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How painful can it get? Penalties for immigration noncompliance

by Christine D. Mehfoud

Compliance-minded companies always want to know, “What’s the risk of noncompliance?” Or, put another way, “How much will it hurt if we don’t get it right?” For companies still wondering whether spending a little now to implement a solid immigration compliance program is a sound investment, some of the recent immigration-related penalties provide compelling reasons to invest in training and compliance. 

Remember—all employers have immigration-related compliance obligations regardless of whether they employ any foreign nationals. Some of the companies suffering significant penalties identified below never even had any unauthorized workers in their workforce but merely fell short on their obligation to verify employment eligibility (the Form I-9 process) or discriminated against certain individuals during the Form I-9 process.

Penalties imposed in any given case are always fact-dependent, and of course, the employer’s response to the investigation can significantly affect the outcome of any investigation. With that in mind, taking a look at the recent penalties imposed provides a good perspective of the risk.

Generally, immigration-related violations risk the following potential penalties:

  • Prison time (from up to six months for knowingly hiring an illegal worker to 10 years for harboring an illegal worker);
  • Civil fines (up to $16,000 per worker);
  • Asset forfeiture;
  • Debarment;
  • Loss of business license;
  • Lost productivity (for example, after a Form I-9 inspection in 2009, American Apparel lost 40 percent of its workforce and suffered significant financial losses that it attributed to lost productivity, causing its stock to drop 41 percent after reporting losses in the second quarter of 2010);
  • Attorneys’ fees;
  • Negative publicity; and
  • Often, other crimes such as tax fraud, Social Security fraud, money laundering, identity theft, bank fraud, and false statements are uncovered during what begins as an immigration-related investigation.

To put these penalties in real terms, see the examples from recent investigations.

Christine D. Mehfoud is an attorney with Spotts Fain in the firm’s Richmond, Virginia, office. Christine will be speaking on immigration issues at the annual Advanced Employment Issues Symposium in Las Vegas on Thursday, November 6. She will address the most complex immigration-related compliance challenges facing employers today and detail the legal steps for avoiding violations when hiring the employees you need. She may be contacted at cmehfoud@spottsfain.com.