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Federal Government to Increase Oversight of Immigration Compliance by US Business

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The Trump Administration has promised to make immigration control a top priority.  Immigration control was among the most prominent issues to the Presidential campaign.  While new laws may make their way through Congress and will take time to be enacted and implemented, the federal government already has several statutes to use to control immigration, including the IRCA and the FLSA, discussed herein.  Specifically, government regulation of employment acts to curb the incentive for immigrants to enter the United States illegally by punishing employers.  Every business/employer that classifies workers as employees or independent contracts has to get it right.  The federal government uses completed I-9 forms to control and regulate immigration.  Employers must have their employees must fill out an I-9 form, but not independent contractors.  If workers are misclassified as independent contractors and an I-9 form is not generated, the federal government will penalize the business/employer for its error.

The penalties imposed by the government can be severe.  For example, on December 29, 2016, a Final Decision and Order levying a $58,950 fine was entered against a restaurant business for 107 violations I-9 compliance requirements.  The federal government had originally sought a fine of $96,398.50.    

There are penalties for hiring illegal aliens, thereby denying citizens and legal aliens employment.  Compliance with federal regulations regarding I-9 forms is important. Claims that employers are hiring illegal aliens are investigated by Immigration and Customs Enforcement (“ICE”), a division of the Department of Homeland Security.  If a business objects to the fine or sanction sought by the ICE, the ICE becomes the “prosecutor” of the claim.  More information on this process can be found here.  Individuals can also prosecute claims for monetary (money) damages although such claims are rare.  The authority for these claims is the IRCA, which is an acronym for the Immigration Reform and Control Act of 1986, found in the federal statutes.

The specifics of the illegal conduct are important to know, and will be discussed in detail in later posts.  Also important are the penalties.  Penalties include fines that are tiered according to conduct, as well as back pay for citizens who are the victims of discrimination.  Individuals as well as the Department of Homeland Security, Immigration and Customs Enforcement can pursue businesses for these civil fines. 

In extreme cases, ICE can also seek criminal sanctions against businesses and business owners, including prison.  Business owners and managers would do well to read the statute itself or seek guidance from legal counsel to understand the full extent of possible government action against them.  The IRCA acts to curb illegal immigration by penalizing businesses that recruit or employ illegal aliens.

Another act of Congress, the FLSA, is used to control illegal immigration.  The FLSA is an acronym for the Fair Labor Standards Act.  The statute, on its face, does not appear to pertain to immigration.  However, the FLSA is a longstanding statute that has always been used by the U.S. Department of Labor to impose minimum wage and overtime controls on businesses that employ illegal aliens.  The idea is to discourage the practice of employing illegal aliens.  Overtime and minimum wage law are imposed on all employees, citizen and non-citizen, so they are equally situated.  If all potential employees are equally situated there is no reason for a business to prefer one over the other.

The FLSA applies to workers that are employees, not workers who are independent contractors.  This creates an incentive for business to hire independent contractors to avoid the FLSA.  However, the government utilizes a criteria for distinguishing employees versus independent contractors, regardless of the label applied by a business.  Businesses that misclassify their workers subject themselves to claims by the Department of Labor, as well as claims by the workers themselves.  This risk of misclassification can be significant.  Even illegal aliens can pursue lawsuit in an American court. The FLSA is meant, in part, to control the flow of immigration by discouraging businesses from employing illegal labor and is often an underappreciated enforcement tool used by the federal government.

All business owners and managers should understand these laws and how they are used, in anticipation of increased enforcement under the coming federal Administration, or seek the advice of legal counsel pro-actively to ensure sound business practices and a business culture of compliance.

If you have any questions about these laws, contact Ed Beckmann.