The U.S. Immigration and Customs Enforcement is pressing ahead with its I-9 inspection campaign. Last week, 180 companies in five states got inspection notices from ICE — the first employers to be targeted in 2010.

The most recent targets are in the states of Alabama, Arkansas, Louisiana, Mississippi and Tennessee. ICE had already done some 1,600 inspections in the second half of 2009 and issued fines ranging from $100 to $1,100 per violation. A Notice of Inspection requires employers to allow ICE to inspect their I-9 forms to determine compliance with the law.

ICE released a statement warning that the inspections are “a first step in ICE’s long-term strategy to address and deter illegal employment.”

Companies that receive a Notice of Inspection will have three days to prepare for a meeting with federal officials in which the company’s Form I-9 records will be reviewed, possibly including payroll documentation.

The Social Security Administration.

According to an internal audit, the SSA, which runs E-Verify, failed to run checks on its own employees 20% of the time in the past two years. Also, about half the checks that were done weren’t finished in a timely manner, the Washington Times reports.

When companies sign up for E-Verify, they’re required to use the system for all new hires and begin the process within three days after the hire date.

Some critics have used the SSA audit’s findings to argue that the system is impractical in its current form.

What do you think? Do you use E-Verify? Does SSA have an excuse for not following the requirements? Let us know in the comments section below.

Richard Rosenbaum pleaded guilty to charges of conspiring to defraud the U.S. and harboring illegal aliens, who were hired at his maintenance-services company.

A federal investigation in Michigan had revealed that Rosenbaum’s company had hired hundreds of illegal aliens and paid them in cash – thereby avoiding paying the government employment taxes, Social Security and Medicare. According to the feds, the company had cheated the IRS out of more than $16 million.

Rosenbaum appealed the stiff sentence, citing his lack of a prior criminal record and his cooperation in the government’s investigation.

But the judge was unmoved. Rosenbaum’s cooperation wasn’t all that substantial, the court said, and it didn’t begin until a co-defendant turned informant. The sentence was within federal guidelines, the judge added.

Cite: U.S. v. Rosenbaum

The feds haven’t finished the first massive I-9 audit, and they’ve already announced a new round — this time targeting 1,000 employers.

Last week, Immigration and Customs Enforcement (ICE) sent notices of inspection (NOIs) to 1,000 businesses, alerting them that feds want to look at their I-9 records.

The agency described the audits as part of its strategy to crack down on employers’ hiring and recordkeeping practices. The increased enforcement started in July with 650 audits. ICE announced at the time that more would be coming soon.

About half of those 650 audits have been completed, and a lot of fines have been dished out so far, with 61 employers paying a total of $2.3 million so far. ICE classified 16% of all inspected I-9s as “suspect,” and 267 employers are still scheduled for audits.

New system for fines

The agency also explained its new system for assessing fines. Penalties used to be based on five factors: business size, good faith, seriousness, employment of unauthorized aliens, and history of compliance. Instead, ICE will now consider:

1. whether the employer knowingly hired illegals or committed a paperwork violation
2. prior offenses
3. the percentage of total reviewed I-9s that have violations, and
4. other factors such as business size, good faith, seriousness, employment of unauthorized aliens, and history.

Employers can be fined up to $1,000 for the first offense, or $2,500 for a knowing violation. For detailed tables showing how ICE calculates the fines, click here.

What HR can do

The best way to avoid fines: Don’t wait for the feds to come knocking. Experts recommend companies conduct their own internal I-9 audit at least once a year.

When an audit does occur, it’s critical for all forms to be properly stored and maintained — when a company gets an NOI, HR is required to turn over all I-9s within three business days. Keep the forms together in a dedicated drawer or binder, and don’t save I-9s for longer than you have to (according to federal law, you need to keep them for three years or one year after the employee’s termination, whichever is longer).

Also keep in mind:

1. Respond quickly to an NOI, even if it’s just to ask ICE for a time extension
2. Notify all employees and managers who handle I-9s
3. Choose one person to correspond with ICE to avoid inconsistency in the information given, and
4. Secure all records — ICE may view missing forms as an attempt to destroy evidence.

In addition to extending the controversial program for three years, Congress reaffirmed its support by approving $137 million for the system — which allows employers to check on the citizenship status and work eligibility of applicants. Congress retained the stipulation that the program be voluntary for private employers who don’t have federal contracts.

The bill now heads to President Obama, who’s expected to sign it into law.

The U.S. Chamber of Commerce joined forces with the National Association of Manufacturers, among others, to lobby Congress to vote the program out of existence. The C of C and NAM contend the system is rife with errors that result in denials of eligibility for workers who here legally.

The U.S. Department of Homeland Security presented figures on Capitol Hill indicating the system has a 94% accuracy rate, and that was good enough to override C of C and NAM concerns. Further, some state Chamber of Commerce offices, such as in South Carolina,  have endorsed the system and led the way for passage of state laws that make the system mandatory.

The Department of Homeland Security (DHS) announced the so-called ‘no-match’ rules (which told employers what to do if the Social Security number provided by a new hire didn’t match the number in the feds’ database) in 2007. Controversy and legal battles have prevented the rule from ever going into effect.

Now, it’s officially off the books. A regulation was published in the Federal Register on October 7 rescinding the rule.

The DHS announced it will focus on promoting the use of E-Verify as the mechanism for preventing the employment of illegal immigrants.

1. National – Federal contractors doing work for more than 120 days with a value of over $100,000, and subcontractors providing goods and services worth more than $3,000 (read more on these requirements here).
2. Arizona – All employers.
3. Arkansas – State contractors.
4. Colorado – State contractors.
5. Florida – State contractors.
6. Georgia –All public employers, contractors and subcontractors.
7. Idaho – State agencies.
8. Minnesota — All hiring authorities within the executive branch of state government, and employers seeking to enter into a state contract worth more than $50,000.
9. Mississippi — All companies with at least 100 employees. By July 1, 2010, companies with 30-99 employees must comply, and the rest by July 1, 2011.
10. Missouri — All public employers.
11. Nebraska — All state employers and contractors. Also, use of E-Verify is required for private employers who request state tax incentives.
12. North Carolina — All state agencies, offices and universities.
13. Oklahoma — Public employers, contractors and subcontractors.
14. Rhode Island — Executive agencies, and companies doing business with the state, including grantees, contractors, subcontractors and vendors.
15. South Carolina — Employers must use E-Verify, or verify that an employee has a valid S.C. driver’s license or I.D. (or one from a state with similar standards). All companies must comply by January 1, 2010.
16. Utah — Public employers, contractors and subcontractors.

The new E-Verify rule for federal contractors has a lot of employers wondering exactly who’s covered by the requirement — and what they have to do now.

To clear up some of the confusion, U.S. Citizenship and Immigration Services (USCIS) has published answers to a few of HR’s most common questions about federal contractors and E-Verify:

1. Who’s affected by the rule?

Companies will be required to use E-Verify when they enter into federal contracts with a work period of longer than 120 days and a value of more than $100,000. Also, subcontractors are covered by the rule when the prime contract meets those requirements and the subcontract is for services or construction with a value over $3,000.

2. Which employees must be verified?

Covered contractors are required to verify all new hires, as well as any existing employees assigned to the government contract. That includes employees who perform “substantial duties” under the contract, as opposed to those performing overhead or support work.

3. When do we have to enroll?

The rule went into effect on September 8. Any applicable federal contract signed after that date must include an “E-Verify clause” that requires contractors to use the system.

Companies not already signed up for E-Verify have to enroll within 30 days of being awarded the contract and must begin verifying new hires and current employees working on the contract within 90 days.

Of course, companies can sign up whenever they want, so current or prospective federal contractors might as well enroll before they’re required to.

When you enroll, choose “federal contractor” when asked, “Which category best describes your organization?”

4. What if we already have a government contract?

You won’t be required to sign up for E-Verify until you sign a new contract that contains the E-Verify clause.

5. We already enrolled in E-Verify, but not as a contractor? Do we have to re-enroll?

No, but if you aren’t enrolled as a federal contractor, you will need to update your company profile to categorize your company as a contractor.

For more information from USCIS, click here.

As is always the case when a new form is issued, there’s some confusion over what’s being asked of employers. This time, though, things are relatively simple.

U.S. Citizenship and Immigration Services (USCIS) recently posted the new version on its Web site. The previous form was scheduled to expire in June, before USCIS extended the date to August 31. The new I-9 is good until August 31, 2012.

What’s new? Nothing at all, in fact.

The form is the same as the old one, with the exception of the expiration and revision dates (The new version is dated 08/07/09 at the bottom right corner, compared to 02/02/09 for the old form.)

Better yet: HR is allowed to use either version of the form. However, some experts recommend always using the newest revision — whether it’s required or not — to avoid confusion.

You can the latest Form I-9 from USCIS’s Web site here.

For more than a year, some members of the government have been trying to make E-Verify mandatory for federal contractors (President Bush signed the first order in June 2008). But the effective date of the rule has been consistently pushed back, as business groups challenged the requirement.

For now, it looks like the most recently announced effective date of September 8 will stand.

A coalition led by the Chamber of Commerce sued to have the rule stopped permanently, but a federal court recently threw out the case.

The suit argued that Congresses authorized E-Verify as a voluntary program. But the court ruled that the requirement only affects businesses that enter into contracts with the government, which is a “voluntary choice.”