Tough penalties for failing to comply with immigration rules.

• Author: McGrath, Dorn
• Position: Ethics Corner

* Since 2009, the E-Verify Federal Contractor Rule requires most U.S. government contractors and subcontractors to verify the employment eligibility of employees assigned to federal contracts, and all newly hired employees.

An earlier Ethics Corner (Nov. 2009) explained how the new Federal Acquisition Regulation E-Verify Rule would work. Since then, government contractors have used the Internet-based system, operated by the U.S. Citizenship and Immigration Services in cooperation with the Social Security Administration, to verify employee work authorization by electronically submitting the information contained on the Form 1-9, Employment Eligibility Verification.

Experience has shown that there are several areas related to E-Verify that should be emphasized as part of every ethics and compliance program. All contractors must first decide whether to implement E-Verify for current employees assigned to government contracts only, or, alternatively, all existing company employees. At the same time, all newly hired federal contractor employees are subject to E-Verify.

Contractors often are subject to civil penalties for 1-9 violations discovered during Immigration and Customs Enforcement (ICE) audits, and those that knowingly hire or continue to employ undocumented workers run the added risks of criminal sanctions and referral to a suspension or debarment official. In a statement underscoring its policy on debarments, ICE announced that "[b]y using debarment in appropriate circumstances, the federal government can avoid working with businesses that employ an illegal workforce and unscrupulously undercut their competitors to gain an unfair market advantage because of reduced labor costs."

Contractors may also be suspended or debarred for violating the Immigration and Nationality Act. ICE suspension and debarment efforts primarily focus on employment violations related to the act, but contractors also may be debarred for fraud, antitrust violations, false statements and tax evasion.

An ethics and compliance program that effectively addresses immigration within an overall culture of compliance can go a long way in demonstrating to ICE that debarment is neither necessary nor appropriate. In such instances ICE may take no action, or it may enter an administrative agreement to specify corrective actions that allow a contractor to continue as a responsible government source of supplies or services. These agreements may require admission of misconduct...