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Thomas Gard, a manager of Hallmark Industrial Services Inc., pled guilty in federal district court in August 2013 to harboring 42 undocumented workers, who were engaged in cleanup work on an oil spill in Kalamazoo, Michigan. Previously, the owner of Hallmark Industrial, Philip Hallmark, had pleaded guilty to similar crimes. According to Gard’s guilty plea, Hallmark Industrial was contracted by Garner Environmental to clean up a ruptured pipeline that resulted in an oil spill in Kalamazoo. Hallmark Industrial knowingly employed undocumented workers to clean up the oil spill, and fraudulently completed work authorization forms on their behalf. As a part of the conspiracy, the undocumented workers were housed in hotels, provided meals and transported to and from the worksite while they worked to clean the oil spill. Gard admitted he conspired with Hallmark to transport the undocumented workers back from Michigan after a now former U.S. Congressman accused Hallmark Industrial of hiring undocumented workers to clean up the Kalamazoo oil spill. To further the employment of the undocumented workers, Hallmark and Gard paid the undocumented workers in cash. The investigation also revealed the undocumented workers received less than what the contractor paid the company. Both Hallmark and Gard face a maximum of 10 years in federal prison and a possible $250,000 fine.This criminal case is just another of numerous instances of managers and/or owners receiving criminal penalties due to immigration-related violations of the law.

Two employers, Forever 21 and SOS Employment Group, have been fined by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) for document abuse – where an employer requires an individual to present certain documents during the I-9 process. Forever 21 refused to accept an Employment Authorization Document (EAD) and told the employee to present a permanent resident card when completing the I-9 form. Thereafter, Forever 21, forbid the individual, who was employment-authorized as an applicant for permanent residence, to work. SOS Employment Group mistakenly rejected an unrestricted Social Security card and valid driver’s license of an individual with refugee status. Pursuant to the settlement agreements, Forever 21 and SOS Employment Group agreed to pay $1,705.50 and $9,157.50 in back pay to the respective charging parties and $280 and $1200, respectively, in civil penalties to the U.S., and receive training on the anti-discrimination provision. Too often employers want to dictate what documents a new hire can provide in the I-9 process. As these settlements reflect, such mistakes are costly. These situations can be avoided if employers are properly trained by immigration compliance attorneys.

As frequently occurs, an inspection involved a small employer. In this case, about 41 employees. Everyone agreed the company failed to timely prepare I-9 forms for 18 employees/former employees. Additionally, the employer committed two other violations. Thus, the company was found to have an error rate of about 49%, which equals $770 per violation on the ICE grid. The issue was whether a proposed penalty of $14,630 would be upheld by OCAHO, especially in light of the company’s business losses, its small size, no history of previous violations, and no employment of any unauthorized workers. Usually, these factors will lead OCAHO to show leniency and reduce the penalty. In this case, ICE had already offered the company an opportunity to pay off the penalty over a three-year period of time. OCAHO agreed with both sides and gave the company an option – pay 100% of penalties over a three-year period or pay $10,500 in a lump sum immediately. With the number and amount of penalties increasing, ICE has been offering a payment plan for those companies who can establish financial hardship in paying the penalty. For employers, this is much appreciated and shows ICE is being pragmatic when it comes to paying penalties.

All of this news is indicia that the government is cracking more and more down on employers, imposing onerous fines and collecting. They are also implementing criminal penalties in more egregious cases. In this environment, it is essential that employers review their immigration compliance plans and seek counsel to assist them if they lack plans or there is scarce implementation of compliance plans. We feel that compliance will continue to exist at the forefront of immigration law and as benefits may accrue to employees and individuals, in contrast, we expect a further cracking down on employers.