Ever since Donald Trump was elected President, businesses throughout the United States have expected a lessening of the pervasive regulatory regime in place under the Obama Administration. This expectation has come as a result of President’s Trump’s own rhetoric and comments by key members of his Administration. President Trump has publicly stated his opinion that “Excessive regulation is killing jobs.” In addition, White House Chief Strategist Stephen Bannon has voiced the goal of the “deconstruction of the administrative state.” However, employers should expect one major exception: immigration.
Under President Obama, the federal government attempted to overcome the Congressional gridlock preventing passage of new legislation through two primary means: 1) issuing executive orders directing administrative agencies to promulgate new, stronger regulations on key issues without the need of legislative approval; and 2) increased/stricter enforcement of existing laws and regulations. This strategy manifested itself in multiple ways. Wage and hour and other forms of employment-related audits and investigations increased considerably during President Obama’s terms in office. Additionally, President Obama’s Department of Labor promulgated changes to multiple significant regulations, including the near-doubling of the white collar exemption salary threshold and the narrowing of the “advice” exception to the Labor Management Reporting and Disclosure Act of 1959. With respect to immigration, President Obama stepped up audits of employers’ Form I-9 records to crack down on businesses employing illegal aliens.
Last year, before President Trump took office, the courts struck down the regulations affecting the white collar exemption and the advice exception issue. When President Trump took office, he instructed his administration to stop appealing those rulings. But not so for the immigration issues.
To the contrary, President Trump has already taken action with respect to immigration. On January 25, 2017, President Trump issued an Executive Order entitled, “Enhancing Public Safety in the Interior of the United States.” In this wide ranging Executive Order, President Trump set out the policy of the Executive Branch with respect to immigration, set enforcement priorities, and provided for a significant increase in the number of immigration officers. We believe this will significantly affect employers.
Specifically, President Trump’s Executive Order promises to “Ensure the faithful execution of the immigration laws of the United States, including the INA, against all removable aliens…” and “Make use of all available systems and resources to ensure the efficient and faithful execution of the immigration laws of the United States.” In furtherance of these and other policies set forth in the Executive Order, President Trump directed agencies “to employ all lawful means to ensure the faithful execution of the immigration laws of the United States against all removable aliens.” In conjunction with these goals, Section 7 of the Executive Order instructs the Director of U.S. Immigration and Customs Enforcement (“ICE”) to “take all appropriate action to hire 10,000 additional immigration officers.” Considering ICE employed nearly 12,000 agents in 2016, this is an increase of over 80%! This tremendous surge in immigration officers will mean the government will have tremendous resources at its disposal to crack down on employers who hire illegal aliens. We believe this crackdown will take two main forms.
WORKSITE RAIDS
Under the Trump Administration, we are already seeing a focus on worksite raids by immigration agents. Earlier this year, news outlets reported that ICE conducted raids in homes and workplaces in multiple states. For instance, the Chicago Tribune reported a statement by ICE that its worksite enforcement program will continue “the criminal prosecution of employers who knowingly hire illegal workers in order to target the root cause of illegal immigration.”
We expect this trend to continue. Along with possible repercussions stemming from being caught employing unauthorized workers, businesses may also experience loss of employees from the raids (and fear of more raids from other employees with immigration concerns), and loss of customers due to the bad press of being caught in government raids.
CONTINUED FOCUS ON I-9 AUDITS
Another notable provision of the Executive Order calls for the Secretary of Homeland Security “to ensure the assessment and collection of all fines and penalties that the Secretary is authorized under the law to assess and collect from aliens unlawfully present in the United States and from those who facilitate their presence in the United States.” This last part is particularly noteworthy for employers.
Penalties for committing employment-related immigration violations can be steep. Penalties for violating the law prohibiting hiring or continuing to employ individuals knowing they are (or have become) not authorized to work in the United States can range between $548 and $4,384 per unauthorized alien for businesses that are first time offenders, between $4,384 and $10,957 per unauthorized alien for second time offenders, and between $6,575 and $21,916 per unauthorized alien for businesses committing any further offenses.
In addition, there can also be penalties for paperwork violations – improperly filling out immigration-related employment documents. Failing to comply with Form I-9 employment verification requirements can result in fines between $220 and $2,191 per form. Even failing to inform the Department of Homeland Security of a “Final Nonconfirmation” of an employee’s employment eligibility can result in a $763 to $1,527 penalty per violation. A Final Nonconfirmation is a final case result in E-Verify which indicates E-Verify could not “verify an employee’s employment eligibility after an employee has visited a SSA field
office or contacted [the Department of Homeland Security].” Of course, criminal penalties of $3,000 per unauthorized alien can also be assessed against employers who engage “in a pattern or practice of hiring, recruiting or referring for a fee unauthorized aliens are also possible.”
Employment-related immigration penalties can add up quickly. For instance, Abercrombie & Fitch famously paid over $1,000,000 to ICE due to Form I-9-related issues.
Based on the Administration’s first 100 days, employers should take note. It is obvious the current Administration intends to continue or even expand further the increased rate of Form I-9 audits which began during the Obama Administration. In addition to stepping up worksite enforcement raids, we believe President Trump’s immigration strategy will also include a focus on investigating employers to ensure compliance with immigration-related verification, documentation, and recordkeeping requirements.
WHAT SHOULD EMPLOYERS DO?
We believe this Executive Order indicates a two-pronged approach to immigration enforcement in the employment context by the Trump Administration. Employers should expected both an increase in worksite enforcement raids and a significant amount of immigration-related audits. The 10,000 additional agents which the Executive Order empowers ICE to hire should provide the needed manpower to carry out this ambitious plan. To prepare, employers should consider conducting an internal audit to ensure their immigration-related practices are in compliance with all applicable laws and regulations. Of course, you must take care not to conduct an audit in a manner which could be seen as discriminatory or retaliatory – choosing which employees to audit based on citizenship status or national origin, for instance, could come with its own negative consequences. And all of this must be done in a way to avoid creating a record of non-compliance that a government audit would immediately uncover.
Last year, ICE released “Guidance for Employers Conducting Internal Employment Eligibility Verification Form I-9 Audits.” Employers would do well to review and familiarize themselves with it. Additionally, employers should also seek the advice of competent counsel to ensure their self-audits are useful without creating the smoking gun that the government audits are hoping to find.
This article first appeared in the September issue of Employment Law Strategist.
