Federal law requires employers to verify the identity and work authorization of every new hire through the use of the Form I-9. Though the Form is only one page long, there are many legal complexities in completing it that may result in hefty penalties for mistakes made by the unwary employer. This article will describe the agency charged with enforcing U.S. immigration laws against employers, highlight enforcement trends as they pertain to the restaurant industry, and discuss ways restaurant owners can protect themselves against government penalties for Form I-9 violations.
Immigration and Customs Enforcement (ICE), the enforcement arm of the Department of Homeland Security (DHS), is charged with conducting Form I-9 inspections and other worksite enforcements (commonly known as “worksite audits”). These involve physical inspections of an employer’s work location and an examination of records. Fines for errors committed during the I-9 verification process range from $110-$1,100 per I-9 form. Criminal prosecutions can occur if facts support such actions.
Statistics spanning the last three years reveal that the Obama Administration has taken a much tougher stance on employers who hire illegal immigrants than any administration in decades. Enforcement agents have subjected businesses across the country to much greater scrutiny, using tactics that were almost unheard of four years ago. Federal officials continue to announce record numbers of investigations and fines. As of September 17, 2011, ICE instituted 3,015 administrative/criminal investigations—a 54% increase over FY2008. In FY2010, ICE arrested and criminally prosecuted 196 owners, HR managers, and executives—a 45% increase over FY2008. ICE refused to release statistics on those employers subject to potential criminal prosecution who negotiated with ICE or U.S. Attorneys to enter into deferred prosecution agreements. A careful look at the DHS’s Budget Proposal for FY2013 reveals that enforcement of U.S. immigration laws is one of the Agency’s top priorities. Form I-9 worksite audits, as numerous as they have become, remain especially attractive for the Agency from an economics perspective. DHS pulled in over $10 million in fines alone for FY2011 and visited more than 2,500 worksites as part of their enforcement efforts. Yet, many employers continue to operate on the mistaken assumption that I-9 audits conducted by ICE happen to others, and not them. Not so.
The restaurant industry employs among the largest number of immigrants. Out of about 12.7 million workers in the restaurant industry, an estimated 1.4 million — both legal and illegal immigrants — are foreign-born, according to the Bureau of Labor Statistics. The Pew Hispanic Center estimates that about 20 percent of the nearly 2.6 million chefs, head cooks and cooks are illegal immigrants. Among the industry’s 360,000 dishwashers, 28 percent are undocumented, according to the estimates. These statistics, coupled with the attractiveness of targeting a $550-billion-plus labor-intensive industry, make the restaurant industry highly susceptible to immigration enforcement. While restaurants are not the only businesses to feel the glare of the government’s searchlight, they appear to be among the most targeted industries. Although immigration enforcement early in the last decade was lax, seemingly winking at kitchens employing undocumented employees, the mounting number of investigations and penalties being sought against restaurateurs show that this tide has turned.
In June 2011, the owner of two Maryland restaurants who pled guilty to hiring and harboring illegal immigrants was ordered to forfeit to the government more than $700,000 in assets — in addition to his motorcycle — and up to 10 years in prison. In November 2011, a restaurateur in Mississippi who pled guilty to hiring illegal immigrants was sentenced to a year in prison and a year of supervised release. Combined fines in the case, shared among several defendants, amount to $600,000.
While many restaurants comply with the law, government officials claim labor economists say immigrants are highly appealing hires because they tend to be especially loyal, stable, and dependable. They also are more likely than United States citizens to work for lower wages, and without health insurance, sick days, paid vacations or paid breaks.
Faced with complex immigration law, targeting by ICE, and the bankrupting potential of fines for immigration violations, employers in the restaurant industry should consider the following steps to reduce their compliance risks:
- Hire competent compliance counsel to conduct an internal I-9 audit. Although it is tempting to conduct an I-9 audit without legal assistance, the law often is misunderstood by HR personnel. Attempting to remediate incorrect I-9’s without training could result in ICE suspecting document tampering, or claiming that the I-9 should be disregarded altogether because there is no adequate forensics trail for the remediation. Legal counsel can show how to make the corrections in a way that is legally sound.
- Train, train, train. Government agencies recommend that employers hire an auditing law firm to train personnel to fill out I-9 forms properly. In addition to completing I-9’s, HR can be trained to detect fraudulent documents, how to purge I-9s that are no longer necessary (thereby reducing liability), and what to do when the government comes knocking.
- Implement policies and procedures that explain and foster I-9 compliance. The government often requests to see employer policies and procedures in an I-9 audit. If you have none, this could signal a lackadaisical attitude toward this responsibility and raise the specter of widespread problems.
- Consider E-Verify. A growing number of states now require employers to use E-Verify, a government-run online system that instantly determines the eligibility of job applicants to work in the United States. Even in states where the system is not required, more restaurants are choosing E-Verify. Government officials also recommend consulting legal counsel to assist in navigating the E-Verify process.
The National Restaurant Association is lobbying Congress for changes in immigration laws, including policies that would make it easier for undocumented workers to gain legal status. Jackson Lewis will continue to follow these developments. We are available to assist employers with immigration enforcement issues and other workplace requirements.