Employment of Illegal Immigrants: How to Avoid Criminal and Civil Prosecutions

The prosecution of both illegal immigrants (charged with violating immigration laws) and executives of companies (charged with knowingly hiring illegal workers) are making front page headlines. In addition, legal employees are filing civil lawsuits against their employers alleging Racketeer Influenced and Corrupt Organizations Act ("RICO") violations for conspiring to keep wages low by hiring illegal workers. The frequency of these news reports has gained the attention of employers across the country who want to know how they can protect themselves against such charges and lawsuits and maintain a legal workforce. While Congress works on a solution to the growing illegal immigration problem, employers should be aware of their obligations under the law.

Criminal Prosecutions of Illegal Workers and Company Executives

The Immigration and Customs Enforcement bureau ("ICE") of the Department of Homeland Security has stepped up its efforts to enforce immigration laws by using undercover informants and conducting raids on unsuspecting companies to catch both workers who have entered our country illegally and employers who have knowingly hired illegal immigrants. Several news sources have reported on the arrests of both illegal immigrants and executives of companies who allegedly had knowledge of the workers' illegal status. In particular, there have been reports about the recent guilty pleas of five ex-IFCO executives for employing illegal workers. This followed a story by the Wall Street Journal discussing the facts of the case and highlighting the potential problems for employers across the country.

At the same time, employers are having great difficulty finding workers to perform unskilled labor and menial tasks at wage rates that are not much above the minimum wage. The pressures to find legal workers within a company's labor budget have led many employers to turn a blind eye to circumstances that may indicate the illegal status of workers.

Civil Lawsuits Filed by Legal Workers Against Their Employers

By contrast, employees who are legally eligible to work in the United States ("legal employees"), and who work side by side with illegal immigrants, often have a problem with the continued hiring of illegal workers. Indeed, they have begun to fight back. In a series of lawsuits, employees have sued their employers claiming that the employers knowingly hired illegal immigrants in order to keep wages low and unions out of the workplace.

In Mendoza v. Zirkle Fruit Co., a class of legal employees alleged that two employers and their labor recruiter artificially deflated wages by means of a scheme to hire illegal workers at very low wages. Specifically, the legal employees claim that these employers knowingly hired illegal immigrants in violation of immigration law. They claim they were direct victims of the alleged illegal conduct and suffered damages by way of lower wages. The trial court found that the alleged damages to the workers were indirect and too speculative, but the Ninth Circuit disagreed. Rather, the Ninth Circuit ruled that the legal employees could show they were direct victims of the alleged illegal conduct and that the alleged damages were plausible enough to survive a motion to dismiss. Back at the trial court level, this case has now been certified as a class action.

The Second, Sixth, Ninth and Eleventh Circuit Courts of Appeals have all allowed such lawsuits to proceed with class actions claims alleging the employers knowingly hired illegal immigrants in violation of immigration law. These employees claim they were direct victims of the alleged illegal conduct and suffered damages by way of lower wages. Nonetheless, the task of proving these damages at trial is expected to be extremely difficult.

Only the Seventh Circuit, to date, has dismissed such allegations on the basis that the damages are too speculative and the harm to the legal employees was indirect. In Baker v. IBP Inc., union-represented, legal employees alleged that their employer and a labor recruiter operated a scheme to hire illegal workers who presented false documents. Unlike the cases noted above, however, the Seventh Circuit dismissed this case on several grounds. The grounds for dismissal included that the union, which bargained with the employer about wages, and was found to be an indispensable party, was not sued by the employees. Furthermore, the employer and the recruiter did not have a shared purpose sufficient to allege a RICO claim. In addition, the Court found that the legal employees' alleged damages were too speculative.

As result of these criminal prosecutions and civil lawsuits against employers, it is important for every employer to understand their obligations under immigration laws.

Accurate and Timely Completion of I-9 Forms

The U.S. Citizenship and Immigration Service ("CIS"), formerly known as the U.S. Immigration and Naturalization Service ("INS"), requires employers to complete a Form I-9 for each individual they hire for employment within three working days of the new employee's employment. The employer must verify the individual's employment eligibility by identifying documents presented by the employee and recording the document information on the Form I-9. The form must be fully completed, dated and signed by a both the worker and a designated representative of the employer. Where a translator is needed, the translator must also sign the document. A photocopy of the documents relied upon to verify employment eligibility should be attached to the Form I-9 and placed in the employee's file — of course it is critical that the documents relied upon and copied are acceptable documents. For instance, while a certified, government-issued birth certificate is a valid document for I-9 purposes, a hospital-issued birth certificate is not. As a result, if a hospital-issued birth certificate is relied on, the I-9 form is invalid. Form I-9 must be kept by the employer either for three years after the date of hire or for one year after employment is terminated, whichever is later. The form must be available for inspection by authorized U.S. Government officials.

Employers are encouraged to review their employment eligibility procedures to make sure that they have taken the proper steps to verify employee eligibility to work. In completing this task and on application forms, employers may not question a new employee's citizenship. They may only ask whether the individual is legally authorized to work in the United States. An individual who provides the appropriate paperwork, as listed on the Form I-9, is presumed to be authorized to work in the United States.

Responses to Social Security No-Match Letters

The Social Security Administration ("SSA") has also gotten involved in the efforts to enforce immigration laws. When employers send in Social Security payments for their workers and the numbers do not match the Social Security numbers maintained by the SSA, a "no-match" letter is sent out to the employer requesting the employer to verify that they have sent the SSA the correct Social Security number as provided by the worker. The employers are warned not to take adverse action against these employees, but to only verify that the information they have provided to the SSA is accurate based upon information obtained from the employee. However, employers must be careful that their receipt of the "no-match" letter does not provide them with constructive knowledge that employees are not authorized to work in the United States.

It is not entirely clear what steps an employer must take in response to a "no-match" letter. Proposed regulations issued in June 2006 provide employers with guidelines which, if followed, would provide the employer with a "safe harbor." To obtain this "safe harbor" an employer would first review its files to confirm that the no-match is not the result of a clerical error. Assuming no clerical error, the employer would tell the employee that she must resolve the issued with the SSA. If the employee does not do so, the employer would have to obtain a new Form I-9 for which the employee provides a photo I.D. and does not rely on the Social Security number that was the subject of the no-match. All of these steps would have to be taken within a set period of time and new information provided would have to verified. Of course, because the regulations setting forth the "safe harbor" have not been finalized, these steps are not yet required. However, allowing them should give employers some comfort that their response to the "no-match" is reasonable.

What to do when an Employer has Suspicions of Illegal Status

As a result of the widespread crackdown on illegal immigration, and the criminal prosecutions and civil lawsuits that have been filed, it has become apparent that a growing percentage of unskilled workers are illegal immigrants and that they have presented forged documents or have taken on someone else's identity in order to obtain employment in the United States. With the sophisticated technology available today, it is difficult for employers to determine whether the paperwork they are given by new employees to verify their eligibility to work in the United States, is authentic or a fake. There are, however, several clues that may indicate that the documentation presented to verify employment eligibility has been stolen, is forged or is fake.

For example, where an employer may receive a call or letter indicating that a worker is using someone else's identity; where the name on the green card or Social Security card does not match the name of the worker given to the company or used by others at the jobsite; where the picture on the document does not resemble the individual who presented it; the worker may have been seen tearing up W-2 forms; or where the worker may admit to a co-worker or supervisor that he is not a legal immigrant. In such cases, the employer should conduct a prompt and thorough investigation. The investigation should be documented. If the results of the investigation demonstrate that the paperwork submitted to verify employment eligibility is unauthentic, the employee should be terminated for failure to produce evidence that he/she is legally authorized to work. This determination should only be made when the overwhelming evidence supports the conclusion. When the investigation is inconclusive, the employer should continue to employ the worker until further evidence suggests otherwise, so as to avoid a discrimination claim. In addition, all employers should make it clear to recruiters not to provide any illegal workers. This clarification should be put in writing and repeated on a yearly basis.


Schiff Hardin On The Road (Upcoming Speaking Engagements)

Catherine Hobart Thompson, "Immigration Law for the Construction Industry," Atlanta Electrical Contractors Association, Atlanta, Ga. (May 3, 2007)


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