On Sep 01 2006 by William A. Stock

“The ICE-Man Cometh” Part One: Immigration Enforcement Strategies Raise Stakes for Employers

Note: this is the first of two articles examining what all employers need to know about the new "interior enforcement strategy" being implemented by the Department of Homeland Security.

What do the owners of a Buffalo, New York cleaning company; a Wichita, Kansas manufacturing company; a Lexington, Kentucky hotel; a Fairfield, Ohio restaurant; and a Springdale, Arkansas homebuilder all have in common? In the last few months, all of them have been arrested and charged criminally because of illegal workers employed in the small businesses they own. These charges are part of a strategy by the Immigration and Customs Enforcement bureau (called “ICE”) of the Department of Homeland Security that targets companies in violation of the Immigration Reform and Control Act of 1986.

Employer’s Obligations for Immigration Enforcement

Since 1986, employers have had an important role in the government’s strategy to deter illegal immigration to the United States: every employer has to verify the identity and employment authorization of each employee it hires. The obligation to verify employment eligibility of new hires was coupled with penalties for failing to perform that verification, or for knowingly employing unauthorized workers. The civil penalties administered by the former Immigration and Naturalization Service (INS) were relatively small, however. A failure to complete correctly the Form I-9 on which a new hire’s employment eligibility and identity are verified could bring a fine of $1000 per violation. If the employer knowingly employed an unauthorized worker (including by failing to complete an I-9 for a worker who was not authorized by work), the fine rose to $3000 per violation. The maximum fine possible per violation was $10,000, if the employer was a repeat offender. INS could also request that the U.S. Attorney bring misdemeanor criminal charges against any employer who engaged in a “pattern or practice” of hiring of illegal workers.

During the 1990’s, there was little incentive for INS to conduct investigations of employers. US Attorneys were reluctant to bring criminal charges in the face of heavy caseloads of drug- and firearms- related crimes. When INS brought civil fine proceedings, employers could often defend themselves against charges of illegally employing foreign workers by pointing to properly-completed I-9 forms that were based on genuine-looking, but fraudulent, documents, so that the employer had satisfied its obligation. The fine levels were so low as to provide little deterrent effect, and INS focused its relatively limited enforcement resources on identifying and removing foreign nationals convicted of crimes in the United States, rather than employers of illegal workers. In those few instances where INS did conduct effective enforcement actions, public outcry against their tactics (such as arresting most of a restaurant’s cooking staff in the middle of lunch) let to a backlash against worksite enforcement, and it dropped to the bottom of the agency’s domestic enforcement priorities.

In the immediate aftermath of the September 11 attacks, worksite enforcement became one of many other legal tools rediscovered by Homeland Security and other enforcement agencies. Along with the detention of foreign nationals from predominantly Muslim countries for immigration violations and denial of immigration benefits to foreign nationals for technicalities such as failure to report a change of address, worksite enforcement was used to “protect critical infrastructure” by closely auditing the I-9s of companies doing business in airports, landmark buildings, and other potential targets. The result was the arrest and deportation of foreign nationals who had presented false documents to get jobs as cooks, janitors and clerks in those facilities.

Raising the Bar on Enforcement

Employers might not need to take notice if the government’s enforcement activities were limited to those few employers who employed workers in “critical infrastructure” sites; however, recent changes both in the frequency and vigor of ICE’s “interior enforcement” strategy make immigration compliance an important consideration for every employer. The centerpiece of ICE’s current “interior enforcement” strategy is to target aggressively those employers who have hired a number of illegal workers, and use criminal law tools, rather than the “employer sanctions” civil fine system, to punish employers and managerial employees in the human resources function. ICE now has the full support of the US Attorneys in many parts of the country in bringing such criminal actions, which are seen as a more effective way to deter unlawful hires than civil fines, since the prospect of criminal indictment and civil forfeiture proceedings raises the stakes for employers whose workforce includes workers without authorization.

ICE and the US Attorneys have a number of criminal law tools at their disposal beyond the misdemeanor charges available under the Immigration and Nationality Act for a “pattern or practice” of hiring workers without authorization. A popular tactic around the country has been to indict owners and supervisors for “alien harboring,” a felony charge, which only requires the government to prove that the employer “encouraged or induced” a foreign national to reside in the United States without authorization. Prior to 1986, “alien harboring” could not be predicated merely on the act of employing an unauthorized worker; that proviso was eliminated in 1986, but felony alien harboring charges against employers were quite rare until recently. Managers at a number of companies have now been charged under that provision, and where employers have provided transportation to and from work for illegal workers, they have also been charged under the “alien harboring” provision that prohibits transportation of illegal workers within the United States.

Beyond the criminal provisions in the Immigration and Nationality Act, the government has been using other charges that can be made out in a situation where the employer has relied on false documentation, such as criminal misuse of a Social Security Number; false statements on an immigration-related form; making false statements to government officials; and identity theft. US Attorneys will also use forfeiture provisions available under a variety of statues to try and seize business assets, on the theory that the illegal employment of workers resulted in the employer’s profits from a “criminal enterprise.”

Recent Cases

It remains to be seen, however, whether ICE will be able to obtain convictions of employers using these tools. ICE recently failed to obtain a conviction against Tyson Chicken after that company was indicted for an alleged pattern of encouraging managers to hire unauthorized workers. The case demonstrates that it can be difficult for the government to prove employers –particularly employers with well-established hiring protocols that comply with the I-9 regulations – have deliberately set out to employ workers who have no authorization. Certainly, the existence of a well-established and implemented hiring policy may help insulate the company from charges against it, and lower the government’s interest in proceeding against that employer criminally.

ICE may not actually need to obtain convictions to achieve the desired deterrent effect, though: last year Wal-Mart agreed to pay the government $11 million to avoid prosecution and settle charges that it had knowingly used subcontractors who employed unlawful workers (charges the company denied). Even the prospect of criminal indictment followed by acquittal – when the employer is sure it has complied with the law, but been fooled by phony documents – should be enough to make employers review their current hiring practices.

Recommended Actions

The promise of the “Employment Eligibility Verification” process was to cut off the “magnet” of employment to potential illegal immigrants. That promise has not been realized – current estimates put the population of noncitizens without legal status at eleven to twelve million. ICE’s current campaign of aggressive criminal enforcement, however, presents employers with the promise of much harsher sanctions. In response, employers should take a much more active role in ensuring that their workforce has no illegal workers. Over the last year, ICE has greatly increased both the frequency of its workforce enforcement activities and the severity of the sanctions it is seeking against employers and their managerial staff personally. In response, employers should review their current employment eligibility verification practices; audit their compliance with respect to their current workforce; and ensure that all staff involved in hiring are trained in their obligations and how to verify the employment eligibility of new hires without opening the employer to charges of discrimination.

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The Legal Intelligencer
September 2006

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Part Two