Avoiding Immigration Audits

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You can’t inoculate your company against threats of an immigration audit, but you can take steps to minimize the risk.

As of early November 2010, U.S. Immigration and Customs Enforcement (ICE) had officially targeted more than 3,000 employers since announcing a strategy in April that focuses on the executives and managers involved in illegal hiring processes rather than on unauthorized workers.

At best, these audits are time-consuming; at worst, they lead to significant fines, penalties and criminal prosecution. In September 2010, the agency announced that a settlement for more than $1.04 million had been reached with Abercrombie & Fitch for violations. In November 2010, the president of a California furniture manufacturer was charged with criminal violations stemming from an investigation into allegations that the company hired unauthorized workers.

Republican control of the U.S. House of Representatives, convening this month, isn’t likely to bring quick relief. An increased focus on enforcement “started under [President George W.] Bush. It continues under [President Barack] Obama. I don’t think any change in Congress will have a significant effect,” says Mira Mdivani, an Overland Park, Kan., attorney with the Mdivani Law Firm and president of the Corporate Immigration Compliance Institute. She expects higher rates of audits to continue “until we have some sort of immigration reform.”

Who Gets Audited?

All employers must verify the employment eligibility and identification of anyone hired to work in the United States. In an audit, federal immigration agents review the Form I-9, Employment Eligibility Verification, that employers are required to keep on file.

Companies are selected for audits “based on leads and intelligence information that could indicate some kind of wrongdoing,” according to Brett Dreyer, the special agent who oversees ICE’s worksite enforcement program.

“Based on lessons learned” from audits conducted by the former Immigration and Naturalization Service in the 1990s, “We do not do random audits. We do not focus on particular industries,” Dreyer says.

Yet Mary E. Pivec, a partner with Keller and Heckman in Washington, D.C., has found that “companies that have records of wage and hour abuse or some other documented complaint” tend to be selected for audits. “You typically find those in construction and restaurants.” Also, “several very large companies are being audited because of interest in their independent contractors,” she says.

Look Both Ways

To prepare for an audit, Bonnie Gibson, a managing partner in Phoenix for Fragomen, a law firm specializing in immigration, recommends that employers “Look forward and back.”

Looking forward means making certain that I-9 compliance “moves up HR’s priority list. … What is your policy? What does it say? Who is responsible for I-9 compliance? Are they trained? Are they accountable?” Gibson asks.

Looking backward means conducting an internal audit. “What can be corrected should be corrected. What can’t be corrected should be explained,” she says. If mistakes in I-9 forms are fully corrected, “there’s a strong legal argument that it is as good as having done the I-9 right in the first place. It’s a real incentive to audit.”

Take care when choosing vendors or software to handle I-9 compliance. In the Abercrombie & Fitch case, federal auditors found that the company’s software left out a critical component—having individuals attest to their immigration status.

When the $1.04 million fine was announced, ICE special agent Brian Moskowitz said, “Employers are responsible not only for the people they hire but also for the internal systems they choose to utilize to manage their employment process, and those systems must result in effective compliance.”

Advises Pivec: “That’s a wake-up call to any employer to look at their system. Have it checked out by a person who knows.”

Using E-Verify

Immigration experts say there are advantages to using E-Verify, a free government web-based program employers can use to check newly hired employees’ eligibility to work in the United States.

Enrolling in E-Verify “is not an inoculation” against an audit or penalties, Gibson says, “but it is helpful. It is sophisticated due diligence.”

The system has been widely criticized, but officials have made a number of improvements, she adds: “E-Verify as an organization has a culture of customer service. It has been responsive to employer and advocacy group input. It has worked hard to correct systemic flaws, but some things are just hard to correct.”

If You Are Audited What should you do if you are notified that you will be subjected to a U.S. Immigration and Customs Enforcement audit? “Call your lawyer,” says attorney Bonnie Gibson of Fragomen. Then, “pull a payroll record and make sure you have an I-9 for everyone.” The government gives companies three days to turn over documents, but they may ask for an extension. Managers often think they have to give up their documents as quickly as possible within those three days, says attorney Mary E. Pivec of Keller and Heckman. “They think they are cooperating and being prompt, but they get nothing for that,” she notes. Pivec works with clients to conduct an internal audit before the federal audit so that if the agency “loses a document or makes errors, we have control. We know what the document looked like before we turned it over.” But having time to review your documents doesn’t necessarily mean time to make corrections, Gibson warns. “There’s a dispute about whether corrections that are made after notification is served are considered,” she says. She recommends companies fix the mistakes before they’re hit with an audit.

Pivec cites a more user-friendly website as one of the improvements made to E-Verify, but she says problems remain. For example, ICE officials do not credit E-Verify’s determinations as definitive, and E-Verify cannot detect identity theft.

“There are folks who are getting through with fake [identity] cards,” she says. “Why isn’t the government providing immunity for employers that are using E-Verify? Employers should not be subject to a ‘gotcha’ for identity theft that is not detected by the government’s own system. … The employer is obligated to accept final confirmation from E-Verify.”

Recruiters are not in a position to police for identity fraud, Pivec says. “You need to be a private eye in addition to being an HR manager or a line manager. There are lots of generations of these [identity] cards and you’re supposed to be familiar with all of them … so you can sense that a card was fake or related to somebody else.”

E-Verify does offer employers some protection, according to Gibson. As a matter of law, E-Verify gives the presumption of legal status to any employee who passes through the system. She says ICE officials would have a higher burden trying to penalize the employer who uses E-Verify.

At the policy level, she adds, an employer that participates in good faith is perceived as a “good guy. But that doesn’t mean you can’t be held accountable.”

E-Verify “takes some of the burden” from companies, agrees Dreyer. “It’s a huge help for employers. When they use E-Verify, it greatly mitigates their chance of hiring unauthorized workers. If you are using E-Verify, the odds of your getting a complaint” that might trigger an audit are reduced.

IMAGE Problems?

In 2006, the agency launched the ICE Mutual Agreement Between Government and Employers (IMAGE) program to help employers in certain sectors develop a more secure and stable workforce and to enhance awareness of fraudulent documents through education and training.

Employers seeking to be “IMAGE Certified” must agree to:

• Complete a self-assessment questionnaire.
• Enroll in E-Verify.
• Enroll in the Social Security Number Verification Service.
• Adhere to 12 IMAGE Best Hiring Practices.
• Undergo an I-9 audit by ICE.
• Sign a partnership agreement with the agency.

Mdivani does not recommend that her clients sign up for the IMAGE program because of “a couple of provisions that are invasive.” The first is the obligatory federal audit. The second is a best practice that requires the company “to create a snitch line. That’s not acceptable to my clients. There are 12 items on that list—my clients can do 10 and will be protected” adequately, she says.

Pivec agrees that not a lot of employers want to conduct the audit on a voluntary basis. “They would rather not have the disruptions to business,” she explains.

Gibson believes that the advantages of participating “probably don’t outweigh letting the government into your business so directly.”

Dreyer, who heads the program, believes that there are misconceptions about IMAGE. It’s not meant for every company, he says, noting that ICE doesn’t have enough resources to verify every company in the country. Instead, the program is for “role-model businesses that are pillars in their industries that want to partner with the government.”

If a company claims it’s impossible to have a legal workforce in an industry such as construction, retail or janitorial services, Dreyer says, IMAGE members can counter that argument.

Slightly more than 100 companies, including Avant Healthcare Professionals, Bacardi Corp., First Credit Union and General Dynamics, participate in IMAGE.

For most companies, Dreyer says, the program educates managers on how to comply with the requirements of immigration law. “We want to focus on getting people to use our best practices—notably, using E-Verify,” he explains.

Even if employers don’t use all 12 best practices, they should adopt as many as they can, Dreyer says, because doing so “reduces the chance of hiring an unauthorized worker” without demanding the use of major resources.

The author is an Arlington, Va.-based freelance business writer and author of Next-Generation Wellness at Work (Praeger, 2009).