Employers: What to know as immigration battle plays out

As the battle between federal preemption and states' rights under the 10th Amendment heats up over immigration, California Attorney General Xavier Becerra stands tall in defense of California Assembly Bill 450, the Immigrant Worker Protection Act.

The act, which took effect at the beginning of the year, sharply restricts the extent to which public and private employers in California can volunteer information to U.S. Immigration and Customs Enforcement agents. Previously, under federal law, ICE agents had authority to search nonpublic areas of a business or outdoor agricultural operations and business records without a warrant provided that they obtained the consent of the owner.

The U.S. Department of Justice sued California on March 6 seeking to enjoin enforcement of the act during the lawsuit. A final decision on whether the act violates the Constitution could take months. Until a court orders otherwise, employers must still comply with the act.

Specifically, AB 450 amended Government Code Sections 7285.1, 7285.2 and 7258.3 as well as Labor Code Sections 90.2 and 1019.2. While these amendments effectively require ICE agents to demonstrate probable cause to search a business and its records, they also impose heavy penalties of up to $10,000 per violation against employers. Employers seeking to avoid such fines will need to review the act's requirements and adopt proper response policies in the event that ICE agents seek to search a workplace or employee records. Below we discuss the more salient provisions of these amendments.

First, the act prohibits employers and anyone acting on their behalf from voluntarily consenting to an ICE agent entering any "nonpublic areas of a place of labor" without a "judicial warrant," except as otherwise required by federal law. Thus, employers generally cannot admit ICE agents to payroll or human resources departments, break areas, offices, cubicles, warehouses or anywhere else that is not open to the public without a proper warrant. Notably, only a judicial warrant signed by a judge after a finding of probable cause -- as opposed to an administrative warrant, "warrant of deportation or removal" or other warrant -- excepts an employer from liability. Also, judicial warrants may not all appear the same. In light of these differences, the best practice for any employer who is or may be presented with a "warrant" is to consult with their counsel. Failure to comply with this new provision carries a civil penalty against the employer of $2,000 to $5,000 for the first violation and $5,000 to $10,000 for each subsequent violation.

However, there are several important exceptions to this strict prohibition. For example, if a court finds that an ICE agent somehow gained entry to a nonpublic place of labor without first obtaining the consent of the employer or person in charge of the area, the civil penalty does not apply. Essentially, employers will not be liable for an illegal search. Also, the new law defines a "violation" as each incident where the employer or person in charge voluntarily consented to ICE's entry into nonpublic work areas, "without reference to" the number of employees, ICE agents or locations affected in a day. This definition is important because, unlike many Labor Code sections, it does not allow for stacking penalties from a single incident -- potentially hundreds of thousands of dollars.

Employers are not precluded from taking the ICE agent to a nonpublic area where employees are not present in order to verify whether the ICE agent has a judicial warrant as long as no consent to search nonpublic areas is given in the process. However, this practice may not be advisable for many employers, as an employee might walk into the nonpublic area or an employer might have to lead the agent through other areas that are not open to the public, leading to a violation. Also, avoiding nonpublic areas prevents a later legal dispute over whether the employer or their agent gave consent to search nonpublic areas and whether that consent was express or implied by any number of seemingly innocuous actions, like opening a door for the ICE agent to walk through.

Second, the act prohibits employers and those acting on their behalf from voluntarily consenting to an ICE agent accessing, reviewing or otherwise obtaining the employer's employee records without a subpoena or a judicial warrant, which an employer might also challenge in court. Again, the best practice for any employer who receives a subpoena or warrant is to contact their counsel to determine the employer's rights and obligations under the act as well as assess the validity of the subpoena or warrant. Violation of this provision also carries a $2,000 to $5,000 fine for the first violation and $5,000 to $10,000 for subsequent violation.

However, there are also important exceptions to these restrictions on the right to access records. This limitation does not apply to I-9 Employment Eligibility Verification forms or other documents for which a Notice of Inspection has been provided to the employer. Additionally, employers are not subject to fines if a court finds that the records were accessed, reviewed or otherwise obtained without the consent of the employer or person controlling the workplace. A "violation" under this section also applies to each incident without reference to the number of employees or ICE agents involved or the number of employee records.

Third, in the event that immigration agents intend to inspect I-9 Employment Eligibility Verification forms or other employment records, the act requires that employers give notice to each current employee within 72 hours of receiving a notice of inspection from an immigration agency. (This puts the employer in the official capacity of a whistleblower. The recent controversy that erupted when the Oakland Mayor Libby Schaaf announced that ICE raids were imminent has resulted in an investigation by the U.S. Department of Justice.) The employer's notice to the employee must be in the language the employer normally uses to communicate employment-related issues to the employee, and the notice must also be given to the employee's authorized representative like their collective bargaining representative, if any, within 72 hours. The "posted" notice must detail the name of the immigration agency conducting the inspection, the date the employer received the notice of inspection, the nature of the inspection to the extent known by the employer, and a copy of the notice of inspection.

Employers are also required to provide "affected" employees -- those identified by an immigration agency's inspection results to be an employee who may lack work authorization or whose work authorization documents have deficiencies -- with copies of the notice of inspection upon request. Additionally, employers must provide affected employees and their authorized representatives with copies of the written immigration notice that states the results of the inspection as well as a written notice stating the obligations of the employer and affected employee arising from the results of the inspection, all within 72 of receipt of the notice. If possible, the employer must deliver these notices by hand and, if not, by mail and email. The notice is required to contain a description of any and all deficiencies or other items identified in the written immigration inspection results notice to the affected employee, the time period for correcting such deficiencies, the time and date of any meeting with the employer to correct deficiencies, and notice that the employee has a right to representation during any such meeting. Failure to provide these notices properly carries a penalty of $2,000 to $5,000 for the first violation and $5,000 to $10,000 for each subsequent violation. However, penalties are not to be imposed on employers who fail to give notice to an employee and the "express and specific direction of the federal government." In light of this new provision, employers should consult with their counsel to ensure that they provide proper and timely notices throughout this process and to ensure that any direction by the federal government not to give notice to employees is in writing.

Lastly, the act prohibits employers and those acting on their behalf from reverifying the employment eligibility of a current employee at a time or in a manner not required by federal law, including 8 U.S.C. Section 1324. This violation carries a penalty of $10,000. However, a violation under this section cannot also serve as a basis for liability under Labor Code Section 1019.1, which also carries a $10,000 fine and prohibits an employer from requesting more or different documents than necessary, refusing to honor documents that appear to be genuine, attempting to reinvestigate or re-verify an employee's authorization to work Notably, each of the above amendments contains exceptions allowing an employer to comply with a memorandum of understanding governing the use of the federal E-Verify system and for otherwise complying with federal law.

Employers should work with their counsel to adopt policies and procedures to ensure compliance with this new law and prevent liability. Additionally, when faced with a warrant, subpoena or other request to search a workplace or its records from an immigration agency, employers should carefully review their obligations under the act and work with their counsel to properly respond. Failure to strictly comply with these new provisions may result in up to $10,000 in fines and a civil action by the labor commissioner or attorney general.