Guarding against illegal workers

IN an ironic twist, the company hired by the U.S. government in 1999 to help build a fence along the Mexican border to curb the flow of undocumented workers itself recently ran afoul of immigration laws.

In March, two senior executives of Golden State Fence Co. of Riverside were each sentenced to six months of home confinement and fined a combined $300,000 for employing scores of illegal workers.

Golden State Fence, which declined to talk about the case, also paid a $4.7-million fine, a sum that would send many small companies straight into bankruptcy.

“It’s hard to find a better example of how necessary it is for some employers to hire undocumented workers in order to stay in business,” said Niels Frenzen, a USC immigration law professor and director of the law school’s Immigration Clinic.

How to verify employees’ legal status is a growing concern for small businesses. Although the current illegal immigration crackdown is being felt by all employers, much of the burden is falling on the owners of small companies that hire a disproportionate share of undocumented immigrants in an array of industries, including retail and agriculture, experts say.

This year, federal immigration officials raided restaurants in California and 16 other states and arrested nearly 200 illegal immigrants working for a janitorial company. That followed similar high-profile raids in Maryland, Indiana and Kentucky that amounted to some of the largest and harshest penalties against employers in history.

In all, the number of employees arrested for workforce violations has increased to 3,667 in 2006 from 485 in 2002, according to U.S. Immigration and Customs Enforcement.

Scott Hauge, president of the trade group Small Business California, says that although some small-business owners wittingly hired undocumented workers, many others don’t know they have illegal employees on their payroll or what to do if they suspect they might.

Even those who aren’t aware that they are employing illegal workers could face prosecution.

Employers who fail to comply with employment verification laws can be fined $110 to $1,100 per illegal worker, and the employer can face other civil as well as criminal penalties.

One reason some employers run into trouble: Employment documentation isn’t always reliable.

The Immigration Reform and Control Act of 1986 allows job applicants to submit various forms of documentation, including a passport, a birth certificate and a Social Security card, which can be faked with varying degrees of ease.

By some estimates, as many as 90% of undocumented workers have forged or stolen documentation.

According to the law, “as long as it doesn’t look like an obvious fake, the employer must accept it,” said Frenzen of USC.

Employers say fear of discrimination lawsuits is another concern.

Last June, the Department of Homeland Security issued a proposal to have companies give workers 60 days to resolve any problems with their identifications once the Social Security Administration flags it. But the Equal Employment Opportunity Commission warned that the proposal could run into legal trouble because many of those affected would probably be low-income workers who tend not to have papers.

Cheryl Gertler, a Los Angeles immigration lawyer, says there are ways for small employers to protect themselves better.

She recommends employers set up good ways to file and store employment verification information because federal law requires employers to keep the information for three years after the worker is hired or one year after the employment ends, whichever is more recent. Gertler also suggests that companies perform routine internal audits.

Immigration officials “are typically easier on people they think are trying to operate within the law even if they make some mistakes,” she said.

Another helpful tool from the Department of Homeland Security and the Social Security Administration is a digital database that began in 2003 to help employers check an applicant’s immigration status within minutes. The system has been used by 10,000 employers, the agencies said, although one recent study found that as many as 20% of the responses from the computer system were inaccurate.

In light of the confusion and the uncertainty that an immigration reform package will be passed by Congress soon, some companies are turning to courts for help.

Last year, Global Horizons Inc., a Santa Monica company that supplies seasonal agricultural workers to farmers across the country, filed a lawsuit against Munger Bros., a Delano, Calif., blueberry farm. The company accused Munger Bros. of canceling its agreement at the last minute when Munger found another company that provides cheaper, allegedly illegal workers to do the seasonal work. Munger has denied the allegation.

Mordechai Orian, Global Horizons’ chief executive, says that when the case goes to court, which probably will happen late this year, he will present evidence of falsified Social Security cards from the workers Munger eventually hired.

“They gave me no other choice,” Orian said. “What else are companies who play by the rules supposed to do?”

daniel.costello@latimes.