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  1. #1
    Administrator Jean's Avatar
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    May 2006

    Immigration Audits Hurt Hispanic-Oriented Grocery Chains

    July 26, 2013
    By Katy Stech
    The Wall Street Journal

    Associated Press
    Victor Cristobal speaks at a news conference to protest Mi Pueblo Food Center’s use of the federal E-Verify program on Sept. 6, 2012, San Jose, Calif. The grocery store chain was criticized for participating in a federal program that checks the immigration status of prospective workers.

    Struggling from the fallout of federal immigration audits, two Southwest grocery-store chains have filed for bankruptcy protection with plans to reorganize.

    California’s Mi Pueblo grocery store operator filed for Chapter 11 protection on Monday after the 21-store chain was told to replace some of its 3,260 workers whose documentation came under review during a U.S. Immigration and Customs Enforcement audit, according to court papers filed with the U.S. Bankruptcy Court in San Jose, Calif.

    The chain—which stocks its shelves with imported foods from Mexico, South America and other countries for its primarily Hispanic customers—said in court papers that the federal audit led the company to struggle with higher payroll costs and training expenses as new workers have been brought on board, said bankruptcy attorney Robert Harris in court documents. The stores sell fresh tortillas, marinated cuts of meat and specialty cheeses from throughout Central and South America.

    That filing comes after executives at Pro’s Ranch Market put the company’s11 stores, which employ about 2,235 workers and are mostly located in Arizona, under bankruptcy protection in May. Besides a tough economy and growing competition, company officials said the company was also “effectively singled out for an immigration audit to which no other competitor was subjected,” according to documents they filed with the U.S. Bankruptcy Court in Phoenix.

    Pro’s Ranch Market said it had to lay off 300 workers—roughly 20% of its workers—in 2010 following an agency investigation that found some employees to be working in the country illegally, according to court papers. Many workers could only produce fake documentation when asked for papers that proved they were eligible to work, according to local reports.

    “The adverse, negative, and chilling effect of the perception in the State of Arizona towards immigrants and Hispanics, including the passage of [the] SB 1070″ law, contributed to the chain’s financial problems, company officials said in court papers.

    Both chains said they were the target of workplace audits from ICE, which conducted more than 3,000 worksite audits in the 2012 fiscal year. That’s slightly more than the 2,496 audits done the previous year, the agency said in a news release.

    Companies face fines for knowingly hiring and continuing to employ workers that can’t produce valid work papers. Violations range from $375 to $16,000 each, and such fines tallied to more than $12.4 million during the 2012 fiscal year, the release said.

    Neither company’s bankruptcy lawyers explained in court documents whether the companies had to pay fines in the wake of the audits.

    For Mi Pueblo, the cost of replacing workers put it out of compliance with the restrictions of its $19.6 million loan from Wells Fargo Bank WFC -0.32%, despite being the “fastest-growing independent supermarket chain in northern California,” Mr. Harris said in court papers.

    Mi Pueblo founder and chief executive Juvenal Chavez grew the chain from a 5,000-square-foot market in East San Jose he opened in 1991; last year, the company recorded sales of about $413.3 million, according to court papers. The chain has expanded in “locations that have been abandoned by large market grocery chains,” its officials said in court papers.

    But when negotiations with Wells Fargo stalled, the company turned to bankruptcy. The company’s Chapter 11 filing puts the dispute before Judge Arthur S. Weissbrodt, who has been asked to allow the chain to spend restricted money to continue paying employees and others throughout the case.

    “Failure to approve [that spending] will lead to a disruption in operations as employees leave, suppliers cease to deliver, and customers become dissatisfied and shop elsewhere,” Mr. Harris said in court papers.
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  2. #2
    Super Moderator Newmexican's Avatar
    Join Date
    May 2005
    Heart of Dixie
    Companies face fines for knowingly hiring and continuing to employ workers that can’t produce valid work papers. Violations range from $375 to $16,000 each, and such fines tallied to more than $12.4 million during the 2012 fiscal year, the release said.
    I guess hiring illegals is not so cheap after all. Now, they need to go after the farmers that complain that they can't do it without their illegals. They have been skipping out on FICA for years while their workers use Medicaid.

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