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On August 7, 2009, U.S. Immigration and Customs Enforcement (“ICE”) announced that Shipley Do-Nut Flour and Supply Company, Inc. (“Shipley”) was sentenced to court supervision, forfeiture of $1.334 million to ICE, and a criminal fine of $250,000 for conspiring to harbor illegal aliens. In addition, three company managers and the company owner were sentenced to six months probation and each received a hefty fine.

According to the company’s website, Shipley supplies baking materials and provides logistical support to retail stores, and to 120 franchises in Texas, Alabama, Arkansas, Louisiana, Mississippi and Tennessee. Trouble for Shipley arose from a criminal investigation initiated by ICE in January of 2008 which included interviews with former employees and a thorough review of Shipley’s I-9 records and SSA No-Match letters. In April of 2008, an enforcement action was taken by ICE agents that resulted in the administrative arrest of 27 unlawful workers employed by the company.

The I-9 system of employment verification, created by the Immigration Reform and Control Act of 1986, is the nation’s sole mandatory employment eligibility verification program. All U.S. employers are responsible for the completion and retention of Form I-9 for each individual hired for employment in the United States, including citizens and non-citizens. The penalties, both civilly and criminally, are becoming too severe to ignore. Civil fines for employers can range from $3200 (per violation) for a first offense to $16,000 (per violation) for a third or subsequent offense. All company representatives verifying employment eligibility of employees are potentially liable, both criminally and civilly, for errors in completing I-9 Forms.

In light of this case and ICE’s issuance of over 650 audit requests last month, it is imperative now, more than ever, that employers heed the warning. You may be asking, “what can my company do to avoid criminal and civil penalties related to I-9 compliance?” Employers must implement I-9 Compliance Programs that include proper training, internal audits, and third-party audits. The voluntary E-Verify, an online system operated jointly by the Department of Homeland Security and the Social Security Administration (SSA), also provides employers with a “safer harbor” within which to operate.

For more information on effective I-9 compliance programs, see my post entitled “Employers: How not to lose your shirt (and everything else)” or contact me at obranch@sandsanderson.com.

Tags: audit, I-9, I-9 compliance, I-9 Compliance Program, I-9 Form, ICE, Immigration and Customs Enforcement, Immigration Reform and Control Act of 1986, Inc., IRCA, Shipley, Shipley Donut Flour and Supply Company

This entry was posted on Tuesday, August 11th, 2009 at 9:10 am and is filed under employment law, I-9, I-9 compliance, immigration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.