Employer Liability of Hiring and Retention for Illegal Alien Employees

W. Isaac Zimmerman, Esq., izimmerman@tuckerlaw.com, (717) 221-7971

It is no secret that since taking office for the second time, President Trump and his administration have leveled their crosshairs at the immigration policies and protections put in place by the Biden administration. The news is flooded with coverage of U.S. Immigration and Customs Enforcement agents removing individuals from cities, neighborhoods, places of business, college campuses, and, in some cases, courtrooms.

As this hot-button topic continues to spin in the news cycle, some employers may find this time a good opportunity to audit and evaluate their hiring procedures to ensure they are protecting themselves from the hiring or retention of individuals who are in the United States illegally.

At first thought, one may consider the greatest area of liability to be those illegally entering the country from the southern border, and, depending on your field of employment, it may be. Alternatively, consider those individuals who were in the country legally and hired legally but whose status has since expired, been revoked, or has otherwise become invalid.

As employers, you are responsible for who you hire, your compliance with Federal Law (such as completing and maintaining I-9 documentation), and how your hiring practices impact your business. It should not be lost on employers that they may be held criminally or civilly liable for the hiring or retention of illegal individuals. The Department of Homeland Security (DHS) provides a Handbook for Employers that lays out your responsibility to vet each applicant, submit complete and accurate I-9 forms, and the penalties for knowingly hiring or retaining an employee who is in the country illegally and not eligible to be employed.

Section 11.8 of the Handbook lays out a “good faith” standard when determining if an employer knew the illegal immigration status of an employee. DHS classifies an employer as “knowingly” hiring an “unauthorized alien” if after November 6, 1985, the employer “enters into, renegotiates, or extends a contract or subcontract to obtain the labor of an alien you know is not authorized to work in the United States.”

We can understand by this definition that even if someone was authorized to work in the United States but no longer is, DHS equates the continued employment of that individual to the employer initially knowingly hiring that employee illegally.  

The penalties surrounding these regulations are steep. Chapter 8 of United States Code 1324(a) Unlawful Employment of Aliens outlines thatif the government can establish a systemic pattern of the hiring or retention of illegal workers, fines may be issued, along with a sentence of up to six months imprisonment. Employers could also be fined per occurrence, significantly impacting the financial resources of your business.

Civilly, the government can also sue employers for permanent or temporary injunctions, restraining orders, or other sanctions against you and your business. A court may also remove or suspend your business license.

Additionally, section four of the Code extends the law in certain instances to contracted workers so as to prevent employers from outsourcing work to companies that they know use unauthorized workers. This prevents employers from simply sub-contracting out work to known illegal aliens and expands an employer’s liability when doing business with other organizations.

It also highlights the importance of clearly outlining in staffing agency agreements the contractor’s responsibility to comply with I-9 requirements and supply only workers who are authorized to work in the United States.

So, how can employers defend against those penalties? A good-faith defense can be established if you can show you complied with I-9 requirements and truly did not have actual knowledge that the individual was prohibited from working in the United States.

The Code does make mention of considering the recruiting practices of the employer as a prong in a good-faith analysis. It could be interpreted by courts that if the pool of applicants from which you are employing individuals is notoriously populated with illegal aliens, you knew or should have known that the individual(s) had a high likelihood of not being permitted to work legally.

We can expect that under the current Administration, increased scrutiny will be shown to employers in an effort to “weed out” aliens who are working in the country illegally. In light of that, employers are well advised to take proactive steps to ensure that they are completing I-9 forms properly and maintaining and storing those records in compliance with the statutory requirements (three years from the hire date or one year from the termination date, whichever is later). Employers could also create a tracking system listing employee I-9 compliance information and, where the employment authorization is time-limited (such as a foreign worker on a temporary work visa with a specific term), the date of the authorization’s expiration. Periodic audits and self-correcting errors, in compliance with the specific procedures for doing so, are also wise and help to show an employer’s good faith efforts to comply with the law. If you have questions about I-9 compliance, Tucker Arensberg’s labor and employment attorneys can help.