On Dec 14 2009 by Elise A. Fialkowski

Immigration Compliance Vital to Avoid Fines, Criminal Sanctions

The restaurant and hospitality industries very likely will be a target of the Obama administration’s renewed efforts to crack down on the employment of illegal immigrants.

Since the 2003 establishment of Immigration and Customs Enforcement, or ICE, the agency responsible for enforcing immigration laws at the worksite, restaurant owners and operators have been a favorite target of government investigations.  High-profile raids have occurred across the country, and a number of employers—both large and small—in the industry have been subject to civil fines, penalties and even criminal charges.

Upon taking office, the Obama administration pledged to continue to increase resources in an effort to crack down on employers who hire undocumented immigrants.  Since that time ICE has launched hundreds of investigations nationwide.  In the first week of October, an internal ICE memorandum from April of 2009 that details ICE’s enforcement strategy was made public.  It reveals that ICE’s worksite enforcement priorities not only emphasize the importance of continuing worksite investigations, but also the development of “criminal cases against employers who hire and use illegal workers.”  ICE agents are encouraged to prosecute employers after finding evidence of mistreatment of workers, trafficking, smuggling, harboring, visa fraud, document fraud and other violations.  Those at risk of prosecution include the full panoply of management, ranging from business owners to corporate managers to supervisors.

The memo outlines the mission of the enforcement strategy to include penalizing employers who knowingly hire unauthorized workers; deterring employers who are inclined to hire unauthorized workers; and encouraging employers to make sure that they are in compliance with immigration regulations.  Restaurants and cafeterias located at critical infrastructure sites that include airports, military bases, defense facilities and seaports can expect to continue to be favorite targets of ICE scrutiny.  Additionally, ICE guidance encourages the initiation of debarment proceedings against federal contractors that have knowingly hired unauthorized workers.

The memo encourages agents to use informants, cooperating witnesses, undercover agents, consensual searches and I-9 audits as investigative tools.  It reminds agents to obtain a warrant, indictment or a commitment from a U.S. attorney to prosecute the targeted employer before arresting any unauthorized employees at a worksite.  It is important to note that in enforcement actions ICE has two bites at the apple: It can pursue criminal sanctions and administrative fines against employers.

According to the memo, ICE’s “most important administrative tool” in conducting investigations is the Notice of Inspection, or NOI.  These inspections include a detailed review of an employer’s entire employment eligibility verification process, including its I-9 forms and training and recordkeeping procedures.  In fact, following the issuance of the memo and a proclamation by John Morton, the secretary of ICE, that employers “are going to see more audits regularly and on a larger scale,” ICE issued NOIs to 652 employers across the country.  Compare this to 2008, when only 503 similar notices were sent to employers for the entire year.

Following the announcement, a number of employers in the meatpacking, restaurant and service industries found themselves the recipients of NOIs.  In July 2009, Krispy Kreme Doughnut Corp. was fined $40,000 for I-9 violations at one of its stores in Ohio.  In August 2009, Texas-based Shipley Do-Nut Flour and Supply Company Inc. was sentenced to court supervision for three years, and paid a criminal fine of $250,000 and forfeited $1.334 million in assets for harboring unauthorized workers.

The current focus on investigations and prosecutions is a significant departure from the days of legacy INS when employers could expect a slap on the wrist in the form on minimal fines as just another cost of doing business.  In this era of increased enforcement, employers must proactively preempt immigration-related liabilities.  Employers should conduct internal I-9 audits to identify issues and correct violations.  Part and parcel of these reviews should be an evaluation of the employers’ current record-keeping practices to determine if new training programs are needed for HR personnel.  Immigration counsel can be invaluable during these times in developing best practices, including establishing protocols for the verification of the identity and work eligibility of new hires, advising employers on safeguards against discrimination in the I-9 process, and advising on the use of E-Verify.

Employers who receive NOIs are advised to contact counsel as quickly as possible.  Generally, these notices only provide three days for employers to submit their I-9s to ICE for review.  It is advisable to have counsel review the company’s payroll to identify any discrepancies between the number of employees and the company’s I-9s.  During these three days, employers will want to double-check their I-9s, correcting those with obvious errors.  Employers who can demonstrate good-faith efforts to comply with immigration laws are more likely to avoid criminal penalties and be assessed lower level civil fines if violations are uncovered.

As a result of the continued focus on worksite enforcement, it is critical that employers in the restaurant and hospitality industries recognize that the time for immigration compliance has come.  Not only should employers ensure that they do not hire or continue to employ workers they know to be ineligible for employment, but they also must ensure that they are in full compliance with all regulatory requirements in case of government investigation.

Published in Nation’s Restaurant News, December 14, 2009