I-9 COMPLIANCE: Be Ready for New Enforcement Tactics

Transcription

1 I-9 COMPLIANCE: Be Ready for New Enforcement Tactics Michael E. Stroster Presented to the Michigan Chamber of Commerce October 4, The materials and information have been prepared for informational purposes only. This is not legal advice, nor intended to create or constitute a lawyer-client relationship. Before acting on the basis of any information or material, readers who have specific questions or problems should consult their lawyer. 2 What Are We Going To Cover? 3 DHS Enforcement Focus Worksite Issues Fines and Other Sanctions Form I-9 Completing and Retaining It Properly How to Correct Mistakes E-Verify Should You Enroll? Are You Required to Enroll? IMAGE Social Security No-Match How to Properly Respond DHS Audit or Site Visit Who are they Targeting? How Do You Respond? 1

2 Poll Question Are you responsible for completing and maintaining your organization s I-9 forms? Yes No 4 U.S. Immigration and Customs Enforcement s (ICE) Focus Recently, Secretary Napolitano outlined where ICE will focus its resources in order to target the root cause of illegal immigration: employers who knowingly hire illegal / undocumented workers or fail to undertake appropriate I-9 compliance steps. 5 ICE Focus Employers are identified through tips from the public, reports from an employer s current or former employees, even referrals from other law enforcement agencies. Once a lead is received, ICE will use undercover agents, confidential informants, cooperating defendants, and surveillance. 6 2

3 Workforce Enforcement Strategy ICE is committed to the aggressive investigation and criminal prosecution of employers who knowingly hire unauthorized aliens. 7 Workforce Enforcement Strategy ICE believes that criminal prosecution, seizure of assets, and imposition of meaningful civil penalties against violators are the most effective means of combating the unlawful employment of aliens. 8 Criminal Investigations ICE investigates employers who: Commit criminal violations, Are willfully blind to the presence of unauthorized aliens in their workforce, or Engage in worker exploitation. 9 3

4 Compliance Inspections ICE is charged with regulatory enforcement of the Form I-9 employment eligibility verification process. ICE has reinvigorated its compliance efforts by increasing Form I-9 inspections and revamping the administrative fine process. 10 Critical Infrastructure Protection ICE prioritizes worksites, such as nuclear facilities, airports, and chemical plants that are critical to our nation s infrastructure. The presence of unauthorized aliens at these sites is a significant threat to national security. 11 Next Target Industries Agriculture Manufacturing Construction Service 12 4

5 New I-9 Form? Revised date of 08/07/09 Revised form narrows the list of acceptable identity documents The form is available on-line at uscis.gov/i-9 13 New I-9 Form? Revisions to the form include removal of the following documents: Certificate of U.S. Citizenship (Form N-560 or N-561) Certificate of Naturalization (Form N-550 or N-570) Alien Registration Receipt Card (I-151) Unexpired Reentry Permit (Form I-327) Unexpired Refugee Travel Document (Form I-571) 14 New I-9 Form? One document was added to the list of Acceptable Documents: Unexpired Employment Authorization Document (I-766) Spanish version of I-9 May only be used as a translation guide - Except in Puerto Rico 15 5

6 New I-9 Form? The rule also adds to List A foreign passports which contain specially-marked machine-readable visas and documentation for certain citizens of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI) Updated Handbook for Employers, M I-9 Compliance ALL employees hired after November 6, 1986, are required to have an Employment Eligibility Verification Form (Form I-9) on file with the employer Includes U.S. citizens 17 Section One Employee must fill out Section One Name (maiden name) Address Date of Birth Social Security Number - voluntary Check status in United States Work authorization must include expiration date Signature and date (required even if prepared by translator) Preparer or translator certification 18 6

7 Section One Section Two Employer must complete within 3 business days of the date employment begins Employer must review the original documents and complete Section Two Document title Issuing authority Document number Expiration date (if any) Date employment begins (often missed) 20 Section 2 7

8 Section Two Employees must provide documents within 3 business days of the date employment begins If not in possession of documents, must provide a Receipt Notice or I-94 Card within 3 business days and the actual documents within 90 days Employees are not required to show a Social Security number for I-9 purposes unless the employer participates in E-Verify 22 Section Two Examine one document from List A or one document from List B and one from List C Employer cannot specify which documents they will accept from an employee 23 Lists of Acceptable Documents 8

9 Poll Question Do you take copies of the employees documents? Yes No 25 Section Two What are you certifying? On its face, the document reasonably appears: 1) To be genuine 2) To relate to the employee You are not attesting to the person s status or identity 26 Section Three Updating and Reverification THIS IS CRITICAL! Employee name changes Employee leaves and is rehired Work authorization expired 27 9

10 Section Three Retaining Forms Completed I-9s must be retained for: 3 years after the date of hire; or 1 year after employment ends, whichever is later For example, if an employee retires from your company after 15 years, you will need to store his/her I-9 for a total of 16 years Must remain easily accessible If the USCIS requests to see I-9s, they must ALL be available in 3 days 29 Retaining Forms 30 Electronic Storage Fillable printable Form I-9 on Electronic storage system must include: Security and reliability Read-only format to prevent editing to completed Form I-9 Inspection and quality assurance program with regular evaluations Retrieval system with indexing system and search capability Ability to reproduce legible and readable hard copies 10

11 Retaining Forms Electronic Signature: System to capture electronic signatures Ability to affix the electronic signature at the time of transaction Create and preserve a record verifying the identity of the person Provide a printed confirmation of the transaction, at the time of the transaction, to the person providing the signature 31 What to do about your mistakes Your organization has mistakes on its I-9s. You need to: Find them. Audit at least a portion of your current I-9s. Fix them. Correct any mistakes you find on the form. Record them. Document your compliance efforts. Prevent them in the future. Implement a policy and train those who work with I-9s. 32 Poll Question Do you participate in E-Verify? Yes No 33 11

12 E-Verify What is it? E-Verify is an Internet-based system that compares information from an employee's I-9 to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. It is a voluntary system. For now. 34 E-Verify Legislation Federal level Effective 2009, it became mandatory for most Federal contractors and sub-contractors to use E-Verify. SAVE Act reintroduced to Congress which would require all employers to use E-Verify. 17 States Require E-Verify in some form. 35 E-Verify Legislation 36 State and county level Proposed Michigan legislation would require employers who contract with State agencies to enroll in E-Verify. Macomb County requires businesses doing more than $20,000 in business with the county to enroll in E-Verify. Oakland County requires parties to service contracts with the county to enroll in E-Verify or other DHS employment eligibility systems. 12

13 E-Verify Is It Right For Your Business? The system is expected to annually label approximately 38,000 legal workers as illegal due to errors in the system. System contains errors which result in final nonconfirmations even though employee is authorized to work in the U.S. E-Verify does not detect illegal aliens who present false identity documents of a citizen to his / her employer 37 E-Verify Is It Right For Your Business? Added cost of training, start-up, and maintenance. MOU includes additional restrictions regarding acceptable documents for I-9 purposes. MOU grants DHS or SSA unrestricted access to I-9 forms and other employment records, and allows employee interviews. 38 Outreach and Education The ICE Mutual Agreement between Government and Employers (IMAGE) program provides employers with solutions to hiring process challenges through outreach and education with the goal of fostering workforce integrity and compliance with the law

14 IMAGE Employers seeking to participate in IMAGE must agree to: Complete a self-assessment questionnaire; Enroll in E-Verify; Enroll in the Social Security Number Verification Service; Adhere to IMAGE Best Employment Practices; Undergo an I-9 audit conducted by ICE; and Review and sign an official IMAGE partnership agreement with ICE. 40 Social Security Mismatch 41 What is it? Employers throughout the nation have been receiving letters from the Social Security Administration informing them that they have been reporting inaccurate Social Security numbers or inaccurate employee names. This is an I-9 and tax issue. Involves the DOL, ICE, IRS, and SSA Social Security Mismatch If an employer accepts a Social Security number for I-9 purposes and later receives a mismatch letter, IRCA requires the employer to investigate the employee s work status before making any employment decisions

15 Social Security Mismatch IRCA forbids employers from knowingly hiring or continuing to employ aliens who are not authorized to work in the United States 43 Social Security No-Match Regulation Proposed Rule: Employers are responsible for resolving discrepancies between employee records and SSA or DHS After notice is received, the employer has 90 days to resolve If discrepancy is not corrected, the employer has two choices: (1) discharge and risk lawsuit; or (2) continue employment and risk civil and criminal sanctions from DHS 44 Employer Risks - No-Match Regulation Change in definition knowledge presumed if employer fails to act Employer must take reasonable steps after receipt of no-match letter Reasonable steps include: Review of records, W-2 payroll, I-9, etc. 90-day limit to resolve discrepancies or discharge employee, or risk finding of constructive knowledge of unauthorized worker 45 15

16 Social Security Mismatch An employer can avoid IRS penalties by developing a paper trail showing it took reasonable care in resolving the problem and in reporting SSNs and employee names it believed were valid 46 STEP #1 Social Security Mismatch Verify Records: Compare the employee s SSN with your records. Correct any information found to have been inaccurately entered in your records. If you don t have a photocopy of an employee s SSN, make a copy now and attach it to the employee s IRS Form W Social Security Mismatch Place the names of persons with problem SSNs who are no longer employed by your company on a list. If the person returns to work, check your records against the information on the employee s SSN

17 STEP #2 Social Security Mismatch Notify Employee of Discrepancy: If a check of the employee s SS card shows you have been reporting the account number as shown on the card, inform the employee that the SSA has notified you of the problem and that he must resolve it with the SSA. Tell the employee to report to you his new account number once it has been issued to him. 49 Social Security Mismatch STEP #2 (cont.) Unless you want to discharge employees who fail to resolve problems with their SSA accounts, do not give the employee a deadline to report back to you with the corrected information. Confirm your instructions to the employee in writing and keep a copy of them in case you are audited. 50 Social Security Mismatch STEP #2 (cont.) An employer need not fire an employee whose SSN is found to be invalid. The employer must nonetheless pay employment taxes for the employee, noting "Unknown" in the return s account number column and the employee s address beneath the employee s name

18 STEP #2 (cont.) If the employee insists his account number and name are accurate, ask the employee to complete IRS Form W-9, Request for Taxpayer Identification Number and Certification. Social Security Mismatch 52 Social Security Mismatch 53 STEP #3 Report SSN as "Unknown": When reporting future SS contributions, report to the SSA as "unknown" the SSN of an employee who has no SSN or whose SSN the SSA has notified you is faulty and who has not yet fixed the problem. In doing this, the employee's address must also be reported. IRS Reg (b)- 2(c)(4) authorizes this action. Social Security Mismatch STEP #4 Letter to SSA: Report to the SSA in writing the steps you took to resolve the SSN conflict for each affected employee, including those you no longer employ

19 Social Security Mismatch STEP #5 Establish Company Policy: Most likely, the SSA and IRS are not going to relax their effort to force employers to fix the problem of nonmatching SSNs and names. Employers with year-round employment or near year-round employment especially suffer administrative headaches from facing incessant SSA pleas to correct employee records Consequences of Hiring Unauthorized Aliens Penalties Criminal Prosecution Administrative Sanction Debarment Felony and Misdemeanor Hiring Violations $375 - $16,000 Prohibits Federal Contracts 1-3 years Imprisonment, Fines & Forfeitures Paperwork Violations $110 - $1,100 Enacted by Executive Order on 2/13/

20 Worksite Enforcement Arrests Criminal Arrests Administrative Arrests FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 Notice of Inspection (NOI) Form I-9 Inspection Process Inspect Forms I-9 Violations Notice of Suspect Documents Notice of Discrepancies Yes No Compliance Substantive Violations Technical Violations Warning Notice Notice of Intent to Fine (NIF) Settlement OCAHO Hearing Work Site Enforcement on the Rise In the administrative setting, the playing rules tend to favor the government. Investigating ICE agents issue their own subpoenas for employers' records. Administrative judges determine the facts and the defendant's liability; juries are not an option

21 Penalties for Knowing Hire / Continuing to Employ Schedule (for violations occurring between 9/29/99 and 3/27/08) Standard Fine Amount Knowing Hire and Continuing to Employ Violations First Tier $275 - $2,200 Second Tier $2,200 - $5,500 Third Tier $3,300 - $11,000 0% - 9% $275 $2,200 $3,300 10% - 19% $600 $2,750 $4,600 20% - 29% $925 $3,300 $5,900 30% - 39% $1,250 $3,850 $7,200 40% - 49% $1,575 $4,400 $8,500 50% or more $1,900 $4,950 $9, Penalties for Substantive and Uncorrected Technical Violations Standard Fine Amount Substantive Verification Violations 1 st Offense $110 - $ nd Offense $110 - $ rd Offense + $110 - $1100 0% - 9% $110 $550 $1,100 10% - 19% $275 $650 $1,100 20% - 29% $440 $750 $1,100 30% - 39% $605 $850 $1,100 40% - 49% $770 $950 $1, % or more $935 $1,100 $1,100 Enhancement Matrix The following matrix will be used to enhance or mitigate the recommended fine contained on the Notice of Intent to Fine. Factor Aggravating Mitigating Neutral Business size +5% -5% +/-0% Good Faith +5% -5% +/-0% Seriousness +5% -5% +/-0% Unauthorized Aliens +5% -5% +/-0% History +5% -5% +/-0% Cumulative Adjustment +25% -25% +/-0% 63 21

22 Michael Stroster Phone: Calder Plaza Building 250 Monroe Ave. NW, Suite 800 Grand Rapids, MI Rose Street Market Building 303 North Rose Street, Suite 600 Kalamazoo, MI