by Michael J. Wildes, Managing Partner
Following years of frustrating silence from the federal government in response to nationwide pleas for comprehensive immigration reform, many state legislators felt compelled to draft local immigration laws to finally address this issue directly. Notably, Arizona, Alabama and Georgia legislators have received mixed reviews from critics and advocates of immigration reform upon drafting broad immigration bills that will have dramatic impacts on the states’ employment practices. The catalyst for such sweeping state action can be attributed to America’s recent economic crisis, which resulted in record unemployment rates all over the country. Accordingly, a primary reason for the new immigration regulations were to provide more job opportunities for state citizens over undocumented aliens as part of a statewide effort to promote fiscal recovery.
Arizona has been one of the centers of state immigration reform since 2007, enacting arguably the most controversial anti-illegal immigration measures in recent United States history. Its laws have addressed the main networks of immigrant activity, imposing sanctions on education opportunities, housing laws, and occupational concerns. In particular, the laws affecting employment have been hotly contested among state inhabitants, thousands of which comprise Arizona’s undocumented immigrant population.
On May 26, 2011, the United States Supreme Court delivered a landmark decision validating Arizona’s newest set of immigration regulations, having a direct impact on local employment practices. In Chamber of Commerce of the United States v. Whiting, 563 U.S. 09-115 (2011), the Court upheld by a 5-3 majority that Arizona’s local authorities were permitted to penalizes businesses for hiring workers who entered state borders illegally. The “Legal Arizona Workers Act” subjects all persons and business who either knowingly or intentionally hire an unauthorized alien to civil and criminal sanctions. Nicknamed the “business death penalty,” state authorities may now audit companies suspected of employing illegal immigrants, resulting in heavy fines, loss of business licenses, and even imprisonment for repeated offenses.
Supporters of the law have praised the Court for its progressive finding amidst a federal government that has been criticized for its lackluster response to request for immigration reform. On the other hand, civil rights activists are outraged at the slippery slope such policies will create among targeted minorities. In his opinion, Justice Breyer pointed out that the Arizona law upsets a “balance in federal law between dissuading employers from hiring illegal workers and ensuring that people are not discriminated against” based on their race, ethnicity and national origins. Specifically, the Hispanic populations along the south and southwestern regions of the United States who have legal status feel that they would be unfairly discriminated against by employers who will be reluctant to hire non-citizen employees in fear of a government inspection. In addition, the cost, the time lag, and the red tape involved setting up a system that would compound such employers’ concerns would be very difficult for local businesses to incur, especially during this time of economic recovery.
Shortly after, other states began to follow suit after the Whiting decision expressly recognized a state’s authority to regulate immigration laws within its borders. In a series of “copy cat” bills that followed, state leaders were motivated to reevaluate their immigration laws amidst an upswing in national sentiment that favored sweeping anti-illegal immigration enforcement. For example, on June 9th, Alabama enacted many new restrictions in their local immigration laws that were eerily reminiscent of Arizona’s newest provisions. Specifically, the law requires businesses to use a database called ‘E-Verify’ to confirm the immigration status of new employees—subjecting violators to similar legal consequences.
Owned and operated by the U.S. Department of Homeland Security (DHS), E-Verify is an internet based program that allows employers to determine the eligibility of a prospective employee to work in the United States. The system cross references an employee’s I-9, Employment Eligibility Verification Form to data from U.S. government records. If the information does not match up, E-Verify sends an alert to the employer who in turn, must contact the appropriate federal government agency to resolve the discrepancy, at the risk of assuming liability itself. Since its inception, over 246,000 employers have been enrolled in E-verify, representing over 850,000 job sites, with an astonishing 5.3 million cases created to date.
The staggering numbers produced by E-Verify in such a short amount of time made other neighboring legislators eager to use the new system to address their state’s immigration problems. The ink had barely dried on Alabama’s new bill when other southern states including South Carolina finalized their own set of immigration regulations, now attracted to the anticipated success of such radical steps to handle their undocumented inhabitants. By a 69-43 vote, the state House of Representatives conceded to the Senate’s amendments requiring employers to use E-Verify to check their employees’ resident status. The measure creates a grace period of one year for employers, during which penalties will be probationary. After that, employers can face temporary suspension of their business license and reinstatement fees, leading up to license revocation and criminal punishment if the issues are not timely addressed.
Supporters of the new bills have applauded the reform, claiming that such restrictions on immigrant employment are critically needed to prevent illegal immigrants from securing U.S jobs that are funded by federal stimulus funds. Currently, there about 24 million Americans who are unemployed or who have given up looking for work. Of these men and women, 19 million are Americans are without a college degree, claiming to be most hurt by unskilled illegal immigrant workers dominating industries that take advantage of their cheap labor. Now, the increased availability for urgent work will motivate employees to take these empty positions. For employers, the convenience of E-Verify’ s implementation makes the adjustment process much less burdensome, who additionally enjoy immunity from civil and criminal penalties for knowingly hiring an illegal worker who has slipped by the system. Reform advocates also assert that the verification system does not actually foster discrimination, as DHS officials prohibit employers from using E-Verify to screen potential hires.
However, despite the short term advantages of these new laws, immigrant rights groups steadily oppose the new restrictions, remaining skeptical of the long term effects such widespread reform will have on our nation’s economy, job market, immigrant communities, as well as America’s international reputation for foreigners seeking to contribute to our nation’s workforce. As more states continue to empower their local officials with the authority to investigate local job markets in search of illegal immigrants, the anticipated results create a palpable tension between the over 11 million undocumented immigrants within United States borders and state officials who are compelled to prioritize their duties to their citizens first.
As it stands, undocumented immigrants living in America contribute over $1 billion to our nation’s economy—a vast majority of whom occupy the southern borders of this country. The cheaper labor helps keep domestic costs down, lessening our reliance on foreign products. Moreover, there is no guarantee that the jobs opened up by these removal processes will be taken up by American workers without more costly measures in place. For example, last year, Arturo Rodriguez, President of the United Farm Workers Union, established the “Take Our Jobs” campaign in response to American citizens who were protesting immigrant farm labor. Of the nearly 90,000 inquiries that were made, only 11 Americans ended up taking the jobs. Thus, the exchange of ‘immigrants for citizens’ theory remains unsubstantiated. By simply excising these immigrant workers from our borders without any definite plans to replace their contributions leaves a gaping hole in our national economic structure.
For businesses, the financial consequences in implementing the aforementioned policies will have a direct impact on the state’s citizens. Since these new programs are not federally funded, the burden shifts to the local taxpayer to subsidize the added costs of its new immigration task forces. Furthermore, employers will also incur substantial financial difficulties if found to be in violation of the new immigration laws whose business thrive from undocumented immigrant labor. In particular, the agricultural and hospitality industries, notorious for their employment of illegal immigrants are now directly targeted for government audits to ensure that all employees are lawfully working. The costly impact of such violations will cost companies millions of dollars, suspensions, and even shutdowns, thus directly counterproductive to the legislative intent to promote more job opportunities for its citizens. As a practical matter, business cannot reasonably be expected to hire scores of lawful residents to replace their former employees with significantly higher wages while simultaneously having their resources drained on immigration penalties.
It also serves to note that the reputation of our nation, as a country that welcomes immigrants to our borders, may now be viewed as turning our backs on the same people responsible for making the United States one of the most prospering nations in world. The perception that the American government is permitting its states to block out immigrant labor serves as a deterrent to foreigners who may take their talents and resources to other countries. Even though the new laws do not impose restrictions on these foreign nationals lawfully entering the country, the anti-immigrant stigma created as a by-product of the reform process could potentially have a chilling effect on the desperately needed foreign resources to rebuild our nation’s economy.
Keeping up with Immigration laws:
As various political groups continue to debate this new trend of immigration reform, employers must nevertheless abide by the enacted laws as they develop. Furthermore, as E-Verify’s use inches closer to mandatory nationwide application, employers need to prepare for a storm of government audits and how to handle them as efficiently as possible.
Currently, the federal government has taken steps to perpetuate E-Verify’s expansion across America. Starting on June 15th, the Immigration and Customs Enforcement (ICE) agency expedited this process by enacting employment enforcement actions to be administered throughout the United States. These measures have business nationwide expecting to be one of the thousands of recipients of Notices of Inspection (NOIs) to ensure their compliance with proper I-9 documentation and other current immigration standards.
Now, more than ever, no business can afford to have their license suspended or revoked, nor needlessly waste time and money in ensuring their employment practices are consistent with the new regulations. In particular, those companies that are already stigmatized for catering specifically to undocumented, low skilled workers will be the first on the chopping block. Previously, while most audits were completely randomized, the upcoming inspections have been assigned largely due to tips and leads that suspect certain businesses to be in violation of hiring restrictions. Moreover, corporations with locations across the United States can reasonably expect to receive multiple audits if near large immigrant communities, especially when prior audits at other locations do not yield significant results.
How to ‘chill’ an ICE audit:
1. Organization: All legal strategies aside, the proper organization of employee files is essential in responding to a audit. The short amount of time between an NOI and an audit is barely enough to account for all documented employees. In most cases, ICE allows approximately three business days between service and audit for the company to produce all of its properly filled out I-9 forms. Oftentimes, the most tedious and frustrating part of this process is going through thousands of improperly filled out forms that cumulatively lead to a presumption of widespread, improper company practice, resulting in both technical and substantive fines that could have been easily remedied if proper procedures had been in place.
Store I-9 forms safely and be able to retrieve them within three business days, should they be requested. It is best to keep your I-9 forms in one place –separate from other personnel files and employer records so sensitive information will not be unnecessarily revealed during an audit
2. Keep track of all employees: Review and understand the retention requirements: Essentially, for current employees, the I-9 must be retained throughout the life span of the employment. For terminated employees, the I-9 must be retained as follows: three years from hire or one year from discharge, whichever is later. We recommend the creation of an excel spreadsheet to keep track of the hire date, the termination date, and the retention date. Once the retention date has passed, the I-9 may be purged.
3. Prevent against Fraud – Oftentimes, employers are unaware their employees have entered the U.S. illegally, as they are given fraudulent documentation by the prospective worker. Since the exchange of documentation is usually more of a formality than a scrutinized proceeding, many workers enter the business with forged work visas, social security cards, drivers licenses, etc. Despite their actions, the liability falls on the employer to have recognized and eliminated such applicants from their company when given fraudulent paperwork. However, as the methods for producing fake documents become more pervasive and sophisticated, employers rarely have the training necessary to determine the validity of such forms of identification.
As a result, employers must be able to cross reference employee documentation with a database of valid forms of ID to ensure compliance in the event of an audit. The problem is however, that this may cause discrimination towards foreigners who apply for jobs with targeted employment agencies (i.e. restaurant, hotel, agricultural). To avoid such practices, employers are advised to consult unbiased/objective third party legal experts to verify the documentation. Once again, the added expense of this process is only a fraction of the legal implications that a company will incur if illegal documents are found by ICE instead.
4. Stay Updated with Compliance Standards: As the immigrant-employment standards continue to be debated throughout our nation, we can expect to see various changes in these laws before the state and federal governments can come to a consensus on an agreeable course of action. Given the backlash most of these new laws have created, it is reasonable to assume that it will be some time until a lasting set of immigration laws will be established for American companies to refer to. Until then, immigration officials foresee subtle yet significant changes in our immigration laws—the knowledge of which could have substantial impacts on employment practices with regard to audit procedures, penalties, and the legal channels available to address license suspensions and revocations. As always, handling such issues as they arise are time sensitive processes which do not excuse legal ignorance in the event of delays.
5. Perform internal audits regularly. An internal audit is the best way to detect and correct errors and ensure that I-9s have been completed properly for your workforce. It can also demonstrate a “good faith effort” to remain compliant which could spare you serious penalties in the event of a government audit.
6. Establish a “tickler” system. Alert yourself to fast approaching deadlines for I-9 completion as well as approaching work authorization expiration dates.
Continuously adjusting to the newest attempts at immigration reform is no doubt a burdensome effort for businesses to maintain. Nevertheless, such hurdles are a necessary evil to keep one’s business afloat, and company resources must be allocated accordingly. Any immigration lawyer worth his or her salt will strongly advocate the importance of staying on top of various immigration document completion deadlines and the crucial need for employers to keep their fingers on the pulse of this rapidly changing dynamic. When in doubt, ask an expert instead of taking chances in a business climate that may not be able to provide business owners with a second chance at success if their license has been suspended or revoked. So before your establishment is issued a subpoena or NOI, consult with an immigration attorney.
We are here to assist you in navigating the intricacies of this evolving process and are here to answer any questions you may have. The time to act is now. Be proactive, not reactive.
Michael Wildes is Managing Partner of Wildes & Weinberg P.C., which specializes in employment and investment-based immigration, business and treaty visas, labor certification/job offer sponsorship for permanent residence, naturalization/U.S. citizenship, Form I-9 compliance, family-based immigration, student and religious worker visas, and all other temporary and permanent visa. Michael is a former federal prosecutor and recently completed two terms as the mayor of Englewood, New Jersey. He can be contacted at firstname.lastname@example.org or (212) 753-3468.
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