Co. (Asplundh) matter is a story to know. In Asplundh, company management remained "willfully blind" while lower level managers hired and retained employees knowing that the workers were not eligible to work lawfully in the U.S.

Any person engaging in a pattern or practice of violations as to the knowing of a hire or continuing to employ unauthorized foreign workers may be fined not more than $3,000 for each unauthorized foreign national, imprisoned for not more than six months for the entire pattern or practice, or both.

When are employers responsible if employees have false documents?

Therefore, the question implies that the employer actually "knows" that an employee has a false identity document. In the I-9 process, an employer is required to review acceptable document(s) on the Form I-9 that establish identity and/or employment authorization with the person presenting the documents physically in front of the reviewer for the company. In some cases (e.g., List A documents), the identity document also establishes work authorization. If an employer has actual knowledge that an employee has presented a false List A document, which is often a legal permanent residence (LPR) card (commonly referred to as a "green card") and the employer is knowingly continuing to employ the employee who is not work authorized, then the employer is subject to the penalties outlined earlier in this article.

The more difficult analysis is when an employer is deemed to know that an individual is not work authorized due to the employer's constructive knowledge. Constructive knowledge is knowledge that may be fairly inferred through notice of "certain facts and circumstances, which would lead a person, through the exercise of reasonable care, to know about a certain condition."

If the employer knows that the work authorizing document is false or does not belong to the person presenting or using it, then the employer should not hire the person or end their employment since federal law prohibits the person's employment. Of course, the employer may decide to ask the employee if they have any other work authorizing and/or identity document. Employers with employees presenting work authorization as Deferred Action for Childhood Arrival (DACA) beneficiaries are often faced with a decision whether to forgive the prior presentation of fake or invalid documents by the employee. USCIS issued guidance on this point for employers back in 2012, which should be referenced.

Can we truly believe an employer with dozens or more employees caught in an ICE raid did not know they were undocumented immigrants?

Employers are not held to the standard of forensic document experts. They must accept documents that reasonably appear to be genuine and relate to the person presenting them. The list of acceptable documents for List A, B, and C on the Form I-9 are relatively extensive and the exemplars provided even on I-9 Central by U.S. Citizenship and Immigration Services (USCIS) are not extensive enough to cover the variety of formats used for the different documents over the years. In particular, the social security card's numerous versions are difficult to assess and the SSA does not provide extensive exemplars. Therefore, yes, it is possible to think a permanent resident card or social security card, for example, is legitimate on its face when it may not be. An employer may not know until ICE actually audits the Forms I-9 that it has a fraudulent document problem, which can result in a devastating loss of employees in some cases. Certainly, technological advances improve the quality of fake documents and hopefully the ability of auditors to detect them. It is even more challenging to identify someone who is assuming another person's identity.

If an employer hires temporary workers through a staffing agency, what responsibility does it have to ensure that workers are authorized to work in the United States? Can an employer be held liable for an agency's mistakes or willful violations?

In most cases, the staffing agency will be the employer for Form I-9 compliance purposes. An agent will assess what entity controls the actions of the person performing the work. A company can be deemed the employer for I-9 compliance purposes, if it is using a contract, subcontract, or an exchange to obtain labor or services of a foreign national in the U.S. knowing that the individual is unauthorized to work legally in the U.S. Thus, if an employer knows that a staffing agency is sending unauthorized workers to it and it is using the staffing agency with that knowledge, it is subject to potential criminal penalties. It is also important to remember that the use of a Professional Employer Organization (PEO) does not necessarily insulate the entity using the PEO's employees, if applicable, from I-9 compliance responsibility.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Kathleen C. Walker
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