The U.S. Department of Homeland Security and U.S. Immigration and Customers Enforcement (ICE) are cracking down on employers who fail to maintain current employee right-to-work records. They are primarily looking for completed and correct I-9 forms with backup documentation along with E-Verify records. Arizona employers are especially at risk.

Gone are the days when illegal employees were whisked off to deportation while employers escaped consequences. The potential penalties for willfully employing undocumented workers or even just not keeping up with the paperwork are severe; they include fines and, in some cases, criminal prosecution. Civil fines for inadequate documentation reportedly range from $110 to $1,100 per undocumented or improperly documented employee. Criminal fines can be much more severe and are computed to severely punish the business.

What can you do to prevent non-compliance?

• First, audit your records to make sure that every employee is properly documented. Confirm that you have I-9 forms for every current employee and, to the extent possible, former employees. Verify that you have correctly and completely filled-out and signed forms and that you have copies of all backup documents.

• Also, go over the necessary forms and instructions with your administrative staff to make sure they know how to complete the forms. Stress the importance of creating and maintaining documentation. Make sure that the information is properly safeguarded and securely backed up.

• Finally, repeat both of the above steps on a regular schedule. Set up a system of audits and training. How often? That depends on the circumstances, such as the number of employees, the nature of your business, administrative staff turnaround, and significant events such as a recent purchase, merger or sale of the business.

The federal government targets two main issues when it audits employers for compliance: (a) proper documentation to prevent undocumented workers and (b) discrimination (intentional or not) against alien workers (documented or undocumented).

That's right: Employers can unwittingly run afoul of the law by being overzealous in protecting themselves from hiring undocumented workers! Remember that businesses cannot discriminate against anyone on the basis of nationality, and foreign citizens can work legally in the U.S. if they are properly documented. That means that employers cannot limit job searches and advertisement to U.S. citizens, nor can they deny employment simply because a potential employee is a foreign citizen.

If you think you can avoid liability by simply categorizing all employees as independent contractors, think again. Many employers make the disastrous mistake of wrongly categorizing workers as independent contractors when they are actually employees. Likewise, sending illegal employees to a staffing agency and then re-hiring them may be used as an indication of intentional criminal conduct and could have severe consequences to the business and its managers.

This is a complicated area and should not be attempted without caution, education and professional advice.

Do you have questions about employee loans or compensation issues? Schedule a planning meeting with Phil Glasscock by calling 480-941-4359, or email jpg@jpglaw.com.