SAN JOSE — When customers enter Mi Pueblo Food Center to do their weekly shopping, the goal is to make them feel at home.
Each of the grocery chain's 21 outlets, which are scattered throughout the Bay Area, Monterey Bay region and Central Valley, is styled to emulate a distinct Mexican region. Boisterous rancheras stream from the stores' speakers. Vivid primary colors and architectural references cover the walls: the adobe church of San Juan Nuevo, Michoacan, in San Jose's flagship store; the Maya pyramid of Chichen Itza in the Salinas market.
Mi Pueblo's employees, all bilingual, wear name tags that list their hometowns.
It's a formula that helped turn the business founded more than two decades ago by an illegal immigrant from the town of Aguililla into a $300-million enterprise.
"Those of us who don't speak English, we come here because we're comfortable," Yoselina Acevedo of San Jose, a 53-year-old immigrant from Michoacan, said while shopping one recent day.
So the company's announcement late last month that it was participating in a voluntary federal program that checks the immigration status of all new hires elicited anger and confusion from workers and customers alike.
Company officials said that, although they were critical of E-Verify, they felt "tremendous pressure" from immigration officials to sign up. Community organizers have pledged to launch a shoppers' boycott Oct. 8 if Mi Pueblo founder Juvenal Chavez, who is now a legal U.S. resident, does not change his mind.
"He says he has suffered the pain of being an immigrant. I don't believe it," said Rogelio Marquez, 37, who said he was laid off from the Gilroy store after becoming active with a workers union. "We support the economy of this country. Why is this man now checking papers?"
As for the company, spokeswoman Perla Rodriguez would say only that Mi Pueblo signed up for E-Verify at the recommendation of the U.S. Department of Homeland Security.
"We don't want to create fear in our community, and we recognize this is a difficult move to understand," Rodriguez said. "It was a decision that weighed very heavily on us."
The controversy has highlighted long-standing questions about how Immigration and Customs Enforcement, an arm of the Homeland Department, decides which businesses to audit — and how aggressively agents are pushing the computerized E-Verify program behind the scenes.
In 2009, the Obama administration announced it would shift its emphasis from deporting undocumented workers to punishing firms that hire them. Although less splashy than workplace raids that resulted in deportations, the reach of the investigations arguably was broader.
According to ICE, there have been 3,764 workplace probes in fiscal year 2012 so far, more than double the number in 2009. In the last year, ICE has fined employers nearly $20 million; 133 company managers were convicted of immigration-related crimes.
Sometimes, however, ICE officials said they were satisfied if a company merely fires its illegal workers. E-Verify can be a bargaining chip, with an employer signing up as part of an informal agreement to dismiss a case without further penalty.
Launched in 2007 and administered by the U.S. Citizenship and Immigration Services, E-Verify has been touted by officials as a way for businesses to make sure they are hiring legal workers. By law it cannot be used to screen existing employees.
Virginia Kice, an ICE spokeswoman, acknowledged that the federal government cannot force employers to participate. "It's a voluntary program," she said. "Do we encourage but not compel? Absolutely."
But immigrant rights activists have complained that ICE has not been transparent about how it selects its investigative targets and negotiates deals with them. Critics also contend that the probes hurt businesses that depend on low-wage immigrant labor, forcing them to scrap entire workforces.
"ICE is engaging in this broad, sweeping enforcement campaign, yet no one knows how they're doing it," said Francisco Ugarte, an attorney with the San Francisco-based Dolores Street Community Services. The immigrant rights group is part of a statewide coalition that has filed a Freedom of Information Act request seeking details on the enforcement program.
Federal officials declined to comment on whether Mi Pueblo was the focus of an audit or investigation. Yet Rodriguez noted that the company was urged to join E-Verify at a time when immigration officials have been exerting "pressure" on a number of supermarket chains in California that serve the Latino immigrant market.
"We recognize that E-Verify is a flawed program," Rodriguez, the Mi Pueblo spokeswoman, said. "We realize that as a company, we have to take a much larger role in immigration reform. That's really where the solution lies."
A 2010 audit by the Government Accountability Office detailed some problems with E-Verify.
Foreign-born individuals with hyphenated names or multiple surnames are especially vulnerable to being flagged mistakenly, the audit said. And although the vast majority of people identified by the system last year were undocumented, more than 46,000 people with legitimate papers were erroneously singled out.
Despite the possibility for errors, several states — Alabama and Arizona among them — require that all businesses enroll in E-Verify. Federal agencies and contractors also must participate; some states have similar requirements for state employees and contractors doing business with the state.
In 2011, California legislators passed a law that forbids local governments from instituting E-Verify requirements. Yet pressures nevertheless are mounting for companies with immigrant labor pools to sign up.
Julie Pace, an Arizona attorney, said that even in states where E-Verify is voluntary, ICE agents conducting audits have dinged businesses that aren't on board — and promised leniency to those who agree to sign up.
Statistics show that enrollment has grown to nearly 400,000 employers nationwide, about 7% of U.S. businesses. In California, about 30,480 firms are enrolled, up from 11,514 in 2009. In response to a recent U.S. Citizenship and Immigration Services survey, 14% of participants said they had signed up in hopes of avoiding an ICE audit.
Los Angeles immigration attorney Carl Shusterman said he recently started advising some companies to join E-Verify, despite having doubts about the database's accuracy. One of his clients, an Inland Empire manufacturer, lost dozens of its employees after ICE began investigating.
"The only thing to solve that is E-Verify, so you'd better sign up," Shusterman said. "But I don't really endorse the system."
ICE officials said workplace investigations generally originated with tips, whether from business competitors or disgruntled ex-employees. But critics say reliance on those with an ax to grind can put immigration enforcement in the middle of labor disputes. Others have expressed concern that ICE might be targeting work sites where undocumented employees have unionized or are seeking to do so.
The United Food and Commercial Workers Union and the International Brotherhood of Teamsters have filed eight actions with the National Labor Relations Board, several of them successful, against Mi Pueblo over the last two years. They alleged that the company had failed to recognize and bargain with truckers who unionized and had retaliated against workers with union sympathies.
The discord has prompted activists and local clergy members to assail Mi Pueblo's decision to join E-Verify as a retaliatory tactic.
"We see E-Verify as another campaign to put undue fear into the workers who created this community, who created this store and who buy from this store," Stan Taylor, a board member of San Jose's Interfaith Council on Economics and Justice, said during a recent protest.
Rodriguez called those allegations preposterous. "They are misinforming the public," she said.
Yet customer Marina Perez, 58, said news of the company's increased immigration enforcement was disheartening.
"Here of all places? Que pasa?" Perez, originally from Michoacan, said outside the San Jose store. "It's bad. There are so many people who live here without papers. I think I will change where I shop."