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Fraud Investigations into Aramark Contracts

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					                                                           6/18/09




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  A New Dawn for Immigration and Employer
               Compliance

                   June 30, 2009

                 Presented By:
           Sean G. Hanagan, Esq.
        hanagans@jacksonlewis.com
       Association of Corporate Counsel
                 www.acc.com




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     Immigration Reform: How did we get here?
•    Comprehensive reform defeated August 2007
•    White House: Business support not enough
•    Congress: Bi-Partisan failure
•    Pro-Immigration: Divided & fractured
•    Anti-Immigration: Vocal & united
•    Business: Dodging and Weaving
•    Unions: Split Verdict, Recent Unity




A Rosier Future Under Obama?
•  Early Postponements of Regulations
•  Gov. Napolitano and Arizona Experience
•  Social Security No-Match Rule remains enjoined;
   DHS supplemental rule published
•  Administration agrees to postpone Federal Contractor
   E-Verify Rule mandating an estimated 160,000
   contractors to use E-Verify to at least September 8,
   2009




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  A Rosier Future Under Obama?
•  Administration did not support E-Verify requirement
   for all recipients of TARP funds.
•  Administration included $100M in FY 10 budget for E-
   Verify expansion.
•  Comprehensive Immigration Reform
•  New worksite enforcement policy targeting
   employers.




  Role of Worksite Enforcement
•  Check illegal immigration
•  Stop Abusive and Egregious Employment Practices
•  Deter Criminal Activities including:
    –  Alien Smuggling
    –  Illegal Inducement
    –  Harboring
    –  Unauthorized Employment
    –  Document Fraud
•  Promote national security
•  Protect critical infrastructure
•  Ensure fair labor practices




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     Introducing DHS Secretary Napolitano
•  "I expect to increase the focus on ensuring that employers
   of unlawful workers are prosecuted,"

•  DHS Secretary Napolitano, January 15, 2009
•  During her DHS Senate Confirmation Hearing

•  “I signed it, too, out of the realization that the flow of illegal
   immigration into our state is due to the constant demand of
   some employers for cheap, undocumented labor.”

•  Former AZ Gov. Napolitano, July 2, 2007
•  Statement on Legal Arizona Workers Act




     Immigration Inflation:
     Increasing the Cost of Doing Business
•    Increased I-9 audits
•    Criminal indictments & grand juries
•    Large-scale raids
•    Publicizing raids and indictments
•    Criminal search warrants
•    Asset forfeiture
•    Federal contract debarment




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     DHS Rhetoric? - The FY 08 Numbers
•  Over 1,100 criminal arrests tied to worksite investigations;
•  Over 5,100 administrative (deportation) arrests;
•  Indicted 135 business owners, managers, supervisors or human
   resources employees for criminal offenses including harboring,
   smuggling, and money laundering;
•  Largest single site worksite operation at a Howard Industries’
   plant in Laurel, Mississippi, resulting in arrest of over 600
   employees;
•  Over $30 million in criminal fines, restitutions, and civil
   judgments in worksite enforcement cases;
•  Record $20.7 million settlement; and
•  For the first time, debarring seven companies from federal
   contracting.




The Genesis of an ICE Investigation
•    Tips from employees and public to ICE hotlines
•    Unions becoming increased source of tips to ICE
•    Non-response to hotline/ethics calls
•    Social Security No-Match letter history
•    Local pressures
•    Key industries (high turnover)
•    Critical infrastructure and Dept. of Defense
•    DOL, SSA, IRS, etc.
•    Temporary worker providers




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The New DHS Worksite Enforcement Strategy
The Bellingham, Washington Raid
     What happened?
•    ICE initiates “first” raid under Obama Administration.
•    Secretary Napolitano not notified.
•    Strong community reaction, citing “broken promise.”
•    Napolitano vows review of operation, freezes other
     operations.
     The results:
•    28 employees released and granted deferred action.
•    28 employees issued employment authorization by DHS.
•    “Publisher clearinghouse” celebration.




Re-Introducing the I-9
•    It is evidence for a prosecution.
•    It is a prosecution tool against the employee.
•    It is a prosecution tool against the employer.
•    Guess who signs it?
•    … Potential defendants.




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Tips for Surviving the New Era of Worksite
Enforcement
•    Re-acquaint yourself with I-9 process
•    Where are the records?
•    Find out about No-Match history
•    Procedures to create UNIFORMITY
•    Respond to identified risks/complaints
•    Prepare for the audit freeze
•    Training
•    The form
•    Maintenance and internal audits




Questions for Employers to Ask:
•    Do you have written policies?
•    Do you apply procedures uniformly?
•    Have you trained HR Managers?
•    Does payroll equal number of I-9s?
•    Where are the No-Match letters?
•    SSNVS? What happens?
•    Heightened review of Supervisors & HR staff?
•    What control over temps/recruiters?
•    Internal audits and corrections?
•    Remember: Civil Rights
•    Am I using the new Form I-9 – April 3, 2009?




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                     PART 2: I-9




Employment Authorization Verification:
New I-9 Form
•  New Form I-9 went into effect on April 3, 2009
•  New form at
   http://www.uscis.gov/files/form/I-9_IFR_02-02-09.pdf
•  All documents must be unexpired
•  Eliminates I-688, I-688A and I-688B
•  Adds U.S. passport card to List A
•  Adds foreign passport with certain machine readable
   immigrant visas to List A
•  Adds Micronesia and Marshall Islands passports with I-94
   to List A




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Base Obligations of Employers
•  Properly and fully complete Form I-9 within 72 hours of
   employee’s start of employment:
    –  Certain parts must be completed on day 1
    –  Documents must be presented within 72 hours
    –  Listed documents must be reviewed to ensure they
       look authentic
    –  Two (2) schools of thought as to whether to copy and
       retain back-up documents
•  Employers can also request to see Social Security cards
   on the first day of employment for payroll purposes




Employer Review and Certification
•  Employee completion of Section 1 no later than first day at
   work
•  Section 2 Must Be Completed No Later Than Three
   Business Days After Commencement of Employment
•  One Document in LIST A OR
•  One Document in LIST B AND One Document in LIST C
•  Work Start Date in Certification Bloc
•  Employer Representative Signature, Printed Name, Title
•  Business Address
•  Date




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Electronic I-9
•  USCIS provides a Portable Document Format fillable-
   printable Form I-9 from its
   Website, www.uscis.gov.
•  Form I-9 can be electronically generated and retained,
   provided that:
    –  The resulting form is legible;
    –  No change is made to the name, content, or sequence
       of the data elements and instructions;
    –  No additional data elements or language are inserted;
    –  The employee receives Form I-9 instructions; and
    –  The standards specified under 8 CFR 274a.2(e) are
       met.




E-Verify
•  E-Verify:
    –  Formerly the Basic Pilot/Employment Eligibility
       Verification Program)
    –  Operated jointly by the DHS and SSA online
    –  Check the work status of new hires by comparing
       information from an employee’s I-9 form against SSA
       and DHS databases
    –  More than 87,000 employers are enrolled in the
       program, with over 6.5 million queries run so far in
       fiscal year 2008
    –  Voluntary program for most employers - YMMV
    –  Over 444 million records in the SSA databases and
       more than 60 million in DHS databases
    –  Registered employers growing over 1,000 per week




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FAR Federal Contractor Rule
•  Postponed until September 8, 2009 - implementation
   of the E-Verify requirement
•  Prime federal contracts with a period of performance
   longer than 120 days and valued above $100,000
•  Subcontracts for services or construction valued at
   $3,000 or more
•  Initially was to go into effect January 15, 2009




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            PART 3: SS No-Match




Social Security Reporting Basics
•  When the SSA cannot match an employee’s SSN
   and name as reported on the W-2, the worker’s
   earnings are posted to the Earnings Suspension File
   (ESF).
•  If the name and SSN do not match its records, the
   SSA will send a notice of the discrepancy to the
   employer.




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Regulations In Limbo
•  In 8/07, the DHS announced final regulations
   outlining procedures for employers to follow when
   they receive a Mismatch letter. The regulations were
   to have become effective on 9/14/07.




Regulations In Limbo
•  In 8/07, the DHS announced final regulations
   outlining procedures for U.S. District Court in
   California issued an injunction blocking these
   regulations in AFL-CIO, et al. v. Chertoff, et al. (N.D.
   Cal. Case No. 07-CV-4472 CRB)
•  DHS expected to submit new brief by July 10, to
   move to compromise, revision




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Regulations In Limbo
•  Employers should not follow the procedure until after
   it has been found to be lawful, as it contains
   provisions that could violate federal law.




Proposed Regulations
•  Would require employers to complete another I-9 for
   employees subject to a Mismatch letter if not resolved
   within 90 days. When completing the I-9, an employer
   must refuse to accept certain documents that have
   been the subject of a mismatch even if the document
   reasonably appears valid.




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Aramark Case
•  Aramark Facility Services v. Service Employees Intl
   Union Local 1877 (530 F.3d 817). The Company
   received a no-match letter on 3,300 employees. It
   sent out a letter to 48 employees giving them 3 days
   to get a new SS card or a verification form showing
   the SSA card was being processed.




Aramark Case
•  Ninth Circuit: a no-match letter does not make any
   statement about . . . immigration status. Further,
   there are multiple causes for SSN mismatches,
   including typos, name changes, compound last
   names prevalent in immigrant communities, and
   inaccurate or incomplete employer records.




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Aramark Case
•  The employees’ failure to correct the SSN
   discrepancies did not provide the Company with
   constructive knowledge that the employees were
   undocumented.
•  The Court considered the time period given to the
   employees to respond to be insufficient.




If You Receive A No-Match
•  Having procedures in place to respond to the
   government
•  Follow up appropriately with the employee
•  Do not ignore a SSA no-match letter




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                  PART 4: Visas




Impact Of Economic Downturn On
Nonimmigrant Visa Status
•  Due Diligence
    –  Employee status
    –  Corporate compliance
•  Myriad Personnel Actions
    –  Reductions-in-force
    –  Benching/furloughs
    –  Changes in compensation
    –  Changes in position duties
    –  Changes in job location
    –  Changes in benefits




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Impact Of Economic Downturn On
Permanent Residence Process
•  Individuals PERM (Labor Certification)
    –  Termination
    –  Change in salary, position, job location
•  Entire PERM Program
    –  Hiring “freezes”
    –  RIF’s
    –  Targeted Position Eliminations
•  U.S. Applicant Availability
•  DOL Scrutiny of Target Industries
•  Long Term Horizon
    –  Final NIV dates




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