Do Employers Face Consequences for Hiring Unauthorized Workers?

Employer Investigations Take Time

​"There is no doubt that the companies are under investigation by Immigration and Customs Enforcement [ICE]," said Bruce Buchanan, an attorney in the Nashville and   Atlanta offices of Sebelist Buchanan Law and co-author of The I-9 and E-Verify Handbook (Alan House Publishing, 2017). "If not, ICE would not have sought or received criminal search warrants."

Those warrants show that federal agents suspected the companies of willfully hiring and employing undocumented workers, predominantly a civil offense under federal law.

ICE Acting Director Matthew Albence has stated that anyone, including employers, found to have broken the law would be held accountable, but Mike Hurst, the U.S. attorney for the Southern District of Mississippi, declined to comment on whether any employers will be charged, citing the ongoing investigation. Hurst said employers will be prosecuted if it's proven beyond a reasonable doubt that they violated the law.

"ICE agents are carefully analyzing the documents obtained from the companies through criminal search warrants," Buchanan said. "I fully expect a number of indictments against managers of these plants. As for the owners, the government will need to show their involvement and knowledge of the hiring and employing of undocumented workers."

It could take months or years for federal agents and prosecutors to review evidence  seized from the companies to determine whether the employers should face charges, said Julie Myers Wood, CEO of investigative and compliance consultancy Guidepost Solutions and former director of ICE under President George W. Bush.

Workplace raids became a hallmark of the Bush administration, but the enforcement policy shifted under President Barack Obama in favor of Form I-9 paperwork audits.

Criminal charges can be brought against managers and business owners, and large numbers of unauthorized workers can be identified and potentially removed during worksite raids, but building criminal cases requires time and detailed investigative work, Wood explained.

"However, we are seeing more use of undercover agents at worksites and workers cooperating with the government as witnesses, which may lead to quicker employer prosecutions," she said.

Civil penalties for employers hiring or continuing to employ undocumented workers range from as low as $573 per unauthorized employee for a first offense to $22,927 per employee for second and third offenses. Employers can face criminal charges, and owners and managers can face up to six months in prison if a pattern of hiring unauthorized workers is established.

Criminal Prosecutions Against Employers Are Rare

​The companies in this case may be more likely to face prosecution due to the degree of evidence against them, revealed in court documents, and the high-profile status of the raids.

But overall data shows that criminal prosecutions of employers who knowingly hire undocumented workers are rare, and most that are convicted receive little more than token punishment. Since criminal penalties against employers for hiring undocumented workers were enacted in 1986, the number of prosecutions have rarely surpassed 15 per year, according to an analysis by Syracuse University.

Department of Justice data analyzed by the Transactional Records Access Clearinghouse at Syracuse show that criminal prosecutions against employer representatives for hiring undocumented workers have never exceeded 20 per year, except during 2005 under George W. Bush and in 2009 under Barack Obama.

The numbers have held steady under President Donald Trump, even as almost every other enforcement measure has surged. From April 2018 through March 2019, 11 individuals representing employers were prosecuted for hiring workers without proper documentation. Of those, only three were sentenced to prison time.

The ‘Knowingly’ Standard

​The main reason for the lack of employer prosecutions is that an employer violates the  law only when it "knowingly" hires or employs undocumented workers. "The presence of unauthorized workers does not necessarily mean that the employer committed a crime," Wood said. "It must be shown that the employers knowingly engaged in the activity. But given the prevalence in fraudulent documents and the gaps in E-Verify, it can be very hard for employers to ensure they have an authorized workforce." 

Buchanan explained that the employer needs to have either actual or constructive knowledge that the individual being hired is an undocumented worker. "That's not easy to do," he said. "The law states that HR is required to accept workers' employment or identification documents if they appear genuine and relate to the person. HR is not trained to nor are they supposed to investigate phony identity documents. And prosecutors can't build a criminal case of off saying that HR should've known those documents were fake. It takes a lot more than that."

Wood explained that ICE seeks to hold management liable if possible. "When I was at ICE,  we tried, but it was very difficult to hold employers liable under the law because the 'knowingly hired' standard is a very high standard. To show managers are involved takes finding e-mails, cooperative witnesses and hiring patterns."

The "knowingly" language has not only spawned a cottage industry for fake documents, but it has also led some employers to engage in layered hiring—using staffing agencies and contractors who hire subcontractors—to shield themselves from knowledge of foreign workers' employment authorization status.

E-Verify Is Not Enforced

​Mississippi has required all employers to use E-Verify—the federal government's electronic employment eligibility verification system—since 2011. E-Verify compares information on a person's Form I-9 to government records to make sure he or she is authorized to work in the United States.

One glaring hole in the system is that it, too, is susceptible to identify fraud. The Mississippi plants could have been using E-Verify in good faith, but workers can present documents of people authorized to work in the country as their own, Wood said.

But the recent raids bring up another curious matter. A 2018 analysis by Bloomberg found that E-Verify enforcement in the eight states (Alabama, Arizona, Georgia, Mississippi, North Carolina, South Carolina, Tennessee and Utah) that require private-sector employers to check the legal status of new hires is next to nonexistent.

Only South Carolina conducts audits, asking for lists of hires and proof of verification, according to Bloomberg. The state cited over 1,600 employers from 2013 to 2017 for violations, but none were punished beyond having to submit quarterly reports for a year.

It's rare for private-sector companies not covered under the E-Verify federal mandate for federal contractors to have lost a business license or even been assessed any fines for hiring workers who are not authorized to work in the U.S.

The Department of Homeland Security (DHS), which oversees E-Verify, will generally not get involved in enforcement unless the company is covered under the federal mandate, Wood said. The department collects data on program participants, however. For example, the data show that Georgia has enrolled over 100,000 businesses in the E-Verify program—the most in the country—but only 23 percent of them used it in 2018.

"It's not unusual for states with limited resources to spend their budget on other priorities, and I think they probably could do more to work with the federal enforcement agencies," Wood said. "But I would argue that these state requirements have already had a positive effect just by getting more employers to enroll in the program."

Precedent for Consequences

​Immigrant worker advocates have expressed frustration that plant managers were not led out of the Mississippi facilities in handcuffs on the day of the raids, but experts say that it's just a matter of time. 

John Sandweg, former acting ICE director during the Obama administration and practice leader of law firm Nixon Peabody's cross-border risks team, said it appeared likely that company representatives from the Mississippi plants would eventually face criminal charges. "I don't think it's fair to say that the employers will get left off the hook—I suspect they won't be," he said. Wood and Buchanan agreed.

"In large-scale fraud investigations at [tree-trimming company] Asplundh and [trash removal company] Waste Management over the past few years, managers have been convicted and served time in jail," Buchanan said.

A high-profile 2018 workplace raid at Southeastern Provision slaughterhouse in Bean Station, Tenn., resulted in the owner, James Brantley, pleading guilty to knowingly employing undocumented workers and committing tax fraud. He paid $1.4 million in restitution and is serving 18 months in prison.

In 2008, Howard Industries, one of Mississippi's largest employers, pleaded guilty to knowingly employing hundreds of undocumented workers at the company's electrical transformer plant in Laurel. The company agreed to pay a criminal fine in the amount of $2.5 million, and the plant's former HR manager received a six-month sentence of house arrest.

But the research shows the more common outcome is a settlement in which the offending company pays a fine and agrees to adopt measures like using E-Verify.