As government audits increase, employers must be more diligent in their performance of internal audits to ensure they’re compliant with employment and immigration laws.  Government audits can result not only in fines and sanctions, but also cause significant interruptions in business. Thus, proactive auditing, counseling and training have become a business necessity rather than a luxury.

While Immigration and Customs Enforcement (ICE) has historically targeted factories, the hospitality industry is certainly not immune to raids or audits. Hotels must be extra vigilant in recordkeeping and hiring practices as ICE and the Department of Labor (DOL) increase their raids and audits. Thus, it is imperative employers undertake investigations to ensure proper documentation is kept for every employee, while at the same time remembering employees must be given time to cure any defects in their I-9 documentation prior to termination of their employment. While it may seem like a precarious situation for employers, training and internal I-9 audits can help companies stay compliant with the law and fair to the employee, avoiding fines and litigation.

I-9 documents show two things: the employee's identity (therefore, there must be a document with the individual's picture) and eligibility for work authorization. I-9 documents can range from driver’s licenses, I-797 Approval Notices and passports to
Department of Corrections’ identification cards. While each piece of identification offered by the employee must be reviewed in the original form, it’s optional but highly recommended that employers make copies and retain records of these items.

During an internal audit, an employer could find expired documents, documents that look suspicious or are incomplete. Although it’s the duty of an employer to be thorough, re-verification (requesting an employee submit further documentation) is necessary in some circumstances, but actually prohibited in others. A legal permanent resident (commonly known as a green card holder) may have a permanent residency card that expires after 10 years. However, the status of a legal permanent resident is a protected class and re-verification of such employees typically is unnecessary and could be considered harassment. Of course, a legal permanent resident who has a conditional green card may be re-verified. Therefore, supervised audits by an attorney are recommended.

ICE raids and DOL audits are similar to IRS. audits: there is no particular reason why they occur and they come when you least expect it. The best way for an employer to protect it is to keep excellent records and perform internal audits. A trend in raids and audits is if the industry as a whole seems to hire undocumented
workers, raids and audits will randomly occur in the rest of the industry. Although there is no specific trigger, industry trends tend to be good indicators that an audit or raid may be expected.

When conducting an internal policy audit, it is imperative employers ensure three things: (1) that all existing policies are lawful; (2) that any additional necessary policies are implemented; and (3) that all policies are properly publicized, enforced and monitored. Case law demonstrates that the mere existence of a policy that isn’t enforced is not a valid defense in litigation. In contrast, the courts encourage a proactive approach to minimizing litigation threats by recognizing the affirmative defense of adopting and enforcing effective policies. Legislative bodies across the country have likewise endorsed a proactive approach by supporting mandatory training legislation. In addition, during a mandatory audit, the Department of Labor also takes into account an employer's "Good Faith" and will make concessions to an employer who has made an effort to comply with the law and implement lawful policies. Investing in preventative measures such as auditing and training can avoid litigation and fines in the long run.

Employers should work with their in-house counsel, human resources professionals and outside counsel when necessary to review policies, implement necessary changes and consistently advise and train employees.

Neena Dutta and Cora MacLean are associates with McElroy Deutsch Mulvaney & Carpenter LLP. Dutta may be reached at 973-622-7711 or at ndutta@mdmc-law.com. MacLean may be reached at 973-425-4233 or at cmaclean@mdmc-law.com. For additional information, visit www.hospitalitylawyer.com.