Employers' Obligations to Verify Employability of Aliens; Consequences of Failure

By Gerald P. Panaro, Esq., Howe & Hutton, Ltd.

With all the debate about illegal immigration and employers’ central role in it, the time seems opportune to review employers’ existing obligations to verify employability under the Immigration Reform and Control Act of 1986 (IRCA) and to explain the consequences of failing to comply with those obligations.

IRCA makes it unlawful for any employer (no minimum number of employees required) to employ, or to continue to employ, an alien whom it knows is unauthorized to work in the US. There is a separate provision in IRCA prohibiting discrimination based on national origin or citizenship status; this provision applies only to employers with four or more employees.

Under the regulations implementing IRCA, the employer has three basic obligations: See that the new hire completes Section 1 of the Form I-9; complete the employer’s section of the I-9 (Section 2); and “physically examine the documentation presented by the individual” that establishes his/her identity and employment eligibility. The obligation to see that it does not employ “unauthorized aliens” is ongoing: that is, the regulations state that an employer who continues to employ an employee, “knowing that the employee is or has become an unauthorized alien”, is in violation of IRCA.

It is important to note that under IRCA, the employer’s obligations are limited to a physical examination of documents that appear to be genuine. Within three business days of the hire, the employer must “[p]hysically examine the documentation presented ... and ensure that the documents presented appear to be genuine and to relate to the individual; ...”. The regulations do not require the employer to verify or authenticate the authenticity of the documents; only to examine them, to see that they appear to be bona fide.

In fact, the regulations establish a “good faith defense”: “An employer ... who shows good faith compliance with the employment verification requirements ... shall have established a rebuttable affirmative defense that the person ... has not violated ... the [Immigration Reform and Control] Act ...”.

Nonetheless, IRCA does impose both civil and criminal penalties for noncompliance. Any person “which engages in a pattern or practice of violations” of the law may be fined not more than $3,000 for each unauthorized alien, imprisoned for not more than six months, or both. The regulations define “pattern or practice” to mean “regular, repeated, and intentional activities, but does not include isolated, sporadic, or accidental acts”.

Civil penalties (fines) may be imposed for violating the law. Under this provision, either the INS (Immigration and Naturalization Service) or an ALJ (administrative law judge), if the employer requests a hearing, may fine an employer anywhere from $275 to $11,000 for each unauthorized alien, depending on the circumstances:

First offense: $275 to $2,200 for each unauthorized alien
Second offense: $2,200 to $5,500 for each unauthorized alien
Third/more offense: $3,300 to $11,000 for each unauthorized alien

Before the fines can be imposed, however, there must be a finding that the employer knowingly hired an unauthorized alien. The employer may also be subject to a “cease and desist order” (i.e., stop hiring unauthorized aliens), an order to comply with the law, and “such other remedial action as is appropriate.”

There are also fines for failing to comply with the I-9 requirements: the range is from $110 to $1,100 for each individual. In this instance, the regulation sets forth the criteria that the INS or the ALJ is to consider in determining the size of the fine:

Size of the business
Good faith of the employer
Seriousness of the violation
Whether or not the individual was an unauthorized alien
Employer’s history of previous violations

Finally, in “pattern or practice” violations, the Attorney General can sue the employer in federal district court and ask for such relief as a permanent or temporary injunction, restraining order, or “other order against the person or entity, as the Attorney General deems necessary.”

In truth, however, civil fines and penalties are an empty threat and do not appear to serve any deterrent effect. Despite the de-emphasis of civil fines under IRCA, employers should be aware that if they do become the subject of enforcement action, there may be individual liability for the penalties. This is demonstrated by Steiben v. I.N.S., 932 F.2d 1225 (C.A.8, 1991), in which the court held that the proprietor and chief executive officer of a restaurant was himself liable for $5,250 in sanctions imposed on him and his restaurant by INS. (As of 2003, the INS, which was responsible for enforcement of the civil fines under IRCA, was reorganized into the Immigration and Customs Enforcement branch of the Department of Homeland Security.)

Precisely because the system of imposing civil fines proved to be so ineffective and virtually no deterrent, the government has changed its tactics and, arguably, the stakes are much higher now for hiring and employing illegal aliens, at least when such hiring is deliberate. ICE has adopted a new strategy which now focuses on extensive investigations and criminal charges, and not just the old violations. Here are some examples of the new strategy:

Thirty-four illegal workers at a landscape nursery in Buffalo, New York were apprehended, detained and voluntarily repatriated to Mexico within 24 hours
1,187 unauthorized workers were apprehended at the worksite locations of a national company throughout the United States. Defendants were charged criminally with conspiracy to transport and harbor unlawful aliens for financial gain and for document fraud
Eighty-five unauthorized workers from one contractor and other subcontractors for a home building company were arrested. Five supervisors were arrested and charged with harboring illegal aliens. Eighty of the illegal workers were detained and 12 were deported. (In this case, the targets of the investigation knowingly harbored, transported and employed undocumented aliens.)
ICE is identifying and seizing the assets that employers derive from knowingly employing illegal workers, in order to remove the financial incentive to hire illegals and to pay them substandard wages

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