Employer Liability and Potential Penalties

• Author: Charles M. Miller/Daniel Brown/Marcine Anne Seid
• Profession: Founding partner of the Miller Law Offices, Studio City, California/Partner in Fragomen, Del Rey, Bernsen & Loewy LLP's Washington, D.C./Principal attorney of the Seid Law Group, Palo Alto, California
• Pages: 19-60

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2.01 INTRODUCTION

In 1986, the Immigration Reform and Control Act (IRCA) was passed by Congress, and

its employment verication requirements were incorporated into the Immigration and

Nationality Act (INA) in section 274A, 8 U.S.C. § 1324a. IRCA reformed the immigra-

tion law by making it unlawful for an employer to “hire, or to recruit or refer for a fee,

for employment in the United States an alien1 knowing the alien is an unauthorized alien

with respect to such employment.”2 The statute also makes it unlawful for an employer to

“continue to employ the alien in the United States knowing the alien is (or has become)

an unauthorized alien with respect to such employment.”3 An employer undergoing a

civil I-9 inspection can potentially face nes for two types of violations: knowingly hiring

or continuing to employ an unauthorized individual4 and/or failing to comply with the

employment verication requirements, otherwise known as paperwork violations.5

2.02 CIVIL PENALTIES: KNOWING HIRE AND CONTINUING

TO EMPLOY VIOLATIONS

The amount of civil penalties for violating INA § 274A is governed by 8 C.F.R.

§ 274a.10(b)(1). The regulation provides ve different penalty schedules, depending on

the date on which the violation occurred and the date of penalty assessment.6

1. “The term unauthorized alien means, with respect to employment of an alien at a particular

time, that the alien is not at that time either: (1) Lawfully admitted for permanent residence, or

(2) authorized to be so employed by this Act or by the Attorney General.” 8 C.F.R. § 274a.1(a).

2. Immigration and Nationality Act of 1952 (INA) § 274A(a)(1)(A); 8 U.S.C. § 1324a (a)(1)(A).

3. INA § 274A(a)(2); 8 U.S.C. § 1324a (a)(2).

4. INA § 274A(b); 8 C.F.R. § 274a.2(b).

5. INA § 274A(a)(1)(A); INA § 274A(a)(2).

6. In nal rules effective March 27, 2008, the Department of Homeland Security and Executive

Ofce for Immigration Review published penalty adjustments, raising civil penalties for enhanced

Employer Liability

and Potential

Penalties

20 Immigration Compliance and Best Practices

If the violation occurred before March 27, 2008, the employer’s penalty liability is not

less than $275 and not more than $2,220 for each unauthorized alien.7 For the second

offense, the employer would pay not less than $2,200 and not more than $5,500 for each

unauthorized alien.8 If the employer violated INA § 274A three or more times, the civil

monetary penalties would range from not less than $3,330 to not more than $11,000 for

each unauthorized employee.9 See Table 2.1.

Table 2.1 Penalty Chart 1. Knowing Hire/Continuing to Employ Violations Occurring

before March 27, 2008

First Offense Not less than $275, not more than $2,220

Second Offense Not less than $2,220, not more than $5,550

Two or More Offenses

Not less than $3,300, not more than $11,000

If the violation occurred on or after March 27, 2008, the employer is subject to an

increased amount in accordance with the ination adjustment provision. Therefore, for

rst- time offenses, the employer is liable for penalties in an amount not less than $375 and

not more than $3,200 for each unauthorized alien.10 For a second offense, the ne is not

less than $3,200 and not more than $6,500 for each unauthorized alien.11 For a third or

deterrent effect. 73 Fed. Reg. 10130 (Feb. 26, 2008); Federal Civil Penalties Ination Adjustment

Act of 1990, Pub. L. No. 101-410 (“Adjustment Act”), 28 U.S.C. § 2461. Section 701 of the Bipar-

tisan Budget Act of 2015, Pub. L. No. 114-74 (Nov. 2, 2015), titled Federal Civil Penalties Ination

Adjustment Act Improvements Act of 2015 (the “2015 Amendments”), 28 U.S.C. § 2461 note,

substantially revised the prior provisions of the Adjustment Act and substituted a different statutory

formula for calculating ination adjustments on an annual basis. DOJ (81 Fed. Reg. 42491, June30,

2016), DHS (81 Fed. Reg. 42987, July 1, 2016), and DOL (81 Fed. Reg. 43430, July 1, 2016) pub-

lished higher civil nes for immigration- related offenses. These so- called catch- up adjustment penal-

ties became effective on August 1, 2016, and apply to violations occurring after November 2, 2015.

DHS published the nal rule, which provides for adjusted civil penalties assessed after January 27,

2017. (82 Fed. Reg. 8571, January 27, 2017). DOJ published the nal rule, which provides for

adjusted civil penalties assessed after February 3, 2017, that occurred after November 2, 2015,

the enactment date of the 2015 amendments. DOJ (82 Fed. Reg. 9131. February 3, 2017). Higher

civil nes were published by DOJ in the nal rule to adjust civil penalties assessed after January 29,

2018, that occurred after November 2, 2015. DOJ (83 Fed. Reg. 3944-3947, January 29, 2018).

The new DHS penalties will be effective for penalties assessed after April 2, 2018 whose associated

violations occurred after November 2, 2015. DHS (83 Fed Reg. 13826, April 2, 2018). The civil ne

levels issued by DHS will be used in Notices of Intent to Fine notices and Final Orders. See section

1.02.2.3. The DOJ rule governs the penalties ordered by immigration judges, whose jurisdiction

depends on whether the employer chooses to appeal the DHS penalty imposition.

7. 8 C.F.R. § 274c,10(b)(1)(i).

8. Id.

9. Id.

10. Id.

11. Id.

Employer Liability and Potential Penalties 21

subsequent offense, the employer is subject to a ne of not less than $4,300 and not more

than $16,000 for each unauthorized alien.12 See Table 2.2.

If the violation occurred after November 2, 2015, and was assessed after August 1,

2016, but on or before January 27, 2017, the employer is subject to an increased amount

in accordance with the “catch- up” adjustment of the 2016 interim rule.13 For rst- time

offenses, the employer is liable for penalties in an amount not less than $539 and not more

than $4,313 for each unauthorized alien.14 For a second offense, the ne is not less than

$4,313 and not more than $10,781 for each unauthorized alien.15 For a third or subse-

quent offense, the employer is subject to a ne of not less than $6,469 and not more than

$21,563 for each unauthorized alien.16 See Table 2.3.

If the violation occurred after November 2, 2015, and was assessed after January 27,

2017, the employer is subject to an increased amount in accordance with the 2017 nal

rule.17 For rst- time offenses, the employer is liable for penalties in an amount not less

than $548 and not more than $4,384 for each unauthorized alien.18 For a second offense,

the ne is not less than $4,384 and not more than $10,957 for each unauthorized alien.19

For a third or subsequent offense, the employer is subject to a ne of not less than $6,575

and not more than $21,916 for each unauthorized alien.20 See Table 2.4.

12. Id.

13. 81 Fed. Reg. 42987 (July 1, 2016); supra note 6.

14. 81 Fed. Reg. 42987 (July 1, 2016).

15. Id.

16. Id.

17. 82 Fed. Reg. 8571 (Jan. 27, 2017); supra note 6.

18. 82 Fed. Reg. 8571 (Jan. 27, 2017); 8 C.F.R. 274a.10(b)(1)(ii)(A).

19. 82 Fed. Reg. 8571 (Jan. 27, 2017); 8 C.F.R. 274a.10(b)(1)(ii)(B).

20. 82 Fed. Reg. 8571 (Jan. 27, 2017); 8 C.F.R. 274a.10(b)(1)(ii)(C).

Table 2.3 Knowing Hire or Continuing to Employ Penalties for Violations Occurring

on or after November 2, 2015, and Assessed after August 1, 2016

First Offense Not less than $539, not more than $4,313

Second Offense Not less than $4,313, not more than $10,781

Three or More Offenses

Not less than $6,469, not more than $21,563

Table 2.2 Knowing Hire or Continuing to Employ Penalties for Violations Occurring

on or after March 27, 2008

First Offense Not less than $375, not more than $3,200

Second Offense Not less than $3,200, not more than $6,500

Three or More Offenses

Not less than $4,300, not more than $16,000