Arizona snapshot indicates increased odds for September ICE Investigations. Are you gambling with compliance?

[Editor’s Note: today’s blog is courtesy of Dawn Lurie and Kevin Lashus of Greenberg Traurig]

Interestingly, Immigration and Customs Enforcement’s (ICE) Office of Investigations (OI) in Arizona released a snap-shot of its weekly operations.  It is clear that politics played a significant role in prompting the release of this snap-shot, considering the amount of scrutiny Arizona’s SB1070 has undergone in the past couple of weeks and with mid-term elections two months away.  Regardless of ICE’s motives, the report provides evidence of the increasing worksite enforcement activity affecting employers.  This should not come as a surprise to anyone who has been following our postings and Alerts.

OI has twenty-six Special Agents in Charge (SACs) at its principal field offices throughout the United States.  These offices are responsible for the administration and management of all investigative and enforcement activities within the geographic boundaries of the office.  The Arizona snap-shot of the enforcement activity in one Area of Responsibility (AOR) provides insight into the kind of activity being experienced in other AORs throughout the country.

The Arizona report definitely supports the proposition that ICE is aggressively executing its mission.  Administrative and criminal investigations have resulted in significant numbers of successful criminal prosecutions, civil monetary penalties, administrative arrests, and civil forfeitures.

But what employers should be focused on are the details of the report that relate to OI’s worksite enforcement, and how those statistics may be interpreted alongside the 25 additional offices in the country to provide a clearer picture of audit activity and stepped-up administrative efforts.

ICE audited 59 Arizona businesses, resulting in the inspection of 21,587 Forms I-9.  Of the 21,587 Forms I-9 inspected, agents determined that 2,177 employees presented “Suspect Documents.” Twenty-five businesses were served a Warning Notice and 23 were served a Notice of Compliance based upon the results of the Form I-9 audits.  ICE is currently preparing several Notices of Intent to Fine for other business[es] audited in FY10.  In FY09, ICE fined six Arizona companies with fine notices totaling more than $270,000.

Some may be questioning whether the snap-shot is representative of national trends: we are of the opinion that it is.  At our meetings last week, ICE reported fine assessments greater than $4M against 164 employers throughout the country, and noted that 147 employers have been criminally convicted or cited with worksite violations during the calendar year.  With increases to the forensic auditor core and a new centralized Auditing Center opening up to assist with administrative reviews, ICE is poised to increase administrative investigations in an effort to continue to remind employers that the culture of compliance is something to take very seriously.

The recent statistics are certainly impressive, but we are still willing to wager that the agency will issue another round of Notices of Inspection (NOI) to employers in the next month or so. The SACs with larger resources will certainly be held responsible for more of these anticipated audits; we guesstimate another 500 to 750 audits will be announced.  The number of NOIs may exceed 2,300 by the end of 2010.  Companies located in the larger SAC jurisdictions including Atlanta, New York, Washington DC, Chicago, Dallas, Houston, Los Angeles, Phoenix and San Francisco are among the favored for the clusters in numbers.   While the metrics for audit selection are not disclosed, ICE appears not to be discriminatory and clearly each SAC has a generous amount of latitude both in selecting companies for audits as well as for settlements.  Generally investigations are based on leads, targets and other factors.  The required number of audits for each SAC will vary with the size of the AOR, the number of auditors assigned to the SAC and those internal guidelines that ICE utilizes.  No quotas, of course, but reports are publiced within the agency and “stats” are reviewed, need we say more? While we also have plenty of ideas on those metrics, we can not really comment further.

Folks, to be clear, this was not discussed during the IMAGE conference last week. But alas, we are not true psychics- fair warning was given to companies by Senior Special Agent Todd Johnson and other ICE Representatives: take action, review your I-9 related compliance and institute a compliance plan NOW. Taking such corrective action after ICE serves an NOI just doesn’t count as much.

What was not discussed during last week’s meetings with ICE, but what is identified in the snap-shot, is the number of “Suspect Documents” identified during the inspections—2,177 out of the 21,587 Forms I-9 inspected.  “Suspect Documents” is a phrase that relates to the number of employees who have presented documents to employers that cannot be verified by the government without further review; often, fraudulent documents are in play.  Upon receipt of Notice of Suspect Documents, employers are required to request alternative documents from the identified individuals, and if the issue cannot be resolved, they are referred to ICE. While a number of Suspect Documents issues can be resolved, the vast majority of workers receiving such notices are eventually terminated due to their inability to provide valid work authorization.  Based on very rough math, ICE Arizona has inspected employers with workforces that are almost 10% comprised of unauthorized individuals.

Now, some may argue that the number is already high and reflects the composition of a workforce in a border state.  That may be the case.  But, even if the average is closer to 5%, the most compliance-driven employers will have some exposure to “knowingly hire” and “continuing to employ” allegations.  What should employers do?  Be proactive.  At a minimum review and correct your I-9s before ICE does.  Go further, take the Arizona statistics seriously—implement standard operating procedures and training designed to improve immigration compliance, employ comprehensive identity and work eligibility verification mechanisms, and consider rolling-out verification compliance software as well, to establish a good faith defense.

Now is the time to consider implementing best practices.  Enforcement activity will continue to increase prior to the adoption of minor, let alone true, comprehensive reform.

Know the odds before you bet against them.

– See more at: http://www.lawlogix.com/blog/arizona-snapshot-indicates-increased-odds-september-ice-investigations-are-you-gambling#overlay-context=what-is-dream-act-and-who-are-dreamers