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The New Age of Immigration Compliance: Pitfalls and Best Practices

Old news: U.S. Congress and the President are at odds over the immigration reform proposals and executive action resulting from decades of inaction otherwise.

Current news: U.S. businesses find out they are not sideline observers of political struggles, but front line action participants and potential targets from both sides of the immigration battle.

The pending promise of the executive action and the heated discussions surrounding it have not provided the immigration compliance reprieve sought after by many U.S. employers bound by the 1986 law making them immigration enforcers-in-chief. On the contrary, the recent years have brought some of the most aggressive compliance monitoring action in memory.

While the President’s plans might eventually bring relief to millions of those living and working in this country illegally, the current situation does not allow U.S. companies to put compliance with the immigration law requirements on the back burner. The influx of government audits and substantial civil fines, which in fiscal year 2013 reached a record of nearly $16 million, are a clear indication that taking a relaxed approach towards compliance is quite premature and costly. All businesses can find themselves on the receiving end of an audit, but employers in the industries that have traditionally been the largest consumers of manual and lower skilled labor, such as construction, manufacturing and hospitality, bear the disproportional audit brunt.

A few measures of corporate immigration hygiene will go a long way toward warding off the usual audit troubles and costs.

All U.S. employers must complete employment eligibility verification and maintain Form I-9 for each employee hired after November 5, 1986. I-9 files should be kept separate and apart from personnel files and can be kept either at corporate headquarters or branch offices of multi-location companies. However, in case of an audit, the company would be given just three days to present its I-9 records to the Immigration and Customs Enforcement (ICE) auditors. It is important to keep I-9 records for the current workforce separately from those for former employees, in case a subpoena covers only the current workers.

A few tried and tested immigration practices can serve to protect a business:

  • Establish clear and consistent employment eligibility verification procedures, with trained HR personnel exercising close supervision of its implementation;
  • Review government compliance systems (e.g., E-Verify, IMAGE) to decide whether a sign-up is within the company’s interests and practical capabilities;
  • Research best practices to decide whether I-9 process would remain hard-copy or electronically based, and whether the currently optional copying of documents presented for I-9 verification is to be pursued;
  • Perform in-house audits of I-9 files every six months and after any major corporate changes (e.g., new business acquisition, mergers, lay-offs, and hiring surges) and assure appropriate corrections; and
  • Assure regular training for HR professionals charged with I-9 compliance on a regular basis and keeping training records.

Compliance Mistakes and Remedies

  1. Mistake: Belated I-9 completion

Remedy: Follow the 3-Day Rule. Have a new hire complete Section 1 of Form I-9 on the first day of employment, and perform documents review and sign Section 2 within three days of employment start.

  1. Mistake: Telling employees which documents to present for I-9 verification.

Remedy: Instruct the worker to select one document from List A on the back of Form I-9, or one document from List B and one document from List C. An employee chooses documents to present for verification, and the employer is legally obligated to accept facially valid documents.

  1. Mistake: Failure to properly maintain I-9 files.

Remedy: I-9 files, which contain fully completed and executed Forms I-9 and copies of documents evidencing employment eligibility (if the company copies documentation presented as part of the employment eligibility verification), should be kept separately from all other employee records. They should be retained throughout the worker’s tenure at the company and for one year from the date of employment termination or three years from the date of hire, whichever comes later.

  1. Mistake: Failure to Re-verify employment eligibility or unnecessary re-verification.

Remedy: While identity-confirming documents (e.g., driver’s license) and certain documents that confirm both identity and work authorization (e.g., U.S. passport, Permanent Resident Card) do not need to be rechecked upon expiration, all temporary employment authorizing documents (e.g., Employment Authorization Document or EAD) should be calendared for re-verification at expiration time. During re-verification, the employee should again be offered a choice of a List A or a List B and C documents to present.

  1. Mistake: Failure to Purge When Allowed.

Remedy: Purge I-9 files upon the mandatory record maintenance period completion (see Item 3 above), but even outdated records should not be destroyed upon an audit subpoena issuance.

  1. Mistake: No Self Audits.

Remedy: Routinely perform in-house audits every six months, and always audit I-9 records as part of corporate due diligence, and before and after any significant business changes.

  1. Mistake: No Clearly Stated Consistent I-9 Policies.

Remedy: Establish and disseminate the best I-9 compliance practices and clearly state expectations from managers of all levels to always act in good faith and report immigration problems as soon as they become aware of them. Even a first line supervisor’s knowledge of his subordinate’s illegal status would be imputed upon the company under the actual knowledge concept. Additionally, inaction in response to credible information regarding unauthorized employment from trustworthy sources and/or I-9 files with obvious deficiencies will be viewed as evidence against the employer if the audit results in an investigation.

  1. Mistake: Failure to realize that immigration is a specific area of legal expertise and acting “on a hunch.”

Remedy: Since immigration is a heavily regulated legal field with multiple and very cumbersome regulations, look to immigration counsel for guidance and call upon them for the I-9 responsible personnel training and immediately upon an audit subpoena receipt. Never turn in any audit documentation without counsel’s review.

Following the steps above can help establish and maintain the strongest immigration practices and protect the business in an audit and during the unsettled immigration times we live in. Moreover, immigration compliant companies are likely to be in the best position to take advantage of the executive action and/or a full immigration reform when it occurs.

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