The recent Massachusetts special election for the U.S. Senate seat long held by the late Edward Kennedy refocused public attention on the policy priorities of the Obama administration. While health care was the leading policy topic, it is one of six major priorities that were shaken by the election of a Republican in what is considered one of the bluest states in the Union. President Obama’s winning margin in Massachusetts in the 2008 presidential election was more than 20 points.

Among the administration’s top priorities, immigration remains on track largely due to bi-partisan interest in Congress. While an immigration reform bill may be out of the question this year — major expansion of aggressive enforcement efforts is well underway. During the past year, the administration stopped showcasing “raids” at worksites as its primary strategy to deter the employment of unauthorized workers. Instead, it started demanding I-9 forms and other records that allow teams of analysts and agents to remotely measure employer compliance, identify unauthorized workers, and identify indicators of misconduct.

Fines being levied

Where technical compliance violations are discovered relating to Form I-9, employers are being fined. Where unauthorized workers are discovered, employers are being ordered to terminate those employees. Where indications of knowing employment of unauthorized workers are discovered, criminal investigations that may culminate with arrests of employees and employers will be pursued as well as fines and orders to terminate any unauthorized worker not arrested.

Immigration and Customs Enforcement (ICE) rolled out this change of tactics July 2009, with the announcement it served more than 650 Notices of Inspection on employers across the nation. Since then, more than 1,000 additional inspection notices have been served on employers. Although these inspections already have resulted in millions of dollars in fines, the biggest impact on employers with unauthorized workers is the loss of production workers coupled with the inability to replace them with other unauthorized workers. The government is following up with successive inspection notices until it is evident the employer has adequately improved its hiring practice.

To date, there are no known criminal cases that have resulted from this initiative, but it is too soon to tell if criminal prosecutions have been initiated and are ongoing. Criminal prosecution of employers remains the top priority for ICE’s worksite enforcement strategy, and it continues to train its agents on raid tactics for the purpose of supporting that goal.

Unauthorized workers an increasing risk

This means an unauthorized workforce is a critical risk factor. Ensuring technical compliance with Form I-9 requirements and participation in the E-verify program are important and good business practices that may mitigate relating fines, but neither will protect an employer from hiring unauthorized workers, because neither will reliably detect identity fraud. Employers will be forced to terminate their unauthorized workers after being served an inspection notice regardless of participation in these programs, other good faith efforts, or knowledge.

Monetary penalties for knowingly hiring and continuing to employ unauthorized workers range from $375 to $16,000 per violation, with repeat offenders receiving penalties at the higher end. Penalties for substantive violations, including the failure to produce a Form I-9, range from $110 to $1,100 per violation. In determining penalty amounts, ICE considers five factors:

  1. The size of the business
  2. Good faith efforts to comply
  3. Seriousness of the violations
  4. Whether the violations involved unauthorized workers
  5. History of previous violations

So, when a company like Pilgrim’s Pride recently agreed to pay a fine of $4.5 million for violations relating to the employment of unauthorized workers, this is likely to be the beginning, not the end, of a long-term relationship with ICE, in which the employment of unauthorized workers will not be tolerated.

The compliance game has changed

This is a game-changer from another perspective as well. The probability of an employer being targeted by the government has grown exponentially. The reason is that the government no longer needs an army of agents and massive detention facilities to engage employers who have hired unauthorized workers. All they need is a postage stamp. A few agents can effectively engage many employers. And, as the government brings on new personnel and resources already in the pipeline to expand their capacity — many more employers will be challenged.

By most estimates, at least 7.5 million unauthorized workers are employed in this country and largely work in the meatpacking, service, hospitality and construction industries. It is now a probability rather than a slight possibility that ICE will engage employers in those industries during the next three years. The sooner employers start managing risk associated with unauthorized workers, the better they can withstand ICE scrutiny. Diligent immigration-compliance programs that expose identity schemes used by unauthorized workers and technical compliance policies are the only defense against crippling government intervention.

Mark Reed, CEO of BMS, was the highest-ranking career government official within the Immigration and Naturalization Service (INS) during his career. At retirement, Mark directed border patrol, investigation, detention and removal, adjudication, and inspection operations from the northern to southern U.S. borders. Today as head of BMS, Mark is a knowledgeable and respected governmental insider. He advises many large companies in the areas of immigration compliance, policy and training. He also has a unique view into the world of key policy initiatives dealing with immigration issues and policy trends.