Last week, Howard Industries, Inc., a manufacturer of electrical transmission and distribution equipment, pled guilty to conspiracy to violate immigration laws and agreed to pay a record $2.5 million fine.     

The plea comes approximately 2 1/2 years after an immigration raid on the company’s transformer manufacturing plant in Laurel, Mississippi, when nearly 600 people were arrested.  In addition, in December 2009, the company’s former HR Manager pled guilty to conspiring to violate immigration laws and admitted that he routinely hired people whom he knew were not authorized to work in the United States.  The HR Manager will be sentenced on Thursday, March 3, 2011 and faces a maximum of five years in prison on each count and a fine of $250,000.

According to the criminal complaint against Howard Industries, the company knowingly hired people unauthorized to work in the United States and, in the process, knowingly accepted false identity documents.  Specifically, the charge states that, as part of the conspiracy, the HR Manager:

  • hired unauthorized workers presenting false identity documents and completed the I-9 Form with false information;
  • submitted SSNs to the SSA to verify employees’ numbers and then disregarded the results if they came back as invalid;
  • instructed employees to obtain alternative identity documents which he knew were false;
  • falsely attested, under penalty of perjury, on the I-9 Form that he had examined the documents presented and determined them to be genuine; and
  • assured Spanish-speaking workers that he would warn them of any possible immigration raids.

Clearly there was some wrong-doing on the part of the company, and this was not simply a case of an HR Manager gone rogue.  And of course, as the criminal complaint states, the company “is legally responsible for the actions of [the HR Manager] as his employer.”

So, what lessons can employers learn from Howard Industries?  How could Howard Industries have avoided this criminal fine, guilty plea, negative publicity and considerable litigation expense (including the additional recent lawsuits stemming from these actions)

A few suggestions for employers to ponder:

  • Never allow one HR manager to be responsible for all employment actions and I-9 Form compliance.
  • Conduct routine internal audits of I-9 Form compliance, including cross checks by more than one employee.
  • Conduct routine internal reviews of the hiring process.
  • Ensure the company is following the appropriate re-verification process for I-9 Forms.
  • Conduct appropriate follow up in response to Social Security No-Match letters and IRS discrepancy notices.
  • Ask experienced immigration counsel to conduct regular comprehensive I-9 Form audits.
  • Know your workforce and do not turn a blind eye to when something seems amiss.