Under President Barack Obama, U.S. Immigration and Customs Enforcement (ICE) began an initiative to enforce immigration law through employers. In 2009, ICE began conducting enforcement actions with 500 Notices of Inspection (NOI) to employers. This involves an audit of a company’s Form I-9s and related immigration policies and documentation. The numbers of NOIs issued to employers continue to increase; in 2012, ICE issued NOIs to 3,004 employers and collected more than $12 million in administrative fines. 

A NOI can create an administrative headache for retailers during the holiday season, when many in the industry are focused on their essential revenue period and tend to ramp up their hiring of seasonal employees. The size and composition of the retail workforce makes the industry a tempting target for ICE actions. Therefore, the industry should take a particularly careful look at its immigration compliance. To maintain a high level of compliance, employers should create immigration-risk-compliance policies to ensure a strong culture of compliance.

The cost of conducting an internal audit is miniscule compared to the financial sanction.

An internal audit and remediation of an entire company’s Form I-9s and immigration policies can cost as little as a few thousand dollars, depending on the size and complexity of the audit. Should ICE sanction an employer for failure to have strong immigration compliance, the cost of sanctions for deficiencies can be more than $1,000 per Form I-9. This has resulted in fines exceeding $1,000,000 in many cases, even where there is no demonstration of bad faith. Therefore, employers should consider the size of their workforce to estimate the potential sanction in deciding whether an immigration compliance review is worth the cost.

The financial sanction by ICE may be paltry compared to the practical effects of an investigation.

In addition to the potential financial sanction by ICE, retail employers face the complexity of retaining a workforce when ICE issues a NOI at a fulfillment facility, rather than at a retail location, as often is the case. Any stoppage of work or loss of employees could have dramatic effects on the company’s ability to supply its retail outlets or fulfill customer orders.

It is easy to lose attorney-client privilege.

When a client communicates with its attorney for the purpose of securing legal advice, the communication generally is protected under the attorney-client privilege. In conducting an internal audit, information can arise that should be protected by the privilege. In developing an immigration-compliance program and conducting an internal audit, not all communication with corporate counsel may be protected by the privilege, particularly when the communications are allowed to extend beyond the employer’s essential “control group.” Companies should approach immigration audits like other investigations, considering protec- tion under the attorney-client privilege.

Government agencies share Form I-9 data.

ICE shares information gained through I-9 audits with other government agencies pursuant to a memorandum of understanding (MOU). It will share information with such organizations as the Department of Labor (DOL), the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), the Equal Employment Opportunity Commission (EEOC) and the Office of the General Counsel of the National Labor Relations Board. They will even refer matters to each other and coordinate investigations, where appropriate. 

Engaging in an internal audit is easy.

Failure to review and remediate Form I-9s is fraught with risk for employers. Jackson Lewis typically sees a fail rate of approximately 50 percent of employers’ I-9s it has reviewed. ICE often will give employers substantial credit for engaging in an internal audit and remediating I-9s before a NOI is issued. We have helped hun- dreds of employers respond to NOIs, engage in preventive audits to remediate I-9s and develop strong immigration compliance cultures.

Retailers should consider how immigration compliance could be escalated as a priority in 2014. By addressing compliance, retailers can mitigate damage prior to the receipt of a NOI, minimize potential workforce disruptions, and alleviate concerns of immigration compliance leading to multi-agency investigations.