I recently attended the Federal Bar Association Chicago Chapter’s conference on Workplace Enforcement and Immigration where I was both a speaker and member of the audience. Dan Siciliano at Stanford Law School gave a great presentation on the importance of the Sarbanes Oxley, Dodd Frank Act and Securities and Exchange Commission (SEC) with respect to publicly traded companies and their compliance with the immigration laws. These seem like very odd words lumped together, but here’s why they are important.
If you are a publically traded company, Section 404 of the The Sarbanes Oxley Act applies to you. The Sarbanes-Oxley Act (SOX) came into force in July 2002 and introduced major changes to the regulation of corporate governance and financial practice. A goal of SOX is to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws. A summary of Section 404 states:
- Issuers (of financial reports to the SEC) are required to publish information in their annual reports concerning the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess the effectiveness of such internal controls and procedures. The registered accounting firm shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting.
Section 922 of the Dodd Frank Wall Street Reform and Consumer Protection Act has a whistle-blower provision which is relevant to corporate immigration compliance because it allows a whistle-blower to obtain an “award” (aka bounty) where they voluntarily provide the SEC with original information that leads to a successful enforcement action where the SEC obtains sanctions exceeding one million dollars. The “award” ranges from 10 – 30 percent of the recovery. Potential whistle-blowers can spill the beans about a company’s lack of, or poor, immigration compliance controls and procedures surrounding the Form I-9.
Tip of the Day — if you are a publicly traded company (and even if you aren’t) treat your company’s handling of the Form I-9 and related immigration compliance matters as a top priority. Work with immigration counsel to establish protocols, processes and procedures regarding the proper completion, storage and retention of your Forms I-9. Conduct a self-audit of your Forms I-9, again with immigration counsel. Involve leadership in this process, including General Counsel and audit chairs. An example of an SEC investigation in this area is Chipotle Mexican Grill, in which an Immigration and Customs Enforcement (ICE) investigation led to an SEC investigation regarding the work authorization of Chipotle’s employees.