Just When You Thought It Was Safe…etc

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Just When You Thought It Was Safe…etc.

Eliot Norman

Worksite Enforcement &Immigration Compliance Team Williams [email protected]


Just When You Thought it Was Safe to Go Back in the Water…

Nationwide Crackdown on Employers:

1000 Subpoenas served on June 15th

The New State E-Verify Rules, including Virginia E-Verify starting in 2013: now 18 States

Social Security “No-Match” Letters starting up again

Office of Special Counsel fining employers for being too careful or abusing the documents:

Our goal: How to avoid paperwork fines and violations

Contractors paying tens of thousands of dollars in penalties in this economy?


3 New Developments Increasing Risks For Employers

ICE is prosecuting solely for paperwork violations even when all workers are legalHuge increase in enforcementThe States have lost patience and are now major players


State Mandatory E-Verify Laws

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“Nuts and Bolts” of Immigration : Reducing Risks

What is at Stake?Why Now? “ICE launches initiative to step-up audits”: 1000 Raids June 15, your business tomorrow. See Handout Alert .

What is the Bottom Line Result that we want?

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PART I: Your Company’s COMPLIANCE RISKS


Who is Enforcing?

ICE (Immigration) for Paperwork Violations on I-9 Forms even if all your workers are legalOffice of Special Counsel for document abuseICE for hiring illegal workers: and criminal prosectionsFederal Government: federal contractors and subcontractors if not using E-VerifyNew Players: States: including N.C. and Virginia in 2012 and 2013. 18 others. SSA and IRS: Mismatch on Soc. Security Numbers


Enforcement Trends

Examples of increased enforcement against employers:What Sectors? construction, food service, manufacturing,

agriculture, infrastructure

ICE issues fines of $15,865,101 just through 4/09 compared to $2 million for all of 2008.Fines for 2010 and 2011 continue on record pace: $30 million in 2010; $40 million in 2011? No unauthorized workers: paperwork violations, still over $1 million in Fines: Abercrombie & FitchOne franchise N.C. Subway store 109 violations, hit with $111,000 in fines, all the workers are legal, paperwork deficient, [reduced to $27,000]


Civil Penalties Against Employers for Immigration Violations: How Do the Penalties Get so Big?

Substantive Violations: Range from $375 to $3200 for First Offense:

Paperwork Violations: Range from $110 to $1100 for each I-9 Form

Substantive fines: assessed per unauthorized employee

Document Abuse: $110-$1100: Danger of Employer over-correcting

National Origin: treating foreign looking applicants differently: $275-$2200.

E-Verify Fines for continuing to employ worker whose paperwork does not match DHS and SSAdministration records: $500 to $1000: $500 for failing to timely notify employee of non-conformance based upon information initially filled in on Section 1 of the I-9:

As Federal Contractors: Penalties include debarment:

Costs of responding to Audit, Administrative Subpoena,

Shows VALUE OF DESK AUDIT OF SAMPLE OF 25 FORMS: determine scopeof problems in advance of government inspections, audits


ICE Fine Enforcement Chart: Knowing Hire of Illegal Workers


Paperwork Violations:

*

*The number of substantive violations divided by the number of employees for whoma Form I-9 should have been prepared to obtain a violation percentage.


It Can’t Happen To MeYes it canHow Investigations Start? Secure Communities and DUI s 400,00 deportations annually Random AuditsIndustry Sectors: who is working most where public can see you? Those I-9 Forms: can come back to bite you


Yes It Can

ICE Investigates whether I-9’s were completed properly and assesses fines for:

“Unauthorized Workers” (hiring or continuing to employ)Paperwork violations:

“Technical” violations“Substantive” violations

Office of Special Counsel investigates whenIt gets complaint that you are too restrictive in hiring, being too

careful to avoid ICE problems

Get Hit both ways


So Where are you Vulnerable?

Sloppy I-9 Records = problems: Loss of Affirmative “Good Faith”Defenses; loss of control. Unprepared for E-Verify.

Sloppy Procedures, job applications and questions you ask.

Sooner you get the I-9s right the better, with E-Verify coming into play

And 18 States and OSC jumping into the Act, more on the way

National Mandatory E-Verify legislation pending in Congress

Next problem: dealing effectively with E-Verify and setting up internal controls to avoid government fines and federal contract problemscreated by you or your subcontractors

And Just this April, SSA HAS RESUMED MISMATCH LETTERS affecting millions of workers and their employers


PART II: “Best Practices” and “Safe Harbors”


So What Have We Been Doing For Clients as we Deal with the Enhanced

Enforcement and Prosecutions ?Meeting with clients: looking at records, “an audit a day keeps the government away”Affects clients, large and small How do your I-9 records look? Do your own Report Card. Sample 25? Get a Score.

New I-9 Form, Electronic I-9 Forms, Voluntary and Mandatory E-Verify Rolling Out? Self-Audit before…


Part II: It All Starts with that I-9 Form and List of Acceptable Documents

See Your Handout Please


NEW I-9 FORM Became Effective April 3, 2009

Section 1: Employee fills in but Employer Pays Fine if its not Correct or Complete: Data Used For E-Verify

Translator/Preparer Certificate

Section 2: HR: Fills in Info From Originals of List AOR List B and C Documents.

Answers also used for E-Verify

HR Certification: “UNDER PENALTY OF PERJURY”

Section 3: HR Re-VerifiesWork Authorization, again under “penalty of perjury”

LIABILITY RISKSFOR YOUR COMPANY


Summary: I-9 is one of those Ultimate Government Forms

Should be Simple 1 Page Form But

has 3 Sections with 3 different person completing it.

one of whom know the least and can cause the most trouble.

Even your team comes from different, unconnected groups: Recruitment, HR, Payroll,

Instructions don’t help much

M274 Handbook: improved but still like reading the phone book

No Wonder Score Cards = D+ at best


Those Famous Lists A, B, C,

All starts with the documentsBeen Around since President Reagan’s “Riverboat Gamble” in 1986Still can’t get it straight—or can we?


Our ProblemI-9 employee:New CFO: can’tfind his Soc. Sec. Card. U.S. citizen.


I-94 Expiration Date:July 15, 2010

I-797 Approval Notice forH-1B

I-94





“VALID FOR WORK ONLY WITH DHS AUTHORIZATION”

UNEXPIRED DRIVER’S LICENSE


The “Nuts and Bolts” in Properly Completing the New I-9 Form

Now that we have gone over “Acceptable Documents” lets review the Form ItselfIt has not changed substantively in any big wayThe emphasis has changed: get Section 1 “Done Right” and you stay out of trouble in Section 2Section 3: be careful, watch restrictions on its use.Trend: Moving to electronic I-9s and E-Verify which relies on Section 1 Data


Focus of New I-9: Section 1


Impact of New I-9 on Completing Section 1

New list A tells you: burden on employer to make sure employee gets it right and complete

Substantive violations: Corporation pays the fines

SS # optional but won’t work when move to E-Verify

You will rely on the data for E-Verify

You will rely on its accuracy to complete Section 2


Section 2: Avoiding Compliance Risks Decentralized Intake Procedures?


Impact of New I-9 on Completing Section 2

All Important Section 2 Only person who sees the Documents can fill in Section 2

Timing: 3 business Day Rule

All Important Certification of Date of Hire

Complete Section 2 from the Originals and Copy what you saw:

Compare status checked in Section 1 with Documents handed you for Section 2

Get a “Head Start” on 3 day Rule


OSC Forbidden Questions

Section 2 is where problems ariseOK: “Are you authorized to work for any U.S. employer?”OK:”Will you now or in the future require sponsorship for a visa?”Can’t ask: two forms of ID; specify what they show you; ask for more than you need; ask how they came citizen or green card holder; require proof of U.S. citizenship.


Section 3: What is it?


Impact of New I-9in Completing Section 3

Can’t use Section 3 if Employee filled in the old I-9 Form that expired April 3, 2009: Do a new I-9. Be careful with ReceiptsDon’t over re-verify

Suppose Documents expire after employee is hired: No need to Re-VerifyGreen Cards: Never Re-VerifyDistinguish Green Cards from the I-551 Stamp in the Passport


Best Practices: I-9 Regulations encourage Electronic I-9s

Examples: how does it work? (in-house and off the shelf) Pick the right system to match regulatory requirementsCopy the supporting documents for the I-9 Other Pointers on Maintenance of Files, Retention, Updates

3 yr 1 yr rule: at least an Excel SpreadSheetSecurity of Files, don’t mix em with personnel filesTickler system on re-verifications (Section 3)

Train the Trainers, Sample Audits and Scorecards, (where we most often help our clients)Practical benefits to ICE of training program: Wal-Mart example. Our role as Auditor. Another Safe Harbor and negotiating tool.


OK, WHERE ARE WE ?

We have figured out how to avoid Office of Special Counsel Prosecutions We have got good I-9 Systems in PlaceCompetitive Advantages for your company: ROI Next steps?


Part III: Moving from I-9s to E-Verify Not a SUBSTITUTE for I-9: Additional Layer of Protection: Prosecutorial Use Immunity:

Smithfield N.C. Case:

. SAFE HARBOR: Participation in E-Verify does not provide automatic or “blanket”protection from worksite enforcement. However, an employer “who verifies work authorization under E-Verify is presumed to have not knowingly hired an unauthorized alien.”


How E-Verify Works?

How E-Verify Works? web-based verification through USCIS of employment authorization and identityTakes info from Section 1 of the I-9Takes info from Section 2 of the I-9Photo Screen Tools: how do they work?

96% of the time: instant Verification: A-OK. Compares data against 455 million SSA records and 80 Million DHS immigration records. Employer: records E-Verification number on screen or paper copyof your I-9


What if the Employee Gets TNC?If you set it up right, this happens at application process after you make the offer, sit down at the computer screen, you never see him againThe 8 Government Working Days Rule for TNCsIf you I-9 and E-Verify after first day of paid work, he can keep working while getting matter resolved.

Can’t terminate until receive Final Non-confirmation. Can’t work him past FNC: Can be fined

$550-$1100 if you do. a quandary for someone you know is authorized


Lots of Helpful Information on USCIS Website

Webinar available to introduce itEmployee self-check in 21 statesSign goes up on premises Tide has shifted in favor of its usesee www.uscis.gov and then click on E-Verify


E-Verify Results as of September 2011 Voluntary and mandatory: 238,000 employers have signed up out of 7 million employers. only 3% of all employers. However,

16 million queries, maybe 15% of all new hires in 2010 (60 million) . This compares with 8.7 million queries in 2009 and 3.27 million in 2007.

98% accuracy? Nationally, about 98% accurate enough to provide instant verification of identity and work authorization.

Cannot prevent identity theft or eliminate I-9 process, despite photo screen.

Expansion to Federal Government and Federal Contracts September 2009

Meanwhile 18 States now have E-Verify Statutes or Executive Orders mandating its use: vary widely.

I-9s: still there whether you do E-Verify or Not

What’s an employer to do?


Only Drawback: Three Types of E-Verify

Voluntary: new hires only.!! Federal Contract Mandated: new hires plus workers assigned to the federal contract.

option: can sign up to E-Verify everyone. State Law Mandates: they vary, be careful. Fourth? (nationally mandated?)


Federal Contractor E-Verify

FAR E-Verify Clause in your contractIf subcontractor, value of at least $3,000 If contractor: value of at least $120,000, duration of at least 120 days.


Which Federal Contracts?

Practical solutions: Talk to the Contracting Officer FirstSome of the technical rules


Which Federal Contracts

All prime contracts except those valued less than $100,000work performed outside the U.S.performance less than 120 daysthat are only for commercially off the shelf COTS items or whichwould be COTS except for minor modificationsNote: applies only to entity signing the contract, not necessarily parent or subsidiary not performing direct services under the contractContracting Officer (CO) responsible for inserting E-Verify FAR clause. http://tinyurl.com/FAREVERIFY (FAR Regulations)

Your prime contractor must insert the E-Verify FAR if the covered subcontract is one for services or construction with value of more than $3,000


Timing to Sign up for Federal Contractor E-Verify


FAR E-Verify: Federal Contracts/Subcontracts


Moving from Voluntary E-Verify to Mandatory FAR E-Verify for Federal

Contractors and Subcontractors


State E-Verify Laws Virginia: 2013. How it Works. 50 employees or more. Applies only to State Contractors. Subcontractors exempt. N.C: 2012: How it Works. All Employers must register for E-Verify between October 1 2012 and July 1, 2013. Penalties: $1000 to $10,000; $2000 per employee. Getting Serious. S.C.: E-Verify will be mandatory for all employers January 1, 2012. Ga. E-Verify Mandatory for State Contractors and Subcontractors effective Jan. 1, 2010. Examples of Other states and the penalties Your competitive advantages in getting ready for the new State Law Mandates


State Mandatory E-Verify Laws

Solid Block of States in the South


Part IV: So are we out of the woods?

Answer: Not quite yet . Social Security “No-Match”EEVS? (Electronic Employment Verification Systems)

http://www.ssa/gov/employer/ssnv.htmlbut can’t rely on it as authorization to work.don’t use it for I-9 or E-Verify purposesSame with E-Verify Self-Check

Soc Sec “ No Match” Letters: revived after litigation in 2009 that killed their usemaybe 2 million will go out in 2011-2012Safe Harbor Rules:


Two Step process with SS “No Match”#1: check your records, is it your error, if so, notify SSA#2: not your error, notify employee,

opposite of “Don’t ask, don’t tell”terminate if he admits: not my number

#3: tell him, if he still says, “its mine” then give him reasonable time to get problem resolved. at least 30 days. ICE says: you have “constructive notice” he is unauthorized if he can’t resolve it. However, employee can come back and present new documents for I-9 purposes that don’t use SS #. If so, legal to keep working.

this is where you should consult legal counsel before proceeding to either terminate or keep the employee working. Sorry, whole area is a landmine.

IFCO pallet case. IRS civil audit Risks.


Final Thoughts What we have accomplished: Safe Harbors for dealing with:

ICEOffice of Special CounselFederal Contracting OfficersState EnforcersSSA and IRS

How we help: Train the Trainers; Do the Report Card and Set up the Systems that Give you Good Faith Immunity from Fines and Penalties So What are your Best Practices?


I-9 and E-Verify: “Best Practices”

1. Sooner shift to E-Verify the better. May have to anyways.

2. Give responsibility equal to a Chief Compliance Officer to the Responsible I-/E-Verify Manager.

3. At a minimum, develop in-house Software that integrates the I-9 Data into the E-Verify Data. Makes no sense to fill in the I-9 By Hand; and then retype data from one form (I-9) to the other (E-Verify). Cost/Benefit analysis on how to roll-out E-Verify is critical.

4. Remember, under the proposed Federal Contractor rules, E-Verify applies to all new hires (whether assigned to the federalcontracts or not) and to all employees assigned to the contracts. And you have the option of applying E-Verify to all existing employees. State laws apply (so far) only to new hires.


“Best Practices”

5. Ultimately, given crazy patchwork quilt of state law and federalcontractor mandates, once you are in E-Verify, you might as well apply it as broadly as possible. Caveat: there is only a 180-210 day window to roll it out .

6. Your HR Team needs 24/7 web-based access to I-9 and E-Verify processes to review real-time reports, monitor, train, and ensure compliance. You may not want to do it with the I-9 paper records and the government’s E-Verify software, which don’t link up and don’t issue alerts when work permits expire.

7. Cost/Benefit analysis. Compute the woman-hours needed to keep up with disconnected old-fashioned records. Avoid Risks of errors, misuse and theft of social security numbers, resulting in “routine use of civil fines” and lawsuits. Discard your old files when allowed. lock em up. better yet: computerize and encrypt them.


“Best Practices”8. False TNC (non-confirmation notices.) Escalate for review by well-

trained E-Verify team. There are technical exceptions and E-Verify is now adapting software to be more flexible. Ultimately, counsel has to weigh whether to continue employing worker while waiting for resolution vs. risks of civil fine for continuing to employ despite Government saying: “this person is not a match.”.

Use of E-Verify should eliminate risks of ICE audits and create “Safe Harbor” from liability for substantive violations on I-9 Forms. Government resources are focused elsewhere. Government should go after the “Don’t Ask, Don’t Tell Employers”, not those wired into the SSA and DHS databases.


PART V. Final Final thoughts: I am Ok; You are OK

BUT is your subcontractor OK? Big area of vulnerability and liability.


Reducing Liability Risks from Subcontractors’ Immigration Violations: E-

Verify Impact?

What are the Issues?Wal-Mart IWal-Mart II “Constructive Knowledge”: How defined?How does this whole area overlap with E-Verify?Special Problem: state law complianceIndemnification and certification to receive payment clauses in your subcontracts.


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Eliot Norman, Worksite Enforcement and Immigration Compliance Team804-420-6482 [email protected] updates: http://tinyurl.com/immupdateswww.williamsmullen.com/immigration


APPENDIX

Immigration Documents

60


I-9 Headache For Foreign Employees on Visas

Another Headache for HRH-1B employee comes in, gives you kitchen sink in documents

Lets you Sort it outDon’t go the easy way: Take the Driver’s License and Social Security Card? Why?

Section 1: he tells you he is authorized only to work for temporary period of timeCan require him to give you proof of thatUse List A


Foreign Passport: India

With Valid Photo ID


I-94 Expiration Date:July 15, 2010

I-797 Approval Notice forH-1B

I-94


Section 1: Not Completebut employee is saying:I only have temporary workpermit by checking boxX=“An alien authorized towork until”

Section 2HR Uses Drivers Lic & SS Card

I-9 “Done Wrong”

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxx

xxxxxxxxx


xxxxxxxxxxxxxxxxxxxxxxxxx

Section 2: HR recognizestemporarily employed; Fills In List A with double combination of ForeignPassport and I-94 Card

Section1: Employee completes data with # and Date. Determines how Section 2to be completed by HR.

I-9 Done “Right”

TO DO: COME UP WITH SPREADSHEET REMINDERTO RE-VERIFY Section 3July 15, 2010