Rethinking Immigration: Time to End the IRCA Squeeze
[Editor’s Note: today’s blog is courtesy of Angelo Paparelli of Seyfarth Shaw LLP.]
With Republicans salivating at the prospect of capturing at least one chamber in Congress, and President Obama and the Democrats in (perhaps temporary) retreat, the time seems right to reflect on how much trouble our broken immigration system has caused both parties and the country. Repeatedly, on both sides of the partisan aisle, the hiring of an unauthorized foreign housekeeper, nanny or landscaper has waylaid or shaken a DC insider’s grand career plans.
Recall the famous who tripped on illegal immigration — Lou Dobbs, Timothy Geithner, Mitt Romney, Bernard Kerik, Zoe Baird, Kimba Wood and Linda Chavez. Now add to the list Meg Whitman, candidate for California governor. Her campaign has been polling negative ever since news broke that she employed an unauthorized housekeeper for nine years (perhaps with knowledge of the worker’s illegal status). Meg now cries what seem like crocodile tears over the legally necessary (”the law is the law”) deportation of the person she once described as a ”member of our extended family.” You don’t need an Andy-Warhol quarter-hour of fame, however, to be blind-sided by the immigration laws.
Even nondescript employers face serious problems because Congress structured the Immigration Reform and Control Act of 1986 (IRCA) badly from inception. IRCA took a police function — the identification of foreign citizens with no right to be in the country — and outsourced it to America’s seven million employers. At the same time (E-Verify notwithstanding), the government failed to establish a fraudproof system of issuing and verifying identity documents and work permits. Just as bad, Congress crafted IRCA to punish employers who take their deputization as junior G-men too seriously by illegally discriminating against workers who look or sound foreign. IRCA also proscribes “document abuse” — a violation (quite different from the act Christine O’Donnell decries) involving an employer’s demand to inspect more or different papers than those the employee chooses to present. Now the chickens are coming home to roost. With scant sense of regret or irony, the Obama administration — while proclaiming the need for Congress to grant legal status for the undocumented — has dramatically ramped up civil and criminal enforcement of the immigration laws against employers. At the same time, ICE maintains a trophy room of press releases on its website where the many employers taken down by IRCA are now mounted. Even if owners seek to sell their businesses, IRCA may scotch the deal. Just as “the Supreme Court follows the election returns,” buyers of businesses are fearing the anti-immigration tilt to the right by the electorate and Tea’d off candidates. Although M &A activity is generally on the rise, venture capitalists, private equity firms and other business buyers are increasingly demanding that sellers show clean hands on immigration compliance.
My latest New York Law Journal immigration column, co-authored with Ted Chiappari, “M & A Lawyers Beware: Immigration Risks Lurk in Your Next Deal,” reports on a new trend that will only put an extra IRCA squeeze on sellers. Taking a page from the strategy that ICE pressured Wal-Mart into demanding of its vendors, buyers are insisting that an independent third-party with subject-matter expertise, typically an immigration lawyer or firm, conduct a full IRCA compliance audit and report to the buyer any findings of immigration deficiencies and corrective measures taken.
As the NYLJ article notes: An independent immigration compliance audit would be helpful in flagging correctable errors that seller should cure before the closing, and in quantifying the potential fine range that ICE could impose (for which seller should indemnify buyer). An independent immigration audit might also reveal more serious violations, or could well trigger a loss of a significant cohort of the seller’s workforce if I-9 reverification is required and workers either fail to show up for work or are unwilling or unable to complete the current version of the I-9 form by providing acceptable documents of identity and employment eligibility of the worker’s choosing [thus resulting in “silent” ICE raids] . . . . Substantial potential exposure to fines and civil or criminal immigration penalties might make the deal less enticing to the buyer or might result in a negotiated reduction of the purchase price (or a clawback provision that allows the buyer to retrieve a portion of the purchase price if ICE [later] imposes monetary sanctions or the post-closing workforce proves insufficient to maintain the surviving entity’s business operations). None of these maneuvers would be necessary if Congress were to restructure the process of employment verification. Ideally, the government would no longer outsource the function but instead directly confirm every worker’s employment eligibility and communicate a positive result by a secure online system so the employer could safely hire the individual. Alternatively, it should enact a bill known as the New Employee Verification Act (NEVA) which would outsource the duty to verify employment eligibility to specially trained third-party firms and thereby immunize the employer from liability. Regrettably, this bill is NEVA gonna happen, unless Congress also clears the path to legal status for the 11 million undocumented persons in our midst. The current ICE strategy of triangulated IRCA squeezes and silent raids will only postpone that day of reckoning. The Obama Administration reportedly thinks that pushing ahead soon with comprehensive immigration reform (CIR) is a winning strategy that will put Republicans on the hotseat in 2012. Republicans, however, are raring for a fight to oppose CIR. Meantime, the flawed-from-the-start IRCA system of indirect and rebounding shots, better suited to a billiard table than a national stage, continues to torment law-abiding business owners who find it harder than ever to follow a broken immigration law.