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January 5, 2016
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By Schaun D. Henry

Recently, an agricultural company faced more than $100,000 in fines after U.S. Immigration and Customs Enforcement (ICE) auditors identified more than 100 substantive violations – each carrying a $1,100 maximum penalty.

Not only did the fine impact the company’s bottom line, but the violations created the likelihood of more stringent oversight from the government and the possibility of steeper fines for future errors pertaining to an employee’s work status.

The federal government has again begun to crack down on companies that employ undocumented workers, and the financial consequences for businesses can be catastrophic.

Employees are required to confirm workers’ eligibility for employment by completing Form I-9, but there are ways undocumented workers can circumvent this process, including fraud and identity theft. Businesses that rely on subcontractors, such as employment agencies, face even greater risks because they often cannot independently review and confirm each employee’s eligibility. Nondiscrimination laws can also make it difficult for businesses to dig too deeply into an employee’s status when a potential I-9 discrepancy is identified.

The federal E-Verify program was created in 1997 to help businesses determine employment eligibility.  Many business owners believe participating in E-Verify offers them protection against prosecution, but that is not always the case.E-verify creates a rebuttable presumption that you have not knowingly violated the law.

Using this system essentially enters a company into a contract with the federal government, and a business must be aware of all of its responsibilities under this agreement. A business that fails to meet program requirements is just as susceptible to corrective action as a company that elects not to use the system.

Here are three ways you can limit the threat to your company from the hiring of undocumented workers:

1. Conduct regular I-9 reviews

Many businesses fail to review I-9 forms until an ICE audit is scheduled. At that point, an assessment is too late. Businesses should establish an ongoing internal review plan to be conducted at regular intervals. Larger companies that might have trouble reviewing all I-9 forms each year can still show a reasonable commitment by creating a policy to review 10 to 15 percent of forms annually.

In addition to identifying potential mismatches, a regular review process might be helpful in demonstrating to federal investigators that the company is taking meaningful steps to prevent violations.

2. Establish a policy to terminate employees who misrepresent employment status

A written policy calling for the termination of employees who are not honest during the hiring process also signals a good-faith effort to comply with the law. A lack of a clear policy can create the appearance that a business is complicit in employing undocumented workers, which will lead to larger fines and increased scrutiny.

It is crucial for employers to implement the policy consistently to minimize the risk of violating anti-discrimination laws. Navigating this legal gray area might require the advice of an attorney who understands the complexities of immigration and employment law.

3. Include an indemnification clause in labor contracts

Temporary employment agencies are responsible for determining a person’s eligibility for employment, but businesses that use their services can be held financially responsible and may even be considered joint employers, if the employment agency doesn’t perform its due diligence. However, a business can take steps to protect itself by including a clause in the contract that holds a contractor financially responsible for any damages resulting from the co-employment of an undocumented worker.