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.

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.

This newest enforcement effort by ICE follows a recent Department of Homeland Security (DHS) announcement that ICE will focus its resources on criminal prosecution of employers who knowingly hire illegal workers and that the agency “will use all available tools, including civil fines and debarment, to penalize and deter illegal employment.”

“Knowingly hiring” can be a tricky legal concept. Employers can also be held liable if they had “constructive knowledge” that a worker wasn’t eligible for employment. Constructive knowledge means that the employer “should have known.” Constructive knowledge has been found where employers did not complete I-9 forms or completed I-9 forms incorrectly.

Many errors on forms result from inadvertent mistakes pertaining to preparation, storage, and retention that can result in civil fines, and even criminal charges. 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.

So what can U.S. businesses do to mitigate exposure stemming from their I-9 programs? It is imperative, now more than ever, that employers implement I-9 Compliance Plans that include proper training, internal audits, and third-party audits. The voluntary E-Verify program (formerly the Basic Pilot/Employment Eligibility Verification Program), 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.

As of September 2008, 31,000 employers have voluntarily enrolled in the program. On June 6, 2008, President Bush issued Executive Order 13465 “Economy and Efficiency in Government Procurement through Compliance with Certain Immigration and Nationality Act Provisions and the Use of an Electronic Employment Eligibility Verification System,” This Executive order provides that “executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment of: (i) all persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the federal contract.”

The final rule was to be effective as of January 15, 2009. However, as mentioned above, the effective date of the new rule has been delayed several times and will now be effective September 8, 2009.

All employers, whether Federal Contractors or not, may enroll for E-Verify online at www.dhs.gov/E-Verify.

With a few exceptions, the new form is nearly identical to the previous edition. Most notable among the changes to the form is that employees will no longer be able to present expired documents. Previously, employees were allowed to present expired driver’s licenses or U.S. passports. There is also an additional status box in the emloyee attestation in Section 1 of the form. The new I-9 form can be found on the United States Citizenship and Immigration Services’ (USCIS) website.

As I have written in earlier posts, Form I-9 Compliance can be far more complicated than one might assume. With the increased liability of companies for failure to comply with employment eligibility requirements, proper training is imperative.

So what can U.S. businesses do to mitigate exposure stemming from their I-9 programs? It is imperative, now more than ever, that employers implement I-9 Compliance Plans providing four primary tools to mitigate potential liability.

Tool 1: Proper I-9 Training
The majority of Form I-9 errors have little to do with unauthorized workers and more often involve a lack of proper training resulting in inadvertent errors. Errors are also often a result of a lack of understanding of Immigration Documents such as Nonimmigrant and Immigrant visas, Employment Authorization Documents, and Permanent Resident Cards.. Knowing which documents are acceptable and which require re-verification in the future can be quite technical.

Tool 2: The Self Audit
Most often I-9 forms are completed, filed, and never reviewed thereafter. By conducting regular self-audits, employers not only strengthen their “good faith” compliance but provide themselves with the opportunity to evaluate their progress and identify areas of weakness requiring further training or amendment of their I-9 Compliance Program.

Tool 3: The Independent Audit
Because these issues can be highly technical, having regular independent I-9 Audits conducted by counsel not only greatly strengthens the employer’s “good faith” compliance, but provides further opportunity for review of procedures and error-spotting by an attorney with greater expertise in the field.

Tool 4: E-Verify
E-Verify (formerly the Basic Pilot/Employment Eligibility Verification Program) is an online system operated jointly by the Department of Homeland Security and the Social Security Administration (SSA). Participating employers can check the work status of new hires online by comparing information from an employee’s I-9 form against SSA and Department of Homeland Security databases.

Although in this age there is no absolute protection for employers against potential liability in connection with I-9 Compliance, these tools are vital in mitigating potential liability.