Rustic Bakery, which operates four cafes in Marin County and a large production bakery in Petaluma, is struggling with layoffs that were mandated after an audit by U.S. Immigration and Customs Enforcement.

“Some of these people have worked for us for 14 years and are part of our family,” said Carol LeValley, the bakery’s owner and CEO. “It is extremely painful for them as well as us to adhere to what the government is asking us to do.”

LeValley said none of the employees who were deemed ineligible have been taken into custody by ICE, and the bakery has not been fined.

Lucia Martel-Dow, director of immigration and social services at the Canal Alliance, said she has received no reports of other Marin businesses being audited at this time.

The Immigration Reform and Control Act, adopted in 1986, requires employers to verify the identity and employment eligibility of their employees. Employers who do not adhere to the law can face criminal and civil sanctions.

ICE representatives did not respond to requests for comment.

In a press release issued on July 24, 2018, ICE announced a two-phase nationwide operation in which audit notices had been served to more than 5,200 businesses since January 2018.

On Feb. 2, 2018, the San Francisco Chronicle reported that ICE had initiated audits of 77 businesses in Northern California.

An ICE audit of Cavallo Point Lodge in Sausalito was initiated in early February 2018, Lydia Graham, a spokeswoman for the lodge, confirmed on Wednesday. Graham said so far the lodge has not been notified of any problems with its employees’ documentation.

The ICE release said the second phase of its operation, which involved 2,738 audits, began July 16, 2018.

LeValley said Rustic Bakery received its notice of inspection in July 2018 but didn’t get the results of the audit from ICE until the end of January, “because they did so many audits in July.”

In a press release issued on Feb. 13, ICE said that in fiscal 2018, it initiated 5,981 audits, compared with 1,360 audits in fiscal 2017.

“The audit did not find any fault with Rustic Bakery; our paperwork was all in line,” LeValley said. “We have the documentation that the employees provided to us. But unfortunately when the government audited the forms we found out that quite a few people’s documents were not correct.

“Some of our folks are here with green cards, some are in the DACA program,” LeValley said. “Of course, we hire plenty of people who present U.S. passports for their documentation.”

If an individual is not a citizen or a lawful permanent resident — the holder of a “green card” — they need a permit to work legally in the United States. Undocumented immigrants eligible for the Deferred Action for Childhood Arrivals program can obtain such permits.

LeValley declined to say how many employees’ documents were flagged by ICE, but said it was a “significant” number.

A message on the situation posted on the bakery’s website says, “These workers provided key kitchen, bakery and retail services and were paid a fair and living wage with benefits.”

After reading the message, Julie Mozena, a loyal Rustic Bakery customer, wrote in an email, “I go to their Marin Country Mart cafe a lot, and many familiar faces are missing. It’s so upsetting; it feels like we are slowly starting to live in a police state.”

LeValley said the bakery gave employees whose documents were deemed incorrect an opportunity to provide correct documents and some did so successfully.

“If they were unable to do that,” she said, “we had to terminate them with the idea that we would love to rehire them if they’re ever able to provide us with documentation that can be verified.”

LeValley estimated that so far the bakery has had to layoff about 20 employees. It is giving departing workers severance pay. Before the layoffs began the bakery employed 350 people.

In its July 2018 press release, ICE also stated that a U.S. District Court judge had issued a preliminary injunction “of the portion of California AB 450 preventing private employers from voluntarily cooperating with federal immigration officials conducting work site enforcement operations.”

Martel-Dow said that injunction remains in effect.

AB 450, known as the Immigration Worker Protect Act, prohibits employers from providing immigration enforcement agents access to employee records without a subpoena or judicial warrant.

The state law also requires that employers post notices about federal requests for employee records within 72 hours of being served and to post the results of immigration audits within 72 hours of receiving them.

Martel-Dow said the injunction covers the first prohibition but not the second one.

“That’s another challenge as business owner,” LeValley said. “We have criteria we’re supposed to be following for the federal government and criteria we’re supposed to follow for the state level.”

She said the layoffs are putting intense pressure on her business.

“We can’t offer the full menu we used to offer,” LeValley said, “and we are having to close our stores earlier because we just can’t staff them fast enough to fix this problem.

“To select one business and hold it up to this intense scrutiny isn’t really fair,” she said. “It really boils down to our government not having an immigration policy in place that makes sense.”