After reviewing data related to time spent by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) unit on worksite enforcement, Acting Immigration and Customs Enforcement Director Thomas Homan issued a directive “to increase that [level of enforcement] by four to five times.” A review of Homeland Security Investigations (HSI statistics from the prior administration reveals that the number of employer audits reached a peak in 2013 with 3,127 nationwide, but by 2016, audits had dipped to 1,279 audits (down 59 percent). The ICE directive comes just after an announcement of the largest fine on the I-9 enforcement record, as well as the White House release of President Trump’s interior enforcement principles which include making participation in the now-voluntary E-Verify program mandatory. The distinct change in policy and the imminent exponential increase in employer audits have put I-9 compliance personnel on notice. Knowing some basics about the development of the I-9 related enforcement regime can help stakeholders gauge what to expect from the current administration that has vowed to “do it a little differently than we’ve done it.”

From Basic Administrative Procedure to Federal Felony Cases

In the initial days of I-9 enforcement, employers charged with violating prohibitions on unauthorized employment learned that faulty I-9 records could result in a prolonged administrative fines process that yielded civil penalties of varying degrees. Section 274A of the Immigration and Nationality Act establishes separate and escalating ranges of penalties for (1) failing to properly complete or maintain I-9 forms ($216 to $2,156); and (2) knowingly hiring, recruiting, referring, or continuing to employ unauthorized aliens ($539 to $4,313). (These fine amounts represent the new, higher penalties that went into effect on August 1, 2016, as part of the Bipartisan Budget Act of 2015.) Over time, though, the government observed that employers appeared to regard these monetary fines more or less as a “cost of doing business.” In a distinct paradigm shift, I-9 enforcement evolved from an administrative matter into an investigation with clear potential for full-blown criminal prosecution.

Comprehensive Layered Approach

Around 2006, the leadership of the U.S. Department of Homeland Security stated before a congressional judiciary subcommittee that it had learned from its mistakes regarding workplace enforcement and undertaken what it termed a “comprehensive layered approach.” ICE’s worksite enforcement strategy was to conduct investigations that would directly support felony charges and not just the traditional administrative proceedings set for under Section 274A. When the evidence gathered supported a federal criminal prosecution, ICE would work directly with the Offices of the United States Attorneys in subsequent court proceedings.

As part of its expanded model to increase the deterrent effect on employers, the government began to impose money laundering charges on seriously noncompliant employers. Most commonly identified with drug trafficking cases, money laundering is an auxiliary federal crime, used to amplify the seriousness of other federal, state, and foreign crimes (i.e., predicate offenses). It is principally designed to stop the flow of money to and from the predicate offense(s). Alien “harboring” is a predicate offense and is included on the “money laundering” predicate offense list. (“Harboring” provisions include conspiracy, and aiding and abetting. “Harboring” makes the violator criminally liable for encouraging or inducing an alien to reside in the United States, or knowingly or in reckless disregard of the fact that such residence violates the law.)

The money laundering statute is broadly construed and reaches any financial transaction that occurs with the proceeds of an unlawful activity. In contrast to civil liability, if convicted of money laundering, the criminal defendant forfeits and the federal government may seize any property involved in the crime. Property traceable to assets involved in the crime is also subject to seizure and forfeiture. Indeed, asset forfeiture is another key component in the ICE strategy to remove the financial incentive to hire unauthorized workers.

The comprehensive layered approach proved vigorous as ICE obtained over $31 million in criminal fines, restitutions, and civil judgments in worksite-related enforcement actions in fiscal year 2007. Fiscal year 2008 was even more brisk with ICE making more than 1,100 criminal arrests tied to worksite enforcement investigations, 135 of which were owners, managers, supervisors, or human resources employees who faced “harboring” and “knowing hire” charges and the related fines. The harshened consequences of noncompliance for owners as well as employees tasked with completing the I-9 form resulted in more robust I-9 compliance programs, training, and preventative audits performed out of an abundance of caution. This was encouraged by ICE as it published the ICE Mutual Agreement Between Government and Employers (IMAGE) best practices for employer compliance standards. Further, the approach may have encouraged some employers to join the E-verify program to take advantage of a perceived “safe harbor” provision against charges of knowingly employing someone who is not authorized to work.

Federal Contract Debarment

The federal contract debarment process has been another tool used to achieve I-9 compliance. The federal government can decline to contract with a business that employs an illegal workforce and “unscrupulously undercuts their competitors to gain an unfair market advantage because of reduced labor costs.” Contractors may be considered for debarment if they have been found to have either knowingly hired an unauthorized worker or continued to employ an alien who is or has become unauthorized. Debarred companies are prohibited from competing for new government contracts.

How Employers Are Selected for Investigation

The current administration has stated that ICE continues to utilize a multipronged approach for worksite enforcement that includes outreach. Generally, the post-September 11, 2001, enforcement focus shifted heavily towards monitoring employers tied to the U.S. infrastructure, such as those at airports, power and water sources, and military bases, but still used general leads. Cases involving national security or public safety implications receive top priority, as do investigations involving allegations of egregious worker exploitation, where the welfare of employees may be at risk. To date, ICE has not announced any specific official changes in worksite enforcement strategy and verification related to I-9 inspections.

Lead-driven cases are also generated by leads from other government agencies. For example, ICE has confirmed in the past that it has accepted leads from other agencies, such as the U.S. Department of Labor (DOL). DOL inspectors can review I-9 forms for basic compliance but do not pursue investigations into possible hiring violations. DOL inspectors can transmit a referral form to ICE identifying suspected violations and other relevant information.

Another example of interagency cooperation is found in the 2006 Memorandum of Understanding (MOU) between U.S. Citizenship and Immigration Services (USCIS) and ICE regarding the work of the Office of Fraud Detection and National Security (FDNS) that was formed to address national security and immigration benefit fraud concerns. The FDNS has oversight over issues of national security threats present in applications and the detection of immigration benefit fraud, all in cooperation with ICE.

Finally, employers participating in E-Verify should be aware of the Information Sharing Memorandum of Agreement between ICE and USCIS. The agreement outlines the coordination and management of referrals between USCIS’s Verification Division and ICE regarding the “misuse, abuse or fraudulent use of the E-Verify program and ICE requests to USCIS for Verification Information System (VIS) data with regard to ongoing ICE investigations.” This means that USCIS can send ICE information about data from an employer’s E-verify account when it appears to be the result of misuse, abuse, or fraud. USCIS has created a dedicated E-Verify monitoring and compliance office to review employer usage data, and in fiscal year 2015 this office engaged in 113,571 “compliance actions” and 965 “interagency actions.” The “interagency actions” signal a referral to ICE or the U.S. Department of Justice’s Immigrant and Employee Rights Section (IER) for noncompliance investigation.

What to Watch for

HSI currently has around 6,000 enforcement officers and 6,000 special agents. They are reportedly working on a hiring plan to add an additional 10,000 mandated officers and agents. Additional agents dedicated to enforcement, as well as the wide-ranging legal and interdepartmental and interagency tools described above, provide ample opportunity to expand enforcement activity as predicted by Homan. Employers should look to several sensitive points in compliance once they are certain that they have the basics under control.

  • Ensure that electronic I-9 data is fully compliant with the regulations and that the data is correct. ICE, IER, and any other authorized agency can ask for an excel spreadsheet to review I-9 and E-verify data. Data that is incorrect or illogical can cause negative outcomes in the government’s assessment of your compliance.
  • Many employers prepare procedures for the I-9 process and leave it at that; however, the E-Verify process merits its own set of procedures as well. Creating or updating E-Verify procedures will give the compliance team the opportunity to run through the procedures to ensure that its understanding of what is required is aligned with the true legal mandates of the E-Verify program, which can sometimes be confused with related I-9 procedures.
  • Statistics: Has the compliance team reviewed data for potential document abuse issues? This is one of the data mining analyses that the government can run on company information. If the data shows patterns of too many List A documents for lawful permanent residents, there might be an issue of document abuse alleged. Although that may not be supported by the totality of the evidence, it is important to know in advance what patterns are appearing in the data.
  • Continue to train I-9 and E-Verify staff. Even long-held rules for completing the form I-9 can change at a moment’s notice under new agency leadership. It is always important to have the compliance team engage in training on a regular basis. Training has always been one of the hallmarks of a compliant employer that ICE recognizes favorably.
  • The Trump administration has eliminated the Obama administration’s Priority Enforcement Program (PEP). Going forward there should be no expectation of PEP-related protections for individuals identified during an HSI inspection. ICE has informed employers that once it issues an I-9 notice of inspection, it cannot rule out an immigration raid on their premises, even absent a criminal investigation. For this reason, employers should ensure that their staffs are prepared to properly manage all forms of law enforcement encounters at the worksite.

A version of this article first appeared on Law360.