The U.S. Immigration and Customs Enforcement (ICE) last week announced a $1,047,110 fine settlement agreement with well-known retailer for “technology-related deficiencies” in the company’s electronic I-9 system. The settlement is the result of a November 2008 Form I-9 inspection of the company’s retail stores in Michigan. The audit uncovered numerous technology-related deficiencies in the retailer’s electronic I-9 verification system. The company was fully cooperative during the investigation, and no instances of knowingly hiring unauthorized aliens were discovered. This is the highest reported fine in U.S. history based solely on I-9 software. ICE recognizes that there was no evidence of any unauthorized workers at the retailer, and it had I-9 forms for workers. The issue was the technology used by the retailer for its electronic I-9 form processs. The ICE Special Agent in charge noted:

Employers are responsible not only for the people they hire but also for the internal systems they choose to utilize to manage their employment process . . . . We are pleased to see [the retailer] working diligently to complete the implementation of an effective compliance system. This settlement should serve as a warning to other companies that may not yet take the employment verification process seriously or provide it the attention it warrants.

In addition, this week Department of Homeland Security (DHS) Secretary Janet Napolitano announced record-breaking immigration enforcement efforts, including the auditing and fining of employers. Since January 2009, ICE has audited more than 3,200 employers. ICE claims that all these audits are targeted at employers “suspected of hiring illegal labor.” According to the agency, “ICE is focusing its resources on the auditing and investigation of employers suspected of cultivating illegal workplaces by knowingly employing illegal workers.” We have seen, though, that this net is quite wide. Employers with vibrant I-9 compliance programs have been targeted. By its own admission, the retailer was not an employer cultivating illegal workers. Also, ICE is actively searching for any paperwork or electronic system error (i.e., not a proper audit trail) in order to fine employers. All employers are potential targets, and if audited, are likely to be fined.

As a result of these most recent audits, DHS has so far debarred 225 companies and individuals. In addition DHS, through ICE, has imposed approximately $50 million in financial sanctions against employers. According to DHS, this figure is more than the total amount of audits and debarments during the entire previous administration.