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June 2011

Employers Beware ? New Wave of Immigration Audits by Federal Government

The U.S. government continues to crack down on the hiring of employees without authorization to work in the United States.  On June 15, 2011, U.S. Immigration and Customs Enforcement (ICE) announced it would send Notices of Inspection to 1,000 companies informing them of the impending audit of their hiring records.  ICE agents will inspect the hiring records to determine whether the businesses are hiring undocumented workers.

ICE, a division of the Department of Homeland Security, says it is focusing on those employers whose businesses have a key role in keeping national infrastructure safe.  The targeted sectors include agriculture, financial services, commercial nuclear reactors, drinking water and water treatment, postal and shipping, healthcare, and transportation.  According to ICE public affairs spokeswoman Gillian Christensen, "The inspections will touch on employers of all sizes and in every state in the nation, with an emphasis on businesses related to critical infrastructure and key resources."

Audits involve a comprehensive review of Form I-9s, which employers are required to complete and retain for each individual hired in the United States.  This form requires employers to review and record the individual's identity documentation and determine whether the documents reasonably appear to be genuine and related to the individual.  The Notices often request not only I-9 documentation, but payroll records, copies of immigration filings, copies of Social Security Administration communications requesting corrections, information on independent contractors, and related information.  Generally, all documentation must be produced within three business days of the employer's receipt of the Notice.

Including the latest audit announcement, ICE has conducted more than 2,300 audits this year, more than the 2,196 total audits in 2010.  The 2010 audits resulted in the criminal arrest of approximately 196 employers and more than 100 convictions.  In addition to asset forfeiture and criminal prosecution, audits can result in steep civil and administrative penalties, including significant fines and potential debarment from federal contracts.

Employers should also be aware of unannounced visits from the Fraud Detection and National Security Division (FDNS) of the U.S. Customs and Immigration Service (USCIS), which is separate from ICE.  The FDNS has been conducting random visits without notice to businesses that employ H-1B visa holders.  The FDNS Division has conducted approximately 25,000 site visits since November 2009.  A USCIS agent or contractor will usually arrive unannounced and request to review the employment conditions of a nonimmigrant worker, usually H-1B employees.  The agent may request to speak to the employee, review the workplace, and review payroll and related records.

To prepare for audits and unannounced visits, employers must develop and implement strong compliance policies, audit their I-9s and H-1B files regularly, and plan in advance how to respond when immigration agents visit the company.  Human Resources personnel as well as employees holding H-1B visas should be prepared for such visits, for the protection of both employer and employee.

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