I-9 audits reap millions for DHS

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Guest editorial by Alan Gordon

Most Americans agree that our current immigration system is broken. In addition to being broken, our US immigration policy does not support either our economic goals or our philosophical ideals. Congress has avoided immigration reform to date. In the meantime, employers find themselves in the crosshairs of the Department of Homeland Security’s (DHS) target to increase enforcement and increase revenues. Companies large and small, in the Carolinas and elsewhere, are being investigated and assessed fines in the amount of thousands and often tens of thousands of dollars.

The Obama administration has stepped up I-9 enforcement to a level that has never been seen before. The fines for failing to properly complete and maintain I-9 forms for employees range from $110.00 to $1,100.00 per paperwork violation. Immigration and Customs Enforcement (ICE) is seeking fines at the higher end of the range, generally $975.00 per paperwork violation. And the first offense for “knowingly employing an unauthorized worker, or continuing to employ an unauthorized worker” after gaining knowledge that he/she is not authorized, is $275.00 to $2,200.00 per worker. These fines increase up to $11,000 for each unauthorized worker on a third offense, and company managers and owners can face jail time if the company is engaged in ‘a pattern and practice’ of hiring unauthorized workers.

A new development that we are seeing is the intersection of immigration violations with tax violations. After suffering through one of the worst recessions since the Great Depression, the federal and state governments are seeking to alleviate revenue shortfalls through aggressive regulatory enforcement. The Department of Labor has been authorized to hire 100 additional enforcement agents. The focus: Investigating companies to determine whether the individuals working are misclassified as independent contractors. The Department of Labor believes it can recoup $7 billion through enforcement of these laws. The agency believes construction workers, are among those workers most commonly misclassified as independent contractors. If a DOL investigation determines that a company’s worker is an employee, and not an independent contractor, the company may also face fines for not maintaining properly completed I-9s for those individuals.

Additionally, US Attorneys General are bringing tax fraud charges against employers who pay workers under the table, contending they are defrauding the Internal Revenue Service by failing to pay federal payroll tax.

I have witnessed an increase in ICE I-9 compliance and enforcement visits to employers in the Carolinas. Targeted industries for enforcement include construction and hospitality, among several other industries. The amount of ICE fines levied against several small employers, solely for I-9 paperwork violations, is so high that these companies risk being put out of business. What can employers do to guard against this heightened enforcement? I have encouraged employers to take the following actions so they are prepared for the ICE “knock at the door”:

1. Designate one individual to serve as the company’s point person for I-9 compliance. That person must obtain the employee’s signature and their claim to being a US Citizen, Legal Permanent Resident, or other person with temporary work authorization. This must be done on the first day of employment. Within three days of hire, the company representative must review employees’ documents, properly complete, sign and date the company’s section of the I-9, and create a “reminder” if the employee has provided evidence of temporary work permission; and

2. Hire an immigration law specialist to conduct an initial I-9 review and schedule follow-up periodic reviews to monitor I-9 compliance, and provide additional training as needed.

Be aware of your duty to comply with I-9 employment eligibility verification. Consult with an immigration law specialist to develop and implement proper I-9 procedures. And especially within the construction industry, contact a qualified lawyer to ensure that your current relationship with all independent contractors continues to legally qualify for the ‘independent contractor’ designation. By taking these actions, you will be better prepared for an ICE or DOL site visit.

Alan Gordon is a NC Bar Board Certified Immigration Specialist. His law firm handles matters regarding US immigration and naturalization laws and their intersection with employer and employee needs. For more information call 888-332-2555 or email: info@greencards.com

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