ARTICLE: 23 October 2017

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The High Price that Companies Face for Non-compliance with US Immigration Law
Written by Nita.icole Upadhye

You’re a UK business owner who just won a long-term contract in Los Angeles worth several million dollars, requiring you and your small team of highly skilled employees to move to the US to work closely with the new client.

You register a CA business entity and set up a small serviced office. The client has a strict deadline, so you sent your employees to the US as visitors, without exploring work visa options. You get the employees to the US quickly, making the client happy. The work is going well until one day you receive a knock on the door. It’s a USCIS officer making an unannounced visit, asking you to for copies of work visas and I-9 forms for all employees in the US. You are unable to provide this and are found guilty of fraud and abuse of US immigration law. You have to pay significant fines and send all employees back to the UK immediately. The client does not want to be associated with a company who violates the law, so they end their contract, resulting in the loss of millions of dollars of business for your company.

This unhappy scenario illustrates the result of a failure to follow immigration regulations. Companies that employ foreign nationals in the US have always faced potential penalties for non-compliance with US immigration laws, but the Trump administration’s well-publicized immigration reform efforts have resulted in far more entry denials, visa denials and random site visits than ever before.

I. Areas of Common Non-compliance and Potential Penalties
Non-compliance carries significant consequences for the employer and even inadvertent and unintentional violations can result in costly penalties for a business that fails to comply with the detailed requirements. There are a few key areas where enforcement has been stepped up.

A. Form I-9: Employment Eligibility Verification
Under the Immigration and Nationality Act, Section 274A, employers must have an I-9 Form on file for every employee, whether a US citizen, green card resident or holder of a non-immigrant work permit. Along with the form, there must also be supporting documents to verify the employee’s identity and immigration status. https://www.uscis.gov/i-9

Examples of non-compliance that carry civil penalties include:
• Knowingly recruiting or hiring an unauthorized alien for employment
• Failing to verify an employee’s identity stated on the 1-9 Form with supporting documents
• Failing to notify the Department of Homeland Security that an employee is ineligible for employment
• Filling out the form incorrectly or omitting information

Penalties
Civil penalties for non-compliance were recently increased dramatically, to almost double the previous amounts. This change came at the same time a new I-9 Form was introduced, placing a much higher burden on employers and HR departments to correctly document their workers.

Simple mistakes on the I-9 Form can now bring a penalty between $216 and $2156. This is not an uncommon event as the immigration agencies report that as many as three-fourths of I-9 Forms contain mistakes, and penalties can be levied for each mistake on a form, even if it is the same mistake on multiple forms.

The penalties for the non-compliance examples listed above now range between $539 and $4313 for first offenses, and third offenses and above bring a fine of $6469 to $21,563 per unauthorized worker. While this may seem harsh, employers also need to know that Immigration and Customs Enforcement (ICE) has changed its rules, and there is no longer any distinction between technical and intentional violations when it comes to the amount of the penalty.

For example, one company was fined over $600,000 simply for failing to have the I-9 forms signed at the time they were completed. More significantly, on October 6, 2017, ICE levied a penalty against a company with long-time fraudulent hiring practices in the amount of $15 million plus a forfeiture of $80 million, the largest I-9 penalty in history. These penalties should catch the attention of any company considering skirting US immigration laws.

Criminal penalties may also be brought if an employer engages in a practice of recruiting or referring unauthorized aliens for a fee, and in addition to fines this can bring 5 years or more in federal prison. In extreme cases, a company could also lose its business license and permission to operate in the US.

B. H1B /L-1 Work Visas
The H1B non-immigrant work visa is undergoing reform at an administrative level, and there is a greater likelihood of site visits for companies that employ a high percentage of H1B visa workers. The new, unstated policy toward the H1B program seems to be toward limiting the number of work visas, and preventing low-cost foreign workers from replacing US citizens.

The main area of compliance review is the actual work location of the employee, and if it matches the stated location on the H1B petition. This is designed to prevent shuffling employees around or sub-contracting with other companies, a common practice with outsourcing companies in the IT sector.

The other area of review is documentation that the worker’s education and experience match their current position, to prevent hiring of unqualified applicants or switching their jobs. As a case in point, the USCIS recently issued a rule change that will prevent entry-level computer programmers from obtaining H1B visas, to encourage more qualified applicants at higher wage levels.

This is also true for L-1 visa holders that have been transferred to the US as executives, managers or technical specialists. For reasons that the USCIS won’t divulge, L-1 visas have been specifically targeted in work site visits to prevent abuse of this work permission.

Violations and Penalties
Violations of the H1B and L-1 visa requirements can include:

• Inaccurate work site locations
• Fraudulent or false supporting documents
• Wages paid below the prevailing wage for the work location
• “Benching” workers without pay as promised
• Employer not actually “doing business” in the US (L-1)

The penalty for violations of work visa rules can range from a business being barred from the visa program for five years, fines and in cases of fraud, jail time. The worker or course can be deported, forfeiting the visa fee which can be as much as $10,000.

C. Misuse of US Business Visas under Visa Waiver Program
There is another emerging immigration pitfall for companies that bring foreign employees to the US. The US, along with many other countries, is cracking down on companies that misuse business visas as one way to circumvent the arduous and expensive work permit process. A citizen of any country that is within the US Visa Waiver program can obtain a three-month business visa which is designed for short term visits rather than actual employment activity in the United States.

This is an attractive and useful option for conferences, meetings, project development, marketing or sales visits to the United States, but some companies have relied on the business visa for “stealth” employee work assignments. This practice may have been successful in the past, but now business visitors will be under greater scrutiny, especially if they have entered the US on multiple business visas in the recent past.
Consistent overuse of business visas could result in employees being barred entry at the border, or even restrictions on business activity for the company.

II. Worksite Visits
One very real possibility for any employer with foreign nationals on their payroll is a work site visit or inspection to verify employee documentation and immigration status. In some cases, immigration authorities will give a business three days notice prior to an inspection, but surprise, unannounced worksite visits are being stepped up to verify all employees I-9 information, as well as supporting documents for H1B and L-1work visas.

A worksite visit by ICE is far from a formality, and any business that employs foreign workers should have an audit plan in place to prepare for unexpected visits. Completed and signed I-9 forms should be on file and easily accessible, as well as copies of supporting documents. Conducting a self-audit is also recommended, to identify any problems with an I-9 or employee’s documents prior to an inspection.

If the site visit is unannounced, the business still has three days to supply the forms and documents if needed. Key management and legal staff should be contacted before any forms or documents are given to ICE, and savvy companies will have some protocol in place to handle the site visit. HR and support staff need to be trained to handle a surprise visit from ICE.

III. Conclusion
If your company employs foreign workers in the United States for brief periods of time for long-term transfers it is advised to carefully review your internal process for completing and verifying I-9 Forms and preparing for unexpected site visits. All employment-based visas (H-1B, L-1, E-2, O-1, etc.) should all be applied for and used in strict accordance with US immigration laws, to avoid penalties, fines and potential red flags for your business in the United States. For a free 10-minute immigration compliance assessment contact our office at info@nnuimmigration.com or +44 (0) 208 004 3492 to speak with one of our attorneys.

This posting does not constitute direct legal advice and is for informational purposes only.