“This letter serves as advance notice that ICE has scheduled a review of your forms.”

These words from a Letter of Inspection sent by the U.S. Immigration and Customs Enforcement (ICE) department are among the most feared in the quick-service industry, perhaps second only to those found on an Internal Revenue Service audit letter.  

Today, there is increased pressure for quick-serve operators to be informed on the issue. As Chipotle discovered in 2011, when hundreds of its workers were found to be illegal immigrants, any quick-serve company not in compliance with the law faces the possibility of harsh fines and even harsher negative press. Being informed about Employment Eligibility Verification, or I-9, forms, however, can be harder than it sounds. There are 150 possible mistakes on a single form, 69 pages of instructions, and potential fines of $110–$1,100 per form.

“The I-9 instruction booklet is notoriously complicated and fine amounts are astronomical—they’re unreal,” says Mary Ellen Reihsen, an immigration law attorney at Foley & Mansfield, a national law firm. An I-9 form can only be fined once, Reihsen points out, but an employer with 180 employees might have 180 violations with one consistent error.

High industry turnover and an immigrant population ready and willing to fill hourly positions make for a potent and charged problem, says James Sinclair, national restaurant consultant with OnSite Consulting. “It’s super scary,” he says. “Restaurant owners are in a crisis. Documented workers simply aren’t applying [for jobs] or small restaurants can’t afford the costs associated with job recruitment for what tend to be low roles.”

If it seems fast-food restaurants are particularly an audit target, it’s because they probably are, one consultant says.

“They’re low-hanging fruit,” says Hannah Woolsey, another attorney who practices immigration law at Foley & Mansfield. ICE officials, she says, know hospitality, construction, and service industries have lower-paid workers and high turnover, and therefore have an increased likelihood for noncompliance or technical violations.

Christine San Juan, vice president of people development for Boloco, also believes restaurants can be high-visibility targets. “I think 20 units for a chain seems to be an audit trigger, and if there is a lot of buzz around your concept, you’re going to bring attention to yourself,” she says.

As Boloco, which has 18 units, prepares to open three new stores in cities with diverse labor pools, the issue has been top of mind, San Juan says. But the company made a conscious choice to comply even before it could become an issue. “I’d rather get to the dance before I’m forced to go,” she says. “We just make compliance a habit.”

Woolsey says operators who aren’t in compliance aren’t always just trying to dodge a law, but rather face operational challenges; most can’t afford human resource departments that can help protect them, she says. “They’ll assign [compliance to] someone and assume they’re doing their job. It isn’t until they’re issued an Intent to Fine [letter] that they have any idea there is a problem.” An Intent to Fine letter is issued when verification violations are detected.

However, some operators, Woolsey says, are willing to roll the dice. “They assume they have undocumented workers, but can’t find anyone else to do the job.”

“Most businesses want to do the right thing,” Sinclair says. “Owners aren’t walking out there saying, ‘I am actively seeking undocumented workers.’”

Still, quick serves must do everything in their power to comply, Reihsen says, or expose themselves to huge risk. “[ICE] doesn’t need a reason to audit,” she says. “Their job is to make sure undocumented workers are not working illegally.”

If targeted for an audit, a restaurant will receive a Letter of Inspection and has 72 hours to gather and produce documentation, the experts say. Whether those 72 hours are peaceful or panicked depends on an operator’s approach to compliance detail and record keeping.

Boloco opted to sign on with E-Verify, a verification service provided by the Department of Homeland Security, and outsourced much of its onboarding and selection process to PeopleMatter, a talent management solutions firm that specializes in service industries. ICE, meanwhile, offers a voluntary certification program called the ICE Mutual Agreement between Government and Employers (image) to encourage a culture of compliance. The certification process requires training, an audit, and participation in E-Verify. In return, participants earn a two-year stay from audits and minimum penalties for substantive violations.

Dani Bennett, public affairs officer for ICE, says the agency hopes responsible employers will want to ensure documentation compliance just as they do with IRS reporting.

Sinclair recommends developing an organized internal system. Operators should assemble a comprehensive packet of required documentation for every worker, he says. “That way, when ICE says, ‘Show me your data,’ you can say, ‘Gladly.’”

Operators who are put on notice should call an attorney immediately, Reihsen says. Even if funds are tight, she says, restaurants should “lawyer up,” insisting on counsel who practice I-9 compliance. This isn’t something to navigate alone, she says.

San Juan says restaurants must find ways to work within the system, and that best practices make for the absolute best defense. “We always have to weigh the expense against cost of getting audited and being unsuccessful,” she says. “It’s an insurmountable and staggering amount of money. How can you not afford to comply?” q