Employers Prepare Themselves for the I-9 Squeeze

Two weeks ago, I was fortunate to speak on I-9 and immigration enforcement at the 30th Annual AILA California Chapter conference – a three-day event which provided critical immigration updates affecting individuals and employers across the US. On the business side, in particular, there was quite a lot to talk about including travel bans, recent policy changes in immigration adjudications, and yes, even the occasional tweet.

And along the way, one particularly pervasive theme quickly emerged: now, more than ever, employers are being squeezed from every side. The Trump Administration has made no secret of its intention to tighten immigration rules and ramp up enforcement at every level of the federal government. At the same time, however, employers are also seeing a significant increase in state immigration laws, some of which stand in direct opposition to the directives coming from the White House.

In today’s blog, we’ll discuss California’s Immigrant Worker Protection Act (AB 450), one of the most recent (and controversial) state laws enacted this year. I’m also pleased to include some expert thoughts and comments from my esteemed co-panelists at the AILA CA Chapter Conference – Chuck Miller of Miller Law Offices in Studio City, California, and Fausta Albi, a co-managing partner of Larrabee Albi Coker LLP in San Diego, California.

A National Enforcement Directive

To set the stage for AB 450 and other state laws, we need to first look at the current state of affairs for immigration compliance as a whole. Earlier this year, President Trump signed Executive Order 13788, entitled “Buy American and Hire American,” a broad directive which calls for the rigorous enforcement and administration of existing laws to protect the interests of US workers. And sure enough, the various federal agencies soon followed suit with a flurry of announcements on enforcement initiatives (primarily aimed at the H-1B visa program).

At the same time, Immigration and Customs Enforcement (ICE) has been making a big splash with their recent announcement of a $95M plea agreement in connection with immigration worksite violations as well as plans to quintuple the amount of time spent on employer audits.  “Just as in 1987 when the Form I-9 was first introduced, employers find themselves in a precarious state of affairs,” said Charles Miller of Miller Law Offices, in Studio City, California. “During the past few years, most of the attention has been on civil administration violations, but the worksite pendulum appears to be swinging back to more serious charges for immigration and Form I-9 violations.”

The States Take Notice

According to the National Conference of State Legislatures, lawmakers in 47 states enacted 133 laws and 195 resolutions relating to immigration in the first half of 2017 (which represents a 90% increase from the prior year). The legislation primarily covered budgetary authorization for immigration enforcement, immigrant integration, English language and citizenship classes, and migrant and refugee programs.

At least 36 states (and DC) also considered more than 100 bills concerning so-called “sanctuary policies” – a term applied to locales that limit cooperation with federal immigration authorities. Certain states (such as Georgia, Indiana, Mississippi, and Texas) enacted laws opposing sanctuary policies, whereas DC, Illinois, and California have gone the opposite route in supporting sanctuary practices.

While many of these new laws have garnered national attention, employers have been largely spared by state legislatures in connection with immigration or I-9 obligations…until now.

California’s Response – AB 450

On October 5, 2017, California Governor Jerry Brown signed into law the Immigrant Worker Protection Act (Assembly Bill 450 or AB 450 for short), a bill introduced by California Assembly Member David Chiu to protect workers from “disruptive workplace raids” (which Chiu and others believe will soon increase under the Trump Administration). Effective January 1, 2018, the law will impose several new obligations and requirements with respect to immigration and I-9 worksite enforcement actions – putting California once again in direct opposition with the Trump Administration’s directives.

“Employers have historically been in the very difficult position of complying with I-9 verification requirements while at the same time abiding by anti-discrimination rules which punish employers that go too far,” said Fausta Albi a co-managing partner of Larrabee Albi Coker LLP in San Diego. “During the last few years, California has been making this tenuous balancing act even more challenging by introducing a wide variety of laws such as AB 450 which attempt to protect immigrant workers and increase employer obligations. The end result is that employers may now find themselves deeply conflicted when ICE comes knocking at the door.”

In a nutshell, AB 450 regulates five broad areas relating to I-9 inspection practices and policies:

(1) Access to an employer’s place of business

(2) Access to an organization’s employee records

(3) Notice to employees of I-9 inspections

(4) Notice to employees of I-9 audit results

(5) Reverification of current employees

Before we dive into the details, it’s important to note that each one of these new provisions is preceded (in the legislative text) with an important caveat: “except as otherwise required by federal law” – the California’s legislature’s careful attempt to avoid any direct conflict with Form I-9 and E-Verify requirements. The problem, as described below, is that employers (and particularly HR managers) will now have the unenviable task of figuring out when exactly they are crossing the line in responding to a government inspection.

(1) Access to Employer Premises

The first prohibition implemented by AB 450 specifically notes that employers shall not provide voluntary consent to an immigration enforcement agent (e.g., an ICE or HSI officer) to enter any nonpublic areas of a place of labor unless the agent provides a judicial warrant. Designed to curb potentially disruptive worksite raids (or improper search and seizure), the law carries a pretty steep penalty for non-compliance: two thousand dollars ($2,000) up to five thousand dollars ($5,000) for a first violation and five thousand dollars ($5,000) up to ten thousand dollars ($10,000) for each subsequent violation.

There are, however, a couple of exceptions: (1) there will be no violation by the employer if a court later determines that the agent entered the nonpublic space without the employer’s consent and (2) the employer is permitted to take the agent to a nonpublic area where employees are not present for the purpose of verifying whether the agent has a judicial warrant (so long as consent is not provided to search the area during the process).

(2) Access to Employee Records

In a similar vein, AB 450 also prohibits employers from providing voluntary consent to an immigration enforcement agent to access, review, or obtain the employer’s employee records without a subpoena or judicial warrant, but with an important (and somewhat necessary) caveat. This provision does not apply to I-9s and other supporting documents for which a Notice of Inspection (NOI) has been provided to the employer. It’s also important to note that the law does not restrict or limit an employer’s compliance with the E-Verify MOU (which, among other things, obligates an employer to cooperate with DHS in their compliance monitoring and evaluation by turning over I-9s and other employment records).

While the net effect of this provision means that California employers will likely retain the right to turn over I-9 related documents in the event of a NOI or E-Verify desk review, the law is less clear with respect to other potential immigration investigations such as inspections by the USCIS’ Fraud Detection and National Security (FDNS) administrative site and verification unit.

The fines for non-compliance mirror the provision noted above: civil penalty of two thousand dollars ($2,000) up to five thousand dollars ($5,000) for a first violation and five thousand dollars ($5,000) up to ten thousand dollars ($10,000) for each subsequent violation.

(3) Notification of I-9 Inspections

One of the most burdensome elements of AB 450 concerns a new requirement relating to Form I-9 audit notices to employees (and their union representatives). Specifically, the law will require California employers to provide a notice to each current employee of any Form I-9 inspections within 72 hours of receiving the NOI. The notice must be posted in the language the employer normally uses to communicate employment-related information and contain the following:

  • The name of the immigration agency conducting the inspection
  • The date that the employer received the NOI
  • The nature of the inspection to the extent known
  • A copy of the NOI

The law directs the California Labor Commissioner to develop a template posting that employers may use to comply with these requirements on or before July 1, 2018. However, as Fausta Albi notes, “since the law goes into effect on January 1, 2018, California employers will need to be prepared to use their own template in the event they receive an I-9 inspection notice during the first half of the year.”

(4) Notification of I-9 Inspection Results

Under the new law, employers must also provide “affected employees” and their union representatives (if any) with a copy of the written immigration agency notice that details the inspection results along with any employer obligations imposed by the immigration agency within 72 hours of its receipt of such notice.  For purposes of this section, an “affected employee” is any individual identified by the agency as potentially lacking work authorization or whose work authorization documents appear to have deficiencies.

Based on this somewhat narrow scope, it appears that employers will only be obligated to notify employees who are mentioned in either a Notice of Suspect Documents or a Notice of Discrepancies (see this link for a description of each from the ICE I-9 inspection website). Accordingly, employers would likely not be required to notify employees who are named (or referenced) in the Notice of Technical or Procedural Failures  – the document which identifies all of those seemingly minor errors or omissions which must be corrected by the employer within 10 business days in order to avoid a fine.

It’s also important to note that the notice must only relate to the affected employee and should be delivered by hand at the workplace if possible and, if hand delivery is not possible, by mail and email, if the email address of the employee is known, and to the employee’s authorized representative.

An employer who fails to provide either of the notices discussed above is subject to a civil penalty of two thousand dollars ($2,000) up to five thousand dollars ($5,000) for a first violation and five thousand dollars ($5,000) up to ten thousand dollars ($10,000) for each subsequent violation. However, employers will not be fined if the immigration enforcement agency expressly and specifically directed them not to provide notice.

(5) Reverification of Current Employees

Last but not least, AB 450 seeks to minimize (and penalize) improper reverification of current employees (i.e., when not required by federal law). If this prohibition sounds familiar to you, there’s good reason for it. Federal law already prohibits these types of so-called “unfair documentary practices” under the antidiscrimination provisions of the Immigration and Nationality Act. California even tackled this issue last year in Senate Bill 1001, which in essence made unfair documentary practices a “fineable” offense under state law.

As we’ve described in the past, the rules relating to reverification can be confusing (and convoluted), but in essence employers are only permitted to reverify in five broad scenarios: (1) when an employee has expiring work authorization, (2) in connection with a federal contract with the FAR E-Verify clause, (3) when an employee comes forward with a new identity and basis of work authorization, (4) as part of an internal audit when an employee has not presented sufficient documentation, and (5) as part of a government audit which calls into question the work authorization of one or more employees.

Under this new law, employers who improperly reverify employees can face fines of up to ten thousand dollars ($10,000). It is worth noting, however, that an employer fined under this new section will not also be liable for the same violation under the provisions added by SB 1001.

Best Practices for HR

While AB 450 gained the support of several large labor groups during the course of its debate, many others have expressed concern regarding the impact on employers and human resource staff in particular. In a letter to the state Senate, the Society for Human Resource Management (SHRM) noted “[f]rom the human resource professional’s perspective, A.B. 450, while well-intentioned, will add a host of unnecessary burdensome requirements, create many logistical challenges, and could possibly force human resource professionals to decide between abiding by federal law or state law.”

In light of these potential challenges (and the increasing likelihood of Form I-9 audits), California employers are well advised to create (or update) their processes and procedures in connection with Form I-9 audits and compliance in general. Here are a few quick strategies worth considering:

(1) Audit Preparedness

Immigration attorneys recommend that employers develop a detailed audit readiness process which clearly specifies the steps which should be taken when an investigator shows up at your door step.  “We generally advise our clients to train employees at the front desk or receptionist area on how to handle audit requests,” said Fausta Albi. “An audit can be a particularly stressful occasion, and staff members may understandably want to be as accommodating as possible. Under this new law, however, employers can actually be penalized for being too helpful during the audit process.”

(2) Notice Preparation

In order to comply with AB 450’s audit notice requirements, employers should document the specific steps that will be taken when a NOI is received. As mentioned above, employers only have 72 hours to post the required notification (which must occur regardless of whether or not the employer ultimately receives an extension of time to respond to the audit). Employers should consider the best method for disseminating this information and be on the lookout for the official template from the Labor Commissioner’s website.

In addition, HR staff should also be aware of the “post-audit” notice requirements, including the obligation to notify affected employees within 72 hours of receiving the audit results while maintaining the confidentiality of the information. A Notice of Suspect Documents (in particular) may contain several employee names, so HR representatives may wish to consider redacting (or otherwise obscuring) the other names when providing the notice to affected employees.

(3) Reverification Training

As described above, AB 450 penalizes employers who go too far in reverifying their current workforce without proper justification. Improper reverification can lead to a host of potential issues (not only with California but also with the Department of Justice).

To minimize the risk of an improper (or even missed) reverification, employers should consider the following action items:

  • Make sure you clearly define who should be subject to reverification (following the rules outlined above)
  • Implement a reminder system to alert you of upcoming expirations which are occurring 90 to 120 days in the future so that you can properly inform your employees and give them time to provide you with updated documentation
  • Decide who will be responsible for actually performing the reverification and reviewing the original documents
  • If you’re using a well-designed electronic I-9 system, you can implement programmable email reminders (using the same time windows outlined above) and be assured that only eligible employees are queued up for reverification

If you need more information on Form I-9 compliance (and state laws impacting employer verification), please feel free to contact us here. You can also subscribe directly to this blog (and receive instant email notifications) by entering your email address in the following form.