Immigration Update: Strategies for Effective Corporate Compliance

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1 Immigration Update: Strategies for Effective Corporate Compliance Presented by: Gus M. Shihab, Esq. The Law Firm of Shihab & Associates Co., L.P.A. 65 East State Street, Suite 1550, Columbus, Ohio October 8 th, 2013

2 I-9 Compliance The Immigration Reform and Control Act of 1986 ( IRCA ) requires that all employers complete Employment Eligibility Verification (Form I-9) for newly hired employees. The employee must provide documents that he/she is eligible to work and their identity must match that of the documents provided. Employee must complete Section 1 no later than the first day of work. Employer completes Section 2 no later than 3 business days after employee begins. If employee s work authorization expires, or if an employee is a rehire, complete Section 3.

3 I-9 New Edition On March 8, 2013 a new edition of Form I-9 was released. Revisions include new user-friendly instructions for completing the form. Employers must now use the new edition for all new hires and reverifications. Employers should not complete a new Form I-9 for current employees if a properly completed Form I-9 is already on file. The new forms are available for download at

4 Retention Period for I-9s Forms must be retained for: One year following an employee s termination OR Three years from the employee s date of hire Whichever comes later

5 I-9 Record Keeping Requirements Must keep originals on file, photocopies are NOT acceptable. Employers may choose whether or not to keep copies of supporting documentation submitted to complete Form I-9 Whatever your decide must be implemented across the board for all employees, otherwise you may be in violation of anti-discrimination laws. Once copies are made, DHS regulations provide that they must be retained with the Forms I-9. Storage on-site or at off-site storage facility Must be able to present forms to government officials within 3 days of request.

6 Actual and Constructive Knowledge IRCA prohibits knowingly hiring or continuing to employ an unauthorized worker. Conditions that can establish rebuttable presumption of constructive knowledge: Failure to complete or improper completion of Form I-9 Having information that would indicate that the alien is unauthorized to work Even in the absence of actual knowledge, the law will find that the employer had sufficient knowledge of the employee s lack of work authorization leading to civil and/or criminal liability. Liability cannot be evaded by hiring independent contractors Liability can extend to hiring of unauthorized independent contractors especially if the employer had actual knowledge that the workers were unauthorized. Recent case law has broadened the interpretation of constructive knowledge to include instances where an employer is in possession of a Form I-9 which indicated the alien was out of status but failed to re-verify.

7 ICE Priorities: Preventing an ICE Raid National Security and Public Safety. Targeting criminal networks that exploit vulnerabilities of the immigration system. Increase in interior criminal enforcement of egregious employers. Emphasis on electronic verification systems, Social Security and IRS no match letters a evidence of constructive knowledge.

8 I- 9 Penalties Violations Employing Unauthorized Aliens Improperly Completed or Missing Form I-9 Committing Document Fraud Unlawful Discrimination Engaging in a Pattern of Hiring Unauthorized Aliens (Criminal) Fines & Penalties $375 to $16,000 per worker $110 to $1,100 per form $375 to $6,500 per worker $375 to $16,000 per violation $3,000 per worker and 6 months in prison

9 Avoiding I-9 Audits Failing to re-verify employment eligibility of employees with temporary work authorization Employers should note the date that re-verification is required and remind the employee 90 days prior that they will need to present a List A or List C document showing continued authorization. Missing or inaccurate information in Section 1 Employers should review the information provided by the employee to assure that all fields are complete and that the employee has signed and dated the form. Conduct Internal Audits Periodically review I-9 Forms to discover missing information. If a mistake or omission is discovered, correct it immediately and initial/date any changes. If an employee is missing an I-9 form altogether, complete one immediately on the newest issued edition of the form. Attach an explanation to the form for your records. Avoid knowing hire or knowing retention violations, terminate employees who cannot provide valid documents.

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11 Developing Program to Minimize Risk 1. Establish Standards & Procedures 2. Organizational Commitment and Assign Responsibility 3. Commit management to perform due diligence in hiring procedures 4. Provide effective consistent and continuing communications and training 5. Continuously monitor, audit, and evaluate work progress and problems 6. Promote and evaluate policies through organizations 7. Respond to evaluations

12 I-9 Violations in the News Macy s (2013) Employment eligibility reverification violations Civil penalties of $175,000 and back pay of $100,000 Abercrombie & Fitch (2010) I-9 audit of retail stores in Michigan in 2008 revealed deficiencies in electronic I-9 system Civil penalties of $1,047,110 Krispy Kreme (2009) ICE conducted I-9 inspection after information from Butler County Sheriff s Office that one of the company s factories in Cincinnati employed dozens of illegal aliens. Civil penalties of $40,000 Chipotle (2012) Fired 50 employees because of deficient I-9 forms. Fines have not yet been assessed.

13 Developing Corporate Immigration Policy Establish a checklist of immigration related organizational issues Who are the players in the immigration process? Draft an immigration related company purpose statement Internal Auditing Process Examine current and future verification procedures Examine contractors and subcontractors with third parties Drafting comprehensive immigration compliance manual

14 Developing Corporate Immigration Policy Decide whether to use electric management systems like E- Verify Create culture of compliance Management buy in from top to bottom Be ware of discriminatory practices Train all personnel involved Create periodic compliance audits Establish a reporting system

15 I-9 Procedures for Foreign Nationals Admission (I-94) Number Retrieval New electronic process For those that entered prior to the automated process, paper I-94 s are acceptable

16 I-9 Procedures for Foreign Nationals

17 Hiring non-u.s. Citizens: Professional & Specialty Occupations H-1B Visas Temporary employment of foreign workers in the United States in specialty occupations or as fashion models. Compliance by Employers Labor Condition Application for each permanent work site Pay required wage rate Working conditions and benefits Posting requirement

18 H-1B: Notice and Record Keeping Requirements Notice Requirement Employers must post notice of filing in two conspicuous locations at the employer s establishments. Recordkeeping (Public Access File) Copy of Certified LCA Proof of Compliance with Internal Notice Requirement Wage rate to be paid Explanation of system used to determine actual wage Documentation used to establish prevailing wage Employee notification requirement Summary of Benefits

19 H-1B Visa (LCA) Audits The U.S. Department of Labor may audit a company at any time to determine if the company is following the law. Audits are usually triggered by a complaint, which normally is submitted by a current or former disgruntled employee. Audit Procedure Letter from USDOL requesting production of documents (Public Inspection File) USDOL representative will visit the company on the specified date to conduct the audit Administrator s Determination Letter issued once investigation is complete Penalties/Fines assessed

20 LCA Violations, Fines and Sanctions Violations Penalties Failure to maintain a public access file for each LCA Failure to provide internal notices, create wage memoranda, and give copy of LCA to alien employee Failure to amend LCA when H-1B worker changed locations Failure to accurately select the appropriate wage level for an H-1B employee Failure to include the correct wage on the LCA Failure to maintain responsibilities of an H-1B dependent employer Civil monetary fines Level 1: substantial omission, inaccuracy, negligence - $1,000 maximum fine per violation Level 2: willful violations - $5,000 maximum fine per violation Level 3: willful termination of U.S. employee within 90 days before or after filing H-1B petition to fill same position - $35,000 maximum fine per violation Restricted access to additional H-1B workers Payment of back wages

21 Bona Fide Termination of H-1B Employee Employer obligated to pay required wage 30 days after worker arrives in the U.S. and until the end date of employment on the LCA or until there has been a bona fide termination of employment Three Steps to effect a Bona Fide Termination Step 1: give employee notice that employment relationship is terminated Step 2: notify DHS that employment relationship has been terminated Step 3: pay reasonable costs of return transportation of foreign national only if dismissed from employment prior to end of authorized period of stay. If H- 1B worker voluntarily terminates employment prior to expiration of stay, the foreign national is not entitled to transportation costs.

22 PERM Labor Certification Compliance Program Electronic Review Management (PERM) First step for certain foreign nationals in obtaining an employment-based immigrant visa ( green card ). Recruitment Process steps must be completed at least 30 days before filing but no more than 180 days. All recruitment efforts and the results of those efforts must be recorded by the employer.

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24 PERM or Department of Labor (DOL) Audits PERM applications may be audited by the DOL s Employment and Training Administration (ETA). The ETA may issue random audits or an audit may be triggered by a response or group of responses on the PERM application. The employer will receive a letter if an audit is triggered. Prepare for possible audit Be honest in the application process Keep thorough records and a PERM audit file Compliance File All recruitment efforts and their results must be documented Maintain this information for 5 years from the date of the application filing.

25 Why Hire Foreign Workers? 1. No available U.S. workers 2. International experience 3. Loyalty and strong work ethic 4. High qualifications and training 5. Innovative approaches 6. Diverse workforce 7. Retention of foreign students

26 Role of the Immigration Lawyer Advise to avoid violations and fines Creation of the Public Access File Argue against government allegations Facilitate recruitment requirements Negotiate to reduce fines/reach settlement

27 Comprehensive Immigration Reform and its potential effect on business Mandatory E-Verify Employers will be required to use the E-Verify system over a 5-year phase-in period. Employers with more than 5,000 employees will be phased in within 2 years. Employers with more than 500 employees will be phased in within 3 years. Remaining employers will be phased in within 4 years. Photo Matching Every non-citizen employee will be required to show their biometric work authorization card or biometric green card. The photo on the card must exactly match the photo the employer has on the E-Verify system. For U.S. citizens with passports, the photo on the passport must exactly match the photo in the system. Agreements will be made with State DMVs to create a program where driver license photos can be matched with those in the system. Added Security for Employees Employees will be able to lock their Social Security number in the E-Verify system so that it may not be used by another individual. Employees will be allowed to check their E-Verify history to ensure that their credentials are not being used fraudulently.

28 Comprehensive Immigration Reform for foreign workers H-1B Cap Raise base cap of 65,000 to 110,000 with 25,000 exemption for STEM advanced degree graduates This cap can increase/decrease by up to 10,000 visas based on the High Skilled Jobs Demand Index but the cap can never exceed 180,000 or drop below 110,000 The index will determine the actual amount by which the cap changes from one year to the next, based on changes in the demand for foreign labor and the availability of domestic workers. Wages & Advertising Employers must pay significantly higher wages for H-1B workers Employers must first advertise the jobs to American workers Penalties New penalties and procedures to detect and prevent fraud and abuse of the H-1B and other visa systems by fraudulent employers.

29 Questions & Comments Gus M. Shihab, Esq. The Law Firm of Shihab & Associates 65 East State Street, Suite 1550 Columbus, Ohio (614)