Immigration Employment Compliance Strategy

AuthorCharles M. Miller/Daniel Brown/Marcine Anne Seid
ProfessionFounding partner of the Miller Law Offices, Studio City, California/Partner in Fragomen, Del Rey, Bernsen & Loewy LLP's Washington, D.C./Principal attorney of the Seid Law Group, Palo Alto, California
It is now necessary to assess the forward effectiveness of a company’s compliance with
the various immigration employment compliance enforcement laws and policies. Recent
Department of Homeland Security (DHS) worksite enforcement actions demonstrate that
employer immigration compliance is a hot- button issue and promises to remain so for the
indenite future.
The immigration due diligence strategy used for successor- in- interest corporate sit-
uations has evolved into the voluntary private external audit to determine whether a
company’s compliance program, policies, and training meet statutory and regulatory
requirements. Most important, such an audit will produce recommendations as to the
mitigation methods for potential violations and the current best compliance practices. The
private external audit contains three components: the Form I-9 audit, the assessment of
the existing compliance program, and the liability audit.1
Employer immigration compliance responsibilities began as legal requirements with
the passage of the Immigration Reform and Control Act (IRCA) in 1986.2 It is now clear,
with the latest Immigration and Customs Enforcement (ICE) worksite enforcement actions
and criminal cases and the Federal Acquisition Regulation (FAR) E-Verify nal rule for
federal contractors,3 that the legal responsibilities and potential risks for employers under
both the civil and criminal law have been enhanced.
ICE has emphasized its criminal Worksite Enforcement program targeting employers
who knowingly employ or continue to employ unauthorized workers. ICE investigations
in the retail, food processing, construction, and restaurant and hospitality industries have
resulted in criminal indictments and convictions. The highest- risk industries are those
related to critical infrastructure sites that have already been the focus of ICE worksite
enforcement programs since September 11, 2001. Those critical infrastructure worksite
1. Chapter 10.
2. Act of Nov. 5, 1986, Pub. L. No. 99-603.
3. Chapter 8.
208 Immigration Compliance and Best Practices
enforcement programs include airports and nuclear power plants, utility companies,
chemical plants, military bases, and defense subcontractor worksites.
ICE administrative audits have targeted critical infrastructure industries. Future ICE
inspections may include the information technology, nancial services, and construction
industries, as well as companies with prior histories of agency enforcement actions, gov-
ernment contractors, and those employers that outsource their workforce or use contrac-
tors and subcontractors.4
There are situations in which a company stands in immediate risk of worksite enforce-
ment activities, including the execution of search warrants.5 Employers with histories of
employer sanctions civil penalty assessments or prior criminal cases and employers that
have been identied as targets of a federal grand jury investigation demonstrate high-
risk indicators for enforcement activity. Those companies that have experienced negative
media reports about wage and hour and child labor investigations have also found that
such state and federal investigations were closely followed by ICE worksite enforcement
actions.6 Those targeted companies should immediately contemplate instituting voluntary
private external audits in advance of the more intrusive DHS enforcement activity.7
These auditing responsibilities have already been voluntarily assumed by some
employers because of Securities and Exchange Commission reporting requirements, as
conditions of civil and criminal settlements, for company due diligence, or as contract con-
ditions imposed by other companies. These enhanced responsibilities have also been vol-
untarily assumed by employers who have chosen to enroll in the ICE Mutual Agreement
between Government and Employers (IMAGE) program.8 The IMAGE program requires
that member employers submit to an ICE audit, conduct a private external or indepen-
dent internal audit, use the E-Verify program for all new hires, submit a self- assessment
report, and adhere to the IMAGE Best Employment Practices.9 Government contractors
and certain subcontractors required to join the E-Verify program under the FAR nal rule
necessarily agree to periodic visits by the DHS, the Social Security Administration (SSA),
or their “authorized agents or designees” to review Forms I-9 and E-Verify transaction
records.10 The government agents may interview employees under the E-Verify memoran-
dum of understanding (MOU) as well.11
4. See infra § 9.03, § 9.07.
5. Search warrant issues are discussed in Chapter 1 § 1.04.1.
6. David Leopold, Immigration, Citizenship, Refugees, Border Security, and International Law Sub-
committee of the House Judiciary Committee (July 24, 2008), AILA InfoNet Doc. No. 08072440.
7. Chapter 10.
8. Beginning in 2006, the DHS encouraged employers in industries that traditionally utilize immi-
grant labor to voluntarily join the IMAGE program. IMAGE- certied employers provide ICE with
information concerning newly hired employees in exchange for agency cooperation. See Chapter 7
§ 7.02 for more information.
9. Id.
10. E-Verify Memorandum of Understanding, Appendix J.
11. Id.
Immigration Employment Compliance Strategy 209
A government Form I-9 inspection, undertaken pursuant to IRCA administrative
notice by the DHS or the Department of Labor (DOL), or as the result of the execution of
a criminal search warrant, is far more intrusive than a private audit.12
For management and their counsel, some components of the annual compliance audit
will be familiar from the due diligence that precedes mergers, acquisitions, IPOs, and
other company restructuring events. Now, however, stockholders, directors, executives,
and managers face enhanced compliance responsibilities going forward. These new com-
pliance duties demonstrate that an effective worksite enforcement compliance strategy is
necessary, and its efcient execution must be a high priority. By the time there is an ICE
worksite enforcement action, remediation and any possible negotiations will be under the
supervision of the DHS and/or the U.S. Attorney’s Ofce in the city where the enforcement
action takes place.
In April 2006, the ICE, in conjunction with New York State and local law enforce-
ment agencies, conducted a worksite enforcement operation targeting IFCO Systems
North America, Inc., a major pallet services company headquartered in Houston, Texas.
ICE search warrants were executed at more than forty IFCO plants and related locations
in twenty- six states.13
In addition to 1,187 allegedly undocumented employees, nine active and former IFCO
managers were arrested and pled guilty to various charges including conspiring to trans-
port, harbor, encourage, and induce illegal aliens to reside in the United States for commer-
cial advantage and private nancial gain.14
On December 19, 2008, IFCO entered into a corporate non- prosecution agreement
with the United States Attorney for the Northern District of New York, acceding to com-
pliance terms for a four- year period and a forfeiture and penalty payment plan that totaled
$20.7 million over four years.15 Signicantly, the agreement also imposed a comprehensive,
risk- based compliance program consistent with U.S. Sentencing Commission guidelines.
Supervised by independent, external, corporate compliance counsel, the IFCO compliance
program had a thirty- six- month term with the following remedial measures:
Designation of a full- time compliance ofcer, approved by the U.S. Attorney’s
Ofce, to ensure IFCO’s compliance under the agreement;
Establishment of procedures to ensure the regular participation and involvement of
IFCO’s board of directors and senior management in the supervision and operation
of the compliance program;
12. A government administrative audit takes place after seventy- two- hour notice, and the company
attorney can be present (cf. a search warrant, which is usually executed without notice).
13. ICE News Release, ICE Agents Arrest Seven Managers of Nationwide Pallet Company and
1,187 of the Firm’s Illegal Alien Employees in 26 States (Apr. 20, 2006).
14. ICE News Release, IFCO Systems Managers Charged with Unlawfully Employing Illegal
Aliens (June 2, 2010).
15. ICE News Release, IFCO Systems Enters into Record $20.7 Million Settlement of Claims
Related to Employment of Illegal Aliens (Dec. 19, 2008).

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