As part of its comprehensive immigration reform initiative, the Obama administration recently announced the settlement of an I-9 audit with Krispy Kreme and has promulgated a new worksite enforcement strategy that directs Immigration and Customs Enforcement (ICE) agents to shift from targeting illegal workers to focusing their resources on “employers who cultivate illegal workplaces by breaking the country’s laws and knowingly hiring illegal workers.” On April 30, 2009, the Department of Homeland Security (DHS) released a detailed “Worksite Enforcement Strategy” fact sheet that reflects this refocused effort. 

According to the fact sheet, “effective immediately, ICE will focus its resources in the worksite enforcement program on the criminal prosecution of employers who knowingly hire illegal workers in order to target the root cause of illegal immigration.” In addition to such criminal punishment as fines, penalties, and imprisonment pursuant to various statutes including 8 U.S.C. 1324a, DHS also authorized ICE to use “all available civil and administrative tools, including civil fines and debarment, to penalize and deter illegal employment.”

On July 1, 2009, as a direct result of this new strategy, ICE issued Notices of Inspection (NOIs) to 652 unidentified businesses nationwide. The NOIs instructed the companies to produce their Form I-9s for both current and former employees within the standard three days. An ICE press release stated that the companies were targeted due to “leads and information obtained through other investigative means.” ICE is currently using the Form I-9s to audit the companies’ hiring records to determine compliance with employment eligibility verification laws and regulations. 

The magnitude of the NOIs is notable as only 503 such notices were issued in all of 2008. Employers should be prepared for a continued increase in the number of government audits as ICE continues to shift its focus and use its resources to target employers suspected of knowingly employing unauthorized workers. ICE Assistant Secretary John Morton echoed this sentiment in his statement, saying that this was “the first step in ICE’S long-term strategy to address and deter illegal employment.” 

On July 7, 2009, ICE announced a $40,000 fine settlement with Krispy Kreme for violations of immigration laws. ICE’s investigation revealed that dozens of illegal aliens were employed at a Krispy Kreme doughnut factory in Cincinnati. ICE then conducted an I-9 inspection which confirmed these violations. As part of the settlement, the company has revised its immigration policy and enhanced its compliance procedures to avoid future violations. 

It is critical that all employers are aware of ICE’s new policy. No longer can employers assume that the traditional lack of governmental oversight over employers’ hiring practices will continue. Through the use of criminal sanctions, increased fines and the banning of noncompliant companies from obtaining federal contracts, ICE is striving to create incentives for employers to take proactive steps to ensure a legal workforce. 

Moreover, employers should not wait until they are served with a Form I-9 request; they should be proactive and conduct a review of their I-9s in order to ensure compliance with all employment eligibility verification laws and regulations. Employers should further create and enforce comprehensive compliance policies that would both minimize the chances of an ICE investigation and mitigate any potential penalties if a violation were to occur. The failure to do so could lead to serious consequences later. 

According to ICE, a comprehensive compliance policy would include among other things (i) using the DHS employment verification program E-Verify, (ii) establishing an internal training program on the hiring process, (iii) arranging for annual I-9 audits by a third-party, (iv) establishing a self-reporting procedure, (v) establishing a tip-line, and (vi) establishing policies, practices, and safeguards against the use of the verification process for unlawful discrimination. While some of these steps have their own drawbacks, it is clear that the implementation of a comprehensive compliance policy has the potential to protect the company from an investigation by the government in the future, or at least to mitigate its impact.

For inquiries about this Alert, please contact the author Clancy Galgay at

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