LC Landscaping & Maintenance of Murrells Inlet is one of the first in the state to have been found to knowingly and willingly employ illegal workers under the S.C. Illegal Immigration Reform Act.
This week, the landscaping company reached a settlement agreement with the state about the violation, agreeing to a series of stipulations but avoiding the most serious penalty of a business license suspension. The violation is rare, one of two since the law was applied to businesses of all sizes on July 1.
The violation comes as the state government may consider additional immigration laws, but officials say that compliance with the current rules has been better than expected. Business leaders say companies had to get educated but are trying to follow the law.
On Oct. 26, following a complaint, the Office of Immigrant Worker Compliance, part of the S.C. Department of Labor, Licensing and Regulation, did an inspection of LC Landscaping's compliance with the immigration law that went into effect for businesses with more than 100 employees on July 1, 2009, and for all businesses on July 1.
During the inspection, the company's owner, Craig Collins, admitted to knowing that one of his employees was not authorized to work in the United States, according to a settlement agreement between the company and S.C. LLR. The employee told Collins when he was hired that he wasn't authorized to work but Collins employed him in one day increments about 20 times beginning in January 2010, according to the agreement.
Collins declined to comment.
In November, the company received a citation and was notified that it would have to pay a $300 penalty for failing to authorize an employee and that the state had determined that it had knowingly or intentionally employed an unauthorized worker. Collins was given the opportunity to present evidence for consideration as the agency proposed disciplinary action, according to the agreement.
The company and the state agency agreed that the company has corrected the problems and fired all workers who are not authorized to work in the U.S., according to the agreement.
The agreement further said that the company's business license would be suspended for 10 days with an immediate stay, meaning that the business can continue to operate. The company will be on probation for six months and must complete a self-audit of all employees, including those hired before the law went into effect, which must be submitted within 30 days. The company has to pay a $250 reinstatement fee, will have two unannounced audits within six months and must submit a complete list of all new hires every two months for at least six months.
The company agreed to the terms and signed that it understood that failure to comply will result in the stay being lifted and the company's business license being immediately suspended for 10 days.
The Murrells Inlet company's violation came nearly six months into the full enforcement of the illegal immigration act. The state agency that oversees compliance is surprised at how well companies are following the rules.
The law created new rules that require employers to verify every new worker's immigration status and penalizes businesses that knowingly employ illegal immigrants.
Between July and the end of December, the state completed 1,800 audits focusing on small businesses, and between 88 percent and 90 percent of the employers have had no violations. Most of the violations have been employers that didn't verify a new hire within five business days or didn't use an acceptable form of identification. Most of the employers who violated the law came into compliance within the allowed 72 hours and did not have to pay fines.
"That's much better than we had expected," said Jim Knight, a spokesman for the state Department of Labor Licensing and Regulation and the administrator of the Office of Immigrant Worker Compliance. "We had 90 to 92 percent compliance among large businesses the first year, and so we felt that the rate would be much lower than that among small businesses because large businesses have human resources staff that keep up with changing laws and are members of trade associations where they get information about new laws that impact them, and small businesses aren't as plugged in as big businesses."
The state has collected about $1,500 in fines since July and has had to move to suspend the business license of two companies for 10 days, the Murrells Inlet company and Monterrey Mexican Restaurant of Killian L.L.C. in Columbia.
"I think we have a pretty good compliance rate at this point [but] that does not mean that there are still not employers out there that are still failing to comply with the law," Knight said. "We will continue to do our audits of businesses, we will continue to respond to complaints, and we'll continue to try to educate employers about their responsibilities under the law. Hopefully our compliance rate will improve."
Businesses in industries that have typically or historically employed immigrants, such as landscaping, construction or hospitality, are being targeted by auditors, Knight said.
Stephen Greene, president and CEO of the Myrtle Beach Area Hospitality Association, said that he doesn't think the area will see more violations than other parts of the state and added that most businesses know about the regulations.
"I don't think it's going to be a large issue or an issue more here than anywhere else," he said.
Greene said his organization and many others sponsored seminars and provided information to businesses before the law took effect. He said there was a lot to educate businesses about, especially small businesses, and there were some questions about how all the verification had to be done.
"I think obviously they want to ensure that they are in compliance with this," he said. "They realize that this could have an impact on their business, and they want to make sure their employees are properly documented, and I think they take it very seriously."
Mark Nix, the executive director of the Home Builders Association of South Carolina, said that the organization provided education for members and gave them the guidelines about how to comply.
Many of the organization's members favor strong immigration laws, Nix said.
"They have the impression, 'the reason that I didn't get this job was that my competition was [hiring immigrants],'" he said.
Melissa Azallion, a lawyer with Nexsen Pruet, said there has been some confusion from the immigration law, mainly because it differs from federal requirements.
Some employers initially thought that if they were following all of the federal government requirements for immigration status verification, they would be abiding by the state law, but that is not correct. Federal law requires an I-9 form, and the state law requires employers to verify immigration status either with a valid driver's license or ID from accepted states or by using the federal e-verify program.
"The confusion comes in when employers don't realize there are two separate laws with different requirements," Azallion said.
Azallion has represented several companies that have been found to have violated the law, but all fixed the problems within the 72 hours allowed by the law and avoided a penalty.
"I think it's made employers more aware about what their immigration obligations are," she said.
Azallion said immigration reform should happen at a federal level to avoid conflicts with various state laws.
The existing law doesn't create many problems, but a bill filed in the state legislature, Senate Bill 20, which addresses some immigration reform issues, could conflict with federal laws, she said.
The bill would direct law enforcement officers to verify a person's immigration status if they are stopped or arrested, amend existing law to make it illegal for an undocumented immigrant to try to get work and create more procedures for verifying immigration status.
Parts of the bill are similar to parts of the controversial Arizona immigration law that have been struck down by the courts, Azallion said.
"There's a lot of national activity on the issue, and I think it will just be interesting to see how it all unfolds," she said.