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In a recent article appearing in Corporate Counsel, Littler Shareholder Ian Macdonald observes that ICE is targeting specific industries: those that traditionally hire a large volume of undocumented workers, e.g., agriculture, construction; and others whose employees are privy to sensitive government information. He recommends that employers vulnerable to ICE inspections avoid fines by taking proactive steps such as:

• performing a self-audit;
• streamlining the Form I-9 process;
• implementing a record system allowing quick document production;
• correcting any deficiencies; and
• terminating undocumented workers.

Macdonald also notes that audits are less likely–and, in the event an audit occurs, punishment potentially less harsh–for companies with a record of government cooperation. For example, an employer’s enrollment in and use of the E-Verify program to authenticate individuals’ legal work status may be factored in by immigration enforcement officials during audits.

In the event of an audit, Macdonald recommends swift action using a three-phase approach:

• Phase 1: Review I-9 and payroll records, Social Security “No Match” letters, and cure deficiencies within three days.
• Phase 2: Build a rapport with ICE and cooperate with the agency.
• Phase 3: If a penalty is imposed, have counsel evaluate fines and attempt to negotiate down excessive penalties.

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More often than not, according to the Chronicle’s analysis of received documents, no criminal or civil penalties will follow if an employer’s payroll is purged of undocumented employees. Although audits have become the current administration’s immigration enforcement strategy, and ICE has issued fines for noncompliance, the Chronicle’s report suggests that many of the larger fines resulted from actions taken (or commenced) during the previous administration.

In response to the analysis, Brett Dreyer, the head of ICE’s worksite enforcement unit, stated that ICE tries to identify and focus on employers who are “turning a blind eye” to workers’ legal status (as opposed to those who unintentionally accept fraudulent documents). 

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If an audit reveals that a business employs illegal workers, the employer must fire those employees or face criminal charges. For employers in migrant-driven industries, audits significantly and immediately deplete their workforces, making it difficult to conduct business. For dismissed employees, finding work in local or surrounding areas is difficult because potential employers fear being audited themselves.

Though ICE officials contend the audits’ targets are egregious labor and immigration law violators, some contend that the agency is missing its mark by going after employee-friendly businesses. Others, however, contend that the agency’s efforts are insufficient because employees found to be illegal immigrants are being fired instead of being arrested and deported.

Among other provisions, the law:

• allows police officers to arrest individuals unable to provide documentation demonstrating their legal right to be in the United States;
• allows police officers to charge illegal immigrants with criminal trespassing;
• allows state residents to sue Arizona’s local or state officials or agencies if they “adopt[] or implement[] a policy or practice that limits or restricts the enforcement of federal immigration laws to less than the full extent permitted by federal law.”

The law also contains provisions regarding verification of employment authorization. Since December 31, 2007, Arizona employers have been required to use E-Verify, the federal electronic employment verification system, to authenticate employees’ legal work status. The new law amends existing provisions to require employers to retain employee verification records for either the duration of the employee’s employment or at least three years, whichever is longer.

Additionally, the new law establishes an affirmative defense of “entrapment” for employers charged with knowingly or intentionally employing unauthorized aliens. To successfully assert the defense, employers must prove, by a preponderance of the evidence, that:

• law enforcement officers or their agents, and not the employer, started the idea of knowingly or intentionally hiring an unauthorized alien;
• law enforcement officers or their agents urged and induced the employer to knowingly or intentionally hire an unauthorized alien; and
• the employer was not predisposed to commit the violation before law enforcement officers or their agents urged and induced the employer to commit the violation.

However, an employer will not be deemed “entrapped” if it was predisposed to knowingly or intentionally hire unauthorized aliens and the law enforcement officers or their agents “merely provided the employer with an opportunity to commit the violation.”

An individual with “hiring authority” is defined as having the “direct authority to
make a decision to hire or to recruit or refer for a fee, an individual for employment.” Should a violation occur, the offender could be subject to the following penalties for each unauthorized alien employed:

Criminal Penalties:

• First offense: A fine of $2,500 and/or imprisonment up to one year.
• Second offense: A fine of $5,000 and/or imprisonment up to two years.
• Third offense: A fine of $10,000 and/or imprisonment up to five years.

Civil Penalties:

• First offense: A fine of between $1,000-$5,000 (currently $250-$1,000).
• Second offense: A fine of between $5,000-$10,000 (currently $2,000-$5,000).
• Third offense: A fine of between $10,000-$20,000 (currently $3,000-$10,000).

The bill has been referred to the House Judiciary Committee.