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Unmasking Illegal Workers

HR Magazine, December 2007Verifying new workers' employment eligibility is one thing. But what should an HR pro do if a longtime, valued employee lacks proper documentation?

An anonymous telephone call triggered a startling revelation in the Milwaukee Police Department this spring. After investigating the tip, the department discovered that a respected, three-year police officer had been falsely claiming U.S. citizenship--a federal felony--by assuming the identity of his deceased cousin. The police officer pleaded guilty, will serve up to a year in jail and must leave the United States after completing his jail term.

Yet the plea brought little closure to a contentious issue that still concerns the city and the police department as well as communities and employers throughout the country. It should also concern HR professionals, who are "the first line of defense a company has against unauthorized workers," according to U.S. Immigration and Customs Enforcement (ICE) officials.

While the employment of undocumented workers in the United States represents a complex and emotionally charged issue, it's a potentially serious problem for human resource professionals. That's because HR professionals have a legal obligation to follow specific rules when verifying employment status during the hiring process; responding to the Social Security Administration (SSA) and ICE, an agency within the Department of Homeland Security (DHS), about possible violations; and, when necessary, firing unauthorized workers.

The same compliance process applies when a longtime, high-ranking or higher-profile employee is discovered to be unauthorized to work in the United States, although immigration lawyers say these instances are relatively rare.

"Generally, if the employer knows that the employee is an illegal worker, the choice is either to fire the employee or face civil and criminal penalties," says Marcy Stras, an attorney specializing in immigration and employment law and a partner with Baker & Hostetler LLP in Washington, D.C.

Michele Waslin, director of immigration policy research for the National Council of La Raza, the country's largest Hispanic civil rights and advocacy organization, also cautions HR professionals against any desire to "protect" employees-- at any level in their organizations--who are not authorized to work in the United States. "Employers who knowingly hire unauthorized workers do so at their own risk," she explains. "And other employers who are ‘protecting' undocumented workers are actually exploiting them and avoiding paying taxes." By fully understanding their legal obligations, HR professionals can steer clear of pitfalls that lead to the hiring of undocumented workers and avoid placing themselves and their organizations at risk of criminal and civil penalties.

An Exception Proves the Rule

An estimated 12 million undocumented, or illegal, immigrants reside in the United States, and most of them work. The vast majority of undocumented workers fill lower-level positions in industries that rely heavily on unskilled labor. Meat-packing corporations, poultry-processing plants, janitorial services providers, construction companies and textile mills figure prominently on a list of ICE worksite enforcement operations during the past two years.

Attorney Cletus Weber, co-founder and partner of Peng & Weber, a U.S. immigration law firm based in Mercer Island, Wash., identifies several reasons why the frequency of higherlevel, longer-term employees found to lack legal immigrant status is low.

First, as individuals ascend the socioeconomic ladder, they generally find more and easier options to legally obtain work authorization. For example, a bachelor's degree and a job offer are often sufficient to gain temporary work status, such as an H-1B visa that can be relatively easily converted into permanent green-card status.

Second, individuals who ascend the socioeconomic ladder typically are less willing to risk being fired, serving jail time and being deported.

Third, current enforcement processes focus more on employees who recently entered the workforce; if a new hire submits fake documents during the employment verification process and then subsequently rises to higher positions in a company during several years, that employee is unlikely to be exposed unless someone who knows the truth places an anonymous call or otherwise blows the whistle.

When a higher-level employee is discovered to be unauthorized to work, Weber suspects that the worker may be unaware of the problem. "For example, someone could have illegally entered as a baby or very young child and not know it," he explains. "The parents have no incentive to tell the child because doing so puts the child at risk, so the child doesn't know. Somehow, the parents obtain a Social Security number for the child, perhaps through fake birth records showing the child was born in the United States."

Why Compliance Gets Confusing

HR professionals should follow designated steps when initially verifying employment eligibility through the Form I-9 process and when responding to so-called "no-match" letters from the SSA or, less frequently, from ICE, whose officials may send out letters after auditing a company. No-match letters inform an organization of the existence of a discrepancy with an employee's Social Security number or immigration status information.

These steps are designed to ensure that organizations comply with the Immigration Reform and Control Act of 1986 (IRCA). The law makes it illegal for companies and organizations to employ people who are not authorized to work in the United States. In practice, however, larger moral, political and economic issues often emerge, confusing the compliance process and, at times, hampering its consistency and effectiveness.

The confusion surrounding the law stems from numerous sources. Controversial new federal and state rules, including guidelines issued by the DHS on responding to no-match letters and an Arizona law that mandates Arizona employers comply with a voluntary federal electronic employment verification system, further cloud the picture. The no-match guidelines and the Arizona law both received legal challenges this fall; a federal judge on Oct. 10 preliminarily enjoined the DHS from enforcing its rule. (For a link to an HR News article on the decision, see the Web Extras box on the top of this article.)

"Because of the employment opportunities in the United States and the lack of legal means to enter the United States and work here, many undocumented workers do use false or fraudulent documents," says Waslin. "This is a consequence of our broken immigration system--we need workers, employers hire workers, but legal channels for many workers to come here to work do not exist. It has bred a vast market for fake documents." The majority of employers that encounter problems with ICE and the SSA accept false documents from newly hired employees in good faith: They do not know that they have hired unauthorized workers.

However, Waslin points out that "there are some unscrupulous employers who knowingly [and] willingly hire unauthorized workers off the books. By doing this, employers avoid paying taxes and are better able to exploit their workforces."

Aggressive Enforcement

In the past, some companies could in large part get away with the practice of hiring undocumented workers because enforcement and the punishments that occurred when they got caught were relatively lax under the former Immigration and Naturalization Service, supplanted by ICE in 2003.

"Our current enforcement efforts far surpass the practices of the former Immigration and Naturalization Service, which involved lengthy paper reviews and nominal fines," Julie L. Myers, DHS assistant secretary for ICE, wrote in the Kansas City Star in June. "These fines were assessed under an outdated structure, were subject to substantial legal wrangling and ended up being nothing more than a slap on the wrist.

"Today is different," Myers continued. "… While these criminal investigations are complex and can take time, this approach makes penalties more than simply the cost of doing business. Violators face prosecution for federal crimes that include hiring illegal aliens, harboring illegal aliens, identity or document fraud, and Social Security fraud. They face the very real possibility of consequences to their freedom as well as to their finances."

ICE's enhanced enforcement efforts are evident in a constantly growing list of worksite operations. In the past year, ICE enforcement operations have culminated in arrests and, in some cases, federal indictments against employees of Fresh Del Monte Produce in Portland, Ore.; George's Processing, a poultry-processing plant in Butterfield, Mo.; Quality Service Integrity, a cleaning and sanitation services provider in Beardstown, Ill.; Greenville, Miss.-based Tarrasco Steel; temporary employment agency Jones Industrial Network in Baltimore; textile products company Michael Bianco Inc. in New Bedford, Mass.; and Swift & Co., a meat-processing corporation based in Greeley, Colo.

ICE has dramatically increased the fines it imposes on employers for violating IRCA. From fiscal years 2003 through 2006, total annual administrative fines imposed on employers never exceeded $46,480 in any given year. However, from Oct. 1, 2006, through July 31, 2007, ICE obtained criminal fines, restitutions and civil judgments from employers and company executives totaling more than $30 million.

Additionally, during the same time period, ICE worksite enforcement operations resulted in 742 criminal arrests, primarily of company owners and managers whose organizations knowingly employed illegal workers, and 3,651 administrative arrests, primarily of illegal immigrants on the job.

Both figures nearly match or exceed the total number of arrests in each category for the entire previous year. It is extremely rare for HR managers to be included in those arrests, according to immigration lawyers. Typically, the on-site managers, who work directly with the illegal workers, are arrested. At small companies, the owners also are sometimes arrested.

Emotional Issue, Legal Response

ICE's newly aggressive enforcement approach and the challenges surrounding new state and federal guidelines regarding unauthorized workers make I-9 compliance essential for HR professionals.

"HR managers can best avoid I-9 and no-match letter headaches by following the procedures carefully, applying them consistently and not trying to do less or more than the law requires," Weber explains. The following reminders can help HR professionals strike that balance:

  • Stick to the process. "HR is the watchdog for the company," Stras notes. "It should take a leadership position, with the assistance of the general counsel's office, at the employer. We encourage HR to have a written corporate I-9 compliance plan that contains the company procedures, policies, contact person and training provisions."

    That process should include having new employees fill out I-9 forms and evaluating that the documents presented to confirm their employment status "appear to be genuine." A new hire whose employment authorization is temporary should be reminded of his or her responsibility to present a copy of the new employment authorization on the date that the current authorization expires. HR should send that reminder prior to the expiration date and follow up with the employee again on the expiration date.

    No-match letters also require a specific response: Employers must determine if the discrepancy was caused by a clerical error. If it was not, the employer must request that the employee confirm that his or her Social Security number--or other information in certain cases when the no-match letter originates from ICE--matches the employer's records. If it does not, the employer should inform the employee to resolve the issue directly with the SSA within 90 days.

    If and when the DHS' new guidelines take effect, employers must comply. "It is only a matter of time before the nomatch regulations become effective in their present form or in a similar form," explains Stras. "Employers should follow the no-match regulations even though [the rules] may be in limbo, because they represent the best available guidance for a company to protect itself."

  • Keep verification consistent with overall HR policy. "Rather than looking at global migration as yet another piecemeal legal issue, organizations should address global migration and labor compliance issues as part of an integrated governance, risk management and compliance approach," advises Scott Mitchell, chairman and chief executive officer of the Open Compliance & Ethics Group (OCEG) in Phoenix. OCEG is a nonprofit organization dedicated to helping organizations achieve principled performance through a more effective and holistic approach to corporate governance, risk management and regulatory compliance. According to the organization, if a new hire or a longer-term employee needs to be fired to comply with IRCA, that process should be carried out in accordance with company guidelines.

  • Weave I-9 compliance into due diligence. Mergers and acquisitions present a potential compliance risk to the acquiring company--and an increasingly common motivation for companies to seek I-9 audits from external legal and compliance firms. "In acquisitions, companies can inherit the illegal workers of the prior owners," says Stras. "This can be due to sloppiness in I-9 procedures or ignorance of our immigration laws. … Any acquisition is a good time for housecleaning and to clean up all of the I-9s." HR executives and managers should perform similar, if less involved, due diligence before merging or joining a new company, particularly if that company operates in an industry that frequently encounters problems with the hiring of unauthorized workers.

  • Don't discriminate. Any I-9 audit, in which employees fill out the form again, should be equitably and consistently applied. "It is important to ‘re-I-9' the entire workforce and not choose any certain workers … so as not to discriminate," says Stras.

It's also important to avoid overreacting to I-9 compliance requirements. "If you get too overzealous about what I-9 laws are supposed to do, then you can discriminate," notes Mark Toth, chief legal officer for Manpower North America and a former employment lawyer in private practice, who has covered I-9 compliance issues in his blog.

HR professionals can help employees with temporary work authorization to understand and work through the steps necessary to gain permanent employment authorization.

However, treating a high-level, long-term employee who is found to be an illegal immigrant differently from a new hire may leave an employer open to a discrimination charge."The problem is that people see those two situations as different when, legally, they are not," says Toth.

Eric Krell is a freelance writer based in Austin, Texas.

Web Extras

SHRM article:
DHS Again Barred from Enforcing SSN 'No-Match' Rule (HR News) 

SHRM article:
Expert: Audit To Ensure I-9 Compliance 

SHRM toolkit:
I-9 Form and Illegal Workers (SHRM Online Compensation & Benefits Focus Area)

Safe-Harbor Procedures for Employers Who Receive a No-Match Letter Regulation (U.S. Immigration and Customs Enforcement)


SHRM video:
Victor Cerda, former chief of staff for U.S. Immigration and Customs Enforcement, on the increased penalties employers face for hiring illegal immigrants

Dotting Your I-9s

Despite its occasionally emotional and complex ramifications, the process of verifying employment eligibility should be straightforward and relatively routine.

HR managers normally are responsible for ensuring that an I-9 form, the federal document aimed at verifying employment eligibility under the Immigration Reform and Control Act of 1986, is completed by all new employees.

That process includes examining one or two identification documents listed on the I-9 form and making sure the documents appear authentic and related to the person presenting them. Employers must complete the form within three days after a new employee starts work.

The process can break down, according to immigration lawyers, when HR executives are either unfamiliar with or careless about following the requirements, or when they try to do too much to prevent the company from hiring undocumented workers.

“The I-9 process is a rock-and-a-hardplace problem for HR staff,” explains attorney Cletus Weber, co-founder and partner of Peng & Weber, a U.S. immigration law firm based in Mercer Island, Wash. “Too passive an effort can lead to punishment for noncompliance, but too aggressive an effort can lead to discrimination claims.”

Weber suggests that HR professionals responsible for verifying employment eligibility keep the following five points in mind when they design and execute their I-9 processes:

  • Don’t insist on a specific document, such as a U.S. passport. Instead, rely on the lists of acceptable documents on page 3 of the I-9 form.
  • Create reminders to reverify documents of workers who have only temporary work status.
  • Avoid the temptation to use the I-9 process to terminate or threaten employees who should be disciplined for other reasons (e.g., poor performance).
  • Responses to “no-match” letters from the Social Security Administration or from U.S. Immigration and Customs Enforcement should be treated the same as the I-9 process itself: Do no less and no more than required, and be careful to complete the steps uniformly for all employees involved.
  • Absent actual or “constructive” (i.e., implied) knowledge that documents are fake or belong to another person, the general issue is not whether the employee or applicant is actually authorized to work, but whether the employer has reasonably complied with the I-9 rules.

The Cost of Noncompliance

U.S. Immigration and Customs Enforcement views noncompliant employers as a “key component of the illicit support that enables illegal immigration to flourish,” and has not been coy about its intention to aggressively enforce the Immigration Reform and Control Act of 1986. Part of that enforcement includes fines. Criminal penalties for employers, and their managers, who violate the law include fines of up to $3,000 per unauthorized worker and jail time of up to six months. Civil penalties may vary.

  • First offense: $275 to $2,200 per unauthorized worker.
  • Second offense: $2,200 to $5,500 per unauthorized worker.
  • More than two offenses: $3,300 to $11,000 per unauthorizedworker.

Additional fines of up to $1,100 per unauthorized worker can be imposed on employers under certain conditions. The amount of the penalty is determined in consideration of several factors, including the following:

  • Size of the business.
  • Good faith of the employer.
  • Seriousness of the violation.
  • History of previous violations by the employer.


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