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If Immigration Audits Your Employees' Legal Status

The U.S. Homeland Security Dept. under the Obama Administration has continued a Bush-era policy of focusing on employers when enforcing immigration laws. Hiring records, even for small and medium-size businesses, are coming under additional scrutiny, and fines are being levied for violations. Aleicia Latimer is associate general counsel at AlphaStaff Group, a Florida-based payroll, benefits, and human resources outsourcer serving small and midsize companies. She says that according to Homeland Security, more than 600 businesses have recently been informed that their I-9 forms will be audited to verify workers' legal status. Latimer spoke recently to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.

The immigration cases that get a lot of publicity tend to take place at large manufacturers, agriculture concerns, and food processors. How much do smaller employers need to worry about audits?

ICE [U.S. Immigration & Customs Enforcement] says they are auditing by industry, not by size. That means a lot of focus on the industries where there have historically been issues with immigration violations, such as restaurants, hotels, and manufacturing companies. But the audits are not just relegated to those companies.

We tell clients that all employers should require their employees to fill out I-9s, which are federal employment verification forms. Even very small companies, who may not technically fall under the jurisdiction of the rule, are still recommended to do this. It makes sense.

What does the I-9 form involve, and where do you get it?

The forms are available at the Web site of the U.S. Citizenship & Immigration Services—just click on "Form I-9" and download them. That Web site also has a lot of good information about how the forms are used and what's required, so I recommend that anyone with employees take a few minutes to look through it.

When you hire a new employee, you ask them for two forms of I.D.—or they can use an active passport—that verifies they can legally work in the U.S. Give them the list of acceptable papers and let them pick what I.D. they want to bring to you. Then you verify it, complete the I-9 form, and keep it on file for that employee.

How much verification is the employer supposed to do? For instance, what if an employee shows a document that looks valid but later turns out to be a fake?

The form says that you must make sure the documents are valid, and the Web site has pictures of what valid documents should look like. But they're not asking you to be an FBI investigator and run it under a black light. If it looks funny, ink is running all over your hand, and you can see another picture underneath the employee's picture, clearly you can tell it's not a valid document. If you catch something like that, send the employee home and ask them to bring you a valid document. That person probably won't ever be back.

If you're in a business where there's a lot of concern about validity, you can contact the Social Security Administration, and register for a service that allows you to call in your employees' Social Security numbers and have them validated. Sometimes what happens is that an employee has gotten married, and they haven't changed their name with Social Security, so your request will come back as a "no-match." If that happens, you can call the employee in, explain the situation and ask her to clear it up or bring in another piece of documentation, such as her marriage license.

Entrepreneurs worry about claims of employment discrimination. How should they deal with legal concerns when they're asking employees to prove their legal status?

People are understandably afraid about issues like discrimination on the basis of national origin, and you don't want to get in trouble there. But if people don't give you back their documentation, it's better to remind them to go home and come back when they've got the right documentation than to get caught later and stuck with a fine.

The way to avoid lawsuits—and this is really, really important—is to make sure you're absolutely consistent. Don't let John get by without the proper documents because he looks like a good person, but then require Mohammad or Juan to bring in documentation. Require the forms for everyone, across the board, no matter what they look like or where they come from.

How much time and money should small employers expect to devote to immigration issues? Do they need to consult an attorney?

There's some time involved and the soft costs of making sure the paperwork is taken care of. It doesn't cost anything to print out forms or use eVerify, and you shouldn't need an attorney to look at your I-9s. If you are audited by ICE, you might want to ask an attorney to help you sort things out or negotiate fines.

Can you explain what eVerify is and who needs to use it?

It's the federal electronic employee verification system run by the Department of Homeland Security and the Social Security Administration. You can get information about it at the Web site. It's mandatory for federal contractors and in some states, such as Arizona. In other states, it's voluntary. Small business owners should check with their state Labor Dept. or Secretary of State to find out if eVerify is required. If it is, there's online training on how to use it and you utilize the mechanism via the Web, very similar to how you fill out the I-9.

Where do small business owners tend to get tripped up on immigration rules?

A lot of people get mistaken about how long an employee has to fill out an I-9. When someone is hired, they have to fill out the form and the employer should have it on file within three days of the hire. What happens with small companies is they have someone doing personnel and also handling 18 other issues. So that person forgets and three months later, they don't have the I-9 on file. If ICE were to walk onto your premises and ask to see those I-9s, that missing form would be found as a deficiency, and they could potentially fine you for the oversight.

So I recommend that when you hire someone, you make yourself a note about what date the paperwork has to be on file and then make sure you follow up. If you have Outlook, list it as an alert so you'll get a reminder that pops up on the deadline.

What do you tell small business owners who get audited by ICE? Do they typically get a warning, or do immigration officers just show up?

Sometimes they do give you a heads-up and let you know they will be there on a certain date, but they don't have to. If you have an on-site audit, you should be very polite, do what the officers ask you, and don't be on the defensive or take it as a threat. They are just doing their jobs.

Ask to make copies of any documents that they take, so you will have them in case issues arise, because you may not get your original documents back. The most important thing is not to be adversarial because the more adversarial you are, the more adversarial they will be.

What kinds of penalties are possible if violations turn up during an audit?

The fines range from $110 to $1,100 per violation, and every employee that doesn't have an I-9 on file with you counts as a violation. So if you have 500 deficiencies, you'll have the potential for civil fines on every one—even if your employees are not illegal. The higher fines are for employers who knowingly hire people who are not legally able to work in this country. There are also criminal penalties spelled out for egregious violations, though I haven't read of anyone going to jail yet.

Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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