Employer Compliance & Enforcement 2019 in Retrospect – Where do We Go from Here?

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[co-author: Kate Christensen Mills]

This article is based on a recent presentation to the Association of Corporate Counsel’s Baltimore Chapter given by Jennifer Cory and Kate Christensen Mills.

It was the worst-case scenario for an employer. On Aug. 7, Immigration and Customs Enforcement officers descended on seven Mississippi food processing plants, detaining nearly 700 workers on suspicions of violating federal immigration law. It is believed to be the largest immigration sting ever conducted within a single state.

But while the size and scope of the Mississippi raids were shocking, they did not occur in a vacuum. The last two years have seen a significant increase in immigration law enforcement actions, as well as a greater emphasis on immigration compliance and a slowdown in processing worker visa applications. In fact, it can be said that the federal regulatory and enforcement client has shifted to a “Culture of No” at federal agencies under the Trump Administration, upending practices that had been in place for decades. In 2019, we saw more progress toward the following points that came out of the 2017 executive order toward:

  • Border Security—Employers are seeing a growing number of challenges for getting visas for employees. Vetting and security checks are taking longer, and this can be a real challenge for employers who are looking to bring in foreign workers.
  • Merit-Based Immigration—It is increasingly difficult to bring in highly skilled, highly paid workers through the H-1B visa program, and the Department of Justice is warning employers not to discriminate against American workers when hiring for these positions.
  • Interior EnforcementAs discussed in a recent Wall Street Journal article, US Immigration and Customs Enforcement worksite investigations have quadrupled under the Trump Administration.

Employers who depend on foreign-born workers also are struggling to comply with the federal government’s 2017 “Buy American/Hire American” mandate. Because unemployment is so low, it can be hard to find talent in the US to staff manufacturing facilities, tech companies and other businesses. As a result of their inability to rely on foreign workers, companies instead are looking to outsource work to international markets.

So there is a tremendous amount of uncertainly for employers on the immigration front. Can companies count on workers being able to stay in the US? From employees’ standpoint, are they willing to commit to working in the US, knowing it may be short-term? Should companies implement travel policies for foreign workers in case they are not able to return to the US? Do companies need contingency plans in case workers can’t get back in the country?

The changes are being driven by executive action, not Congressional lawmaking. This has led to numerous court challenges so far, and we expect even more litigation in 2020.

Employers who depend on foreign-born workers also are struggling to comply with the federal government’s 2017 “Buy American/Hire American” mandate. Because unemployment is so low, it can be hard to find talent in the US to staff manufacturing facilities, tech companies and other businesses. As a result of their inability to rely on foreign workers, companies instead are looking to outsource work to international markets.

JENNIFER CORY, WOMBLE BOND DICKINSON & KATE CHRISTENSEN MILLS, MONUMENT ADVOCACY

The following are some immigration enforcement and compliance trends we are watching closely heading into the New Year—as well as some steps employers can take to stay a step ahead of these fast-moving regulatory and enforcement challenges:

Trends in the US Department of Homeland Security

The US Department of Homeland Security, or DHS, is an umbrella for a number of immigration-related federal agencies, such as:

  • US Citizenship & Immigration Services, which handles benefits;

  • US Customs and Border Protection, and;
  • Immigrations and Customs Enforcement (ICE), which conducts on-site I-9 audits and raids.

DHS is likely to remain aggressive in its enforcement actions in 2020. For example, the Optional Practical Training program—the country’s second-largest foreign worker program behind H-1B—is under increased scrutiny and could even be abolished in the upcoming year.

The STEM Optional Training Program allows science, technology, engineering and math students working for e-Verify compliant employers to stay in the US after college or grad school for up to 36 months, so that they can receive practical training in their chosen field. But the Trump Administration is negative toward the program and has stepped up site visits to program participants.

We also believe there will be a continued increase in the number of H-1B applications denied. In 2015, only six percent of H-1B petitions were denied. But through the first three quarters of 2019, 24 percent of petitions have been denied. This year’s denial rate is on pace to match the previous high set in 2018.

H-4 visa holders married to H-1B workers with long pending green card applications are currently eligible to obtain work authorization in the U.S. However, proposed action on the regulatory agenda will eliminate this benefit if promulgated.

We anticipate further restrictions on the EB-5 program. Currently, foreign nationals who make significant investments in the US can acquire permanent residence. That investment threshold was raised on November 21, and there has been a slowdown in processing EB-5 applications, which could have a negative impact on inbound foreign investment.

Finally, we expect to see ongoing tougher standards for L-1 visa requirements regarding the level of specialized knowledge and/or salary required to obtain one of these visas. The L-1 program allows multi-national companies to transfer foreign employees into the US who are in managerial or executive positions, or who have specialized knowledge needed by the company.

But despite the notable increase in enforcement actions, we do not think the federal government will be able to mandate E-Verify nationally. This would require Congressional action and that is probably a fight that lawmakers do not want to have, given all the other issues on the table in Washington. But it certainly is possible that E-Verify could be included in any compromise reforms of specific visa programs. Such a compromise already is being discussed in the US House of Representatives. for agricultural workers. Under terms of the new proposal, farm employers would have to use E-Verify to screen future employees, while providing farmworkers with protection from deportation (via a “blue card”) and a path to full legal status.

With DHS immigration enforcement becoming increasingly aggressive, there are a number of practical steps employers should take to help ensure they are in compliance:

  • Fraud Detection & National Security: Employers should confirm in advance that H-1B/L-1 employees are performing functions as described in their visa applications and that they are paid the salary described in petitions. Also, confirm adherence to approved Labor Condition Application and public access file requirements, and regularly update these files. These updates should capture any changes in pay or work status. If the files are not up-to-date, the DHS can levy fines against employers.
  • Immigration & Customs Enforcement:
    • Conduct a self-audit of I-9 records at least once per year, preferably conducted by someone independent of the company. As audits have quadrupled in frequency, it is important to make sure that proper procedures are in place and records are in order, even if a company contracts with outside vendors to maintain these records. The employer, not the outside records-keeper, is still liable for any errors. Also, practice drills involving reception, security, legal and human resources professionals can be helpful. Make sure key documents are accessible in case an DHS inspection takes place.
    • Ask the investigator for identification, and accompany them at all times while they are on company property. Take detailed notes during an audit or visit. Do not simply hand over files, but ask the investigator to be specific about what they want. If possible, speak with legal counsel before answering any questions. Companies should designate primary and back-up spokespeople who are prepared to deal with these potentially tense situations.
  • Customs & Border Protection: Anyone coming into the US is potentially subject to search and seizure. This includes confidential legal info or trade secrets. As a policy, employers may want guidelines for international travelers to wipe their phones and laptops before traveling overseas.

Updates from the Departments of Justice and Labor and Other Federal Agencies

The US Department of Justice’s Office of Chief Administrative Hearing Officer maintains jurisdiction over immigration enforcement fines. Recently, the office levied a $500,000 fine against an employer over immigration law violations. Likewise, the US Department of Labor has stepped up its employment auditing efforts related to immigration.

Employers can expect the emphasis on enforcement to continue throughout 2020. They likely will see increased coordination between DOJ and DHS on enforcement-related rulemaking, more than in the past. A Nov. 14 Notice of Proposed Rulemaking regarding the asylum application process is an example of this increased cooperation.

Also, we expect a continued push for additional funding for the DOJ Executive Office of Immigration Review to increase the number of immigration judges.

So how should employers respond to these trends at the Departments of Justice and Labor? It is increasingly important for employers to be able to demonstrate they have made good-faith effort to stay compliant with immigration laws to avoid penalties from the Office of Chief Administrative Hearing Officer. Also, companies need to have the same documenting processes in place for all workers, so they are not hit with discrimination claims related to unequal treatment.

In addition, employers need to make sure they are keeping their Public Access and DOL Investigation files up to date. Further, employers should make sure employee Application for Permanent Employment Certification audit files are properly maintained. Failure to comply with the PERM program can result in revocation of an approval leading to loss of a worker’s green card status and employer debarment from participation in the program.

So how should employers respond to these trends at the Departments of Justice and Labor? It is increasingly important for employers to be able to demonstrate they have made good-faith effort to stay compliant with immigration laws to avoid penalties from the Office of Chief Administrative Hearing Officer.

JENNIFER CORY, WOMBLE BOND DICKINSON & KATE CHRISTENSEN MILLS, MONUMENT ADVOCACY

Companies can run afoul with the Department of Labor when terminating the employment of H-1B workers. For example, employers are required to pay for return transportation for some employees, and Department of Labor officials must be notified of the termination. So employers should have policies in place to make sure they handle H-1B terminations the right way before any problems arise.

2019 also saw the return of the long-dormant Social Security Administration No Match Letter. The Social Security Administration No Match Letter informs employers whenever they submit at least one name & Social Security Number combination on Form W-2 that does not match Social Security Administration records. When an employer receives such a letter, corrections are needed for Social Security Administration to properly post the employee’s earnings to the proper record, while also educating employers and encouraging them to use Social Security Administration online wage reporting tools to improve the accuracy of their wage reporting.

In 2020, we anticipate increased cooperation between the Social Security Administration and ICE on No Match Letters and related compliance action. There also could be additional guidance from DHS on intersection of No Match Letters with immigration compliance.

We are looking for another turbulent year for employment-related immigration law in 2020. But what will happen in 2021—and beyond? That largely depends on the 2020 Presidential and Congressional elections. The outcome of those contests will set the tone for immigration compliance and enforcement for years to come.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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