At the end of this past summer, Federal immigration authorities raided a transformer manufacturing facility in Laurel, Miss., and arrested 595 people. Illegal workers were discovered from eight countries and two continents, in what now ranks as the single largest raid in U. S. history.

The real bombshell from this news, though, was not so much the size of the raid, but the report that the company (Howard Industries) had been registered for, and said it had been utilizing, the government’s E-Verify system, to try to separate eligible and illegal workers from its labor pool.

This sent shivers down the spines of many of us in club and resort management who have been trying earnestly to deal with complicated immigration issues, as part of our ongoing search for qualified full-time and seasonal workers. When E-Verify came on the scene a couple years back—as a new, free Web-based system formed through a partnership between the Department of Homeland Security and the Social Security Administration, with oversight by the U.S. Citizenship and Immigration Services—it seemed to offer hope we might finally be able to streamline what has become a very costly and time-consuming process, when checking to see if potential hires are authorized to work in the U.S. and are using valid Social Security numbers. ??

But as the Howard Industries case brought glaringly to light, E-Verify has hardly become the failproof answer. A report in June 2007 by the Social Security Administration’s Office of the Inspector General, in fact, found that about 4.1 percent of the agency’s 435 million records contained errors.

I don’t know about you, but I certainly can’t afford the risk of thinking I have properly screened everyone in my workforce, only to then discover that 4 percent is actually illegal. Yes, we all know of some club and resort properties that have been less than diligent when it comes to immigration compliance, and in fact it hasn’t been hard to find news reports within our own industry of raids, substantial fines, and unwanted local media attention.

But most of us want to do the right thing, and when we find out that even the tools that the government itself makes available to us are so badly flawed, it can be tempting to just throw up our hands in frustration and resort to relying on hopes and prayers. Of course, we have no choice but to continue to try to comply with our country’s intensifying immigration laws, or be prepared to face the consequences.

And while it’s true that getting everything in order can be a painful process, it’s one you can’t afford not to take seriously. Whether you try to take on the responsibility in-house, or use outside expertise, you must allocate the time and resources required to properly tackle the task. And while the problems with E-Verify have shown there is still no simple (or free) solution, there are important and proven steps you can take to minimize the risk, and at least show that you have made good-faith efforts to comply, should any difficulties arise.

A Hard Look Within

Having paperwork that you think is all in order is one thing; subjecting it to a no-holds-barred audit is quite a different, and more reassuring, level of compliance. At The Club at Longview, we decided to develop our own I-9 Self-Audit, which we first viewed as just a precautionary measure. But we found that while we had all of the proper I-9 forms and other important documents in place for every one of our employees, we were still (and unknowingly) not in full compliance.

This discovery came about after we took our self-audit to the point of verifying the Social Security numbers of all of our employees (including my own). In doing this, we found that we had a number of employees without valid numbers.

(Note: While the flaws of the E-Verify system for verifying Social Security information have come to light, the Social Security Number Verification System, available at www.ssa.gov/employer, is a more tested method for getting an instant read on whether or not a number is valid. In the extended, online version of this article, which you can find at www.clubandresort business.com, valuable additional information is also provided about record-keeping requirements for I-9 forms, and other resources that should be used to ensure full compliance.)

Once we discovered the issues with some of our employees’ Social Security numbers, we then presented, on the advice of our HR consultants, a letter to those employees who did not have valid numbers, stating that they must achieve compliance within a specific period of time, or be terminated. We wanted to give our employees the benefit of any potential errors within the system. But we found that after receiving this notice, some of these employees simply didn’t show up for work the next day. And there were others who had to be terminated, because they could not become compliant within the specific time period.

This self-audit process caused our club some pain and grief, but we were able to get through it. By taking a proactive approach—even with the knowledge that it might lead to having to replace a few employees—it became much easier when we actually did find out that we had employees who were not in full compliance (knowingly or not) with the immigration laws. By discussing all contingencies and plans of action prior to implementing this in-house audit, we had made the necessary preparations for whatever was to follow.

By taking this approach, we demonstrated to everyone—both within our club and outside it—that while enforcing immigration laws can be a difficult disruption, we understand that those laws are in place for many valid reasons. And in the end, demonstrating that we are doing all we can to be compliant with these laws creates better feelings not only among membership, management and the outlying community, but everyone in our workforce (as an important part of our effort, we also made it clear that for those who were terminated, we would be glad to try to provide them again with employment opportunities, if they could become compliant).

It is up to us in management to set the proper tone and show that no one now has any choice in this matter, because immigration reform is here to stay. We must all do all that we can to reduce the complexities of the legal immigration process, not only for our own organizations, but also by providing support to those immigrants who want to obtain the proper documentation, so they can be cleared to work in our country and rightfully pursue the American dream.

Doing It By the Books

Even if 100% compliance with current immigration regulations can be achieved, many employers often get sloppy about storing and retaining required documentation. I-9 forms should be kept separate from employees’ personnel files, to avoid charges of discrimination based on the information included on the forms concerning an employee’s age and national origin. In addition, keeping I-9 forms separate from personnel files facilitates their production in the event of an audit by the USCIS (United States Citizenship and Immigration Service), formerly known as the INS (Immigration and Naturalization Service)

Employers should use a “binder system” or similar file system for maintaining I-9 forms. In the binder system, the employer keeps two large three-ring binders, one for current employee I-9 forms and one for terminated employee I-9 forms. Organize the I-9 forms alphabetically by the employee within the binders. When a new employee is hired, her or his I-9 form should be placed in the current employee binder. At the time an employee is terminated, her or his I-9 form should transferred to the terminated employee binder, and the date of termination should be noted in the margin of the I-9 form. USCIS regulations also permit employers to store I-9 forms electronically, subject to very specific requirements.

I-9 forms must be retained for three years from the date of hire, or one year from the date employment ends, whichever is later. Note that both parts of the test must be met before you may lawfully discard an I-9 form.

You must have an I-9 form for all current employees hired after November 6, 1986, when the law was enacted. You do not need a form for employees hired prior to that date if they have been continuously employed. However, you might want to have forms filled out for these employees, too, just to avoid any potential grief from the USCIS, should you be audited.

You should periodically review the terminated employee binder or file folder to determine which I-9 forms may be discarded and which must be retained pursuant to the I-9 retention requirements. The penalties for I-9 “paperwork violations,” including failure to complete the I-9 form or failure to retain the I-9 form for the required period, are $110 to $1,100 per violation. Employers may also be subjected to more severe penalties if the USCIS determines that the employer “knowingly” hired an unauthorized alien. A properly completed self-audit reduces the risks of fines and penalties.

Other Self-Auditing Resources

If you conduct your own “self-audit,” you must know that Federal discrimination laws and similar state laws make it illegal to discriminate on the basis of race and national origin. Employers must ensure that the audit process does not create the potential for discrimination charges.

For example, it would be inappropriate to focus the audit on only those employees who appear to be foreign nationals. You should audit all I-9 forms or audit a truly random sample of I-9 forms, versus selectively choosing which I-9 forms to audit. In addition, the audit should be conducted on a recurring (at least annual) basis, to avoid complaints that the audit was targeted at a specific group of individuals.

You can go on line to http://www.uscis.gov/files/nativedocuments/m-274.pdf to retrieve a copy of the USCIS Handbook for Employers, if you would like to conduct your own in-house I-9 Compliance Audit.