Key Takeaways:
- The incoming administration is expected to implement significant changes in U.S. immigration policy that will affect all employers.
- Employers should review their system for I-9 compliance now and prepare for potential I-9 and worksite audits.
- Companies in industries that rely on immigrant labor, including construction, manufacturing, IT staffing and hospitality, will need to consider the potential for significant economic effects that a loss of workers might have on their operations.
During his first administration, now President-elect Donald Trump implemented significant changes to U.S. immigration policy. Below, we address what employers can expect in his second term and how they can prepare for it.
What should employers expect from a second Trump administration?
In his 2024 presidential campaign, Trump promised to “launch the largest deportation program … in the history of America.” Doing so would have a significant impact on U.S. employers. This is because the U.S. can deport only undocumented immigrants that it knows about, and the most efficient method to identify undocumented immigrants in large numbers is worksite enforcement.
Generally, immigration-related worksite enforcement takes one of two forms:
- I-9 audits, which are more common and involve a U.S. Department of Homeland Security (DHS) agent inspecting the I-9 forms for each employee to verify their employment authorization.
- Raids, which occur when Immigration and Customs Enforcement (ICE) suspects a business of employing a large number of undocumented workers. ICE raids are unannounced, search warrant-authorized seizures of all immigration-related documents, including payroll, I-94 forms, bank records, Social Security Administration paperwork, tax documents, employee records and more. If during a worksite raid ICE discovers unauthorized workers at the site, it may arrest them.
What impact does a worksite audit or raid have on a business?
That worksite enforcement can have life-changing consequences for undocumented immigrants is well covered by the media. Less often discussed, however, are the significant economic effects they have on businesses.
Worksite enforcement can rapidly deplete a business’s workforce, particularly for those in industries that rely on substantial immigrant labor, like construction, manufacturing, IT and hospitality. Consider the cases below:
- Jabil, a major manufacturer of electronics components for the tech industry, recently had to execute a “mass exodus” of its workforce after discovering that its staffing agency was supplying it with undocumented workers. The upheaval caused the company to lose up to $50 million, according to an ongoing lawsuit.
- Following an ICE raid at Swift & Co., a pork-processing facility in Marshalltown, Iowa, the company reported losses between $45 million and $50 million, due in part to an inability to find replacement workers.
- A series of 2019 ICE raids at meat-processing plants in Mississippi caused businesses to cut operations or shut down entirely and led to both criminal and civil charges. The accused face a maximum of up to 84 years in prison and $2.25 million in fines.
Historically, U.S. policymakers were reluctant to punish businesses for employing unauthorized workers. Then, in 1986, President Ronald Reagan signed into law the Immigration Reform and Control Act (IRCA), which outlawed the hiring of undocumented immigrants. Enforcement of IRCA was minimal until the establishment of ICE in 2003, and it has since been enforced unevenly from one administration to the next. The Biden administration pledged to end worksite raids. In contrast, Thomas Homan, who was acting director of ICE during Trump’s first term and will be “border czar” in the second, has consistently advocated for workplace enforcement to target undocumented workers and the employers that “harbor” them. “Worksite operations,” he says, “have to happen.”
What can an employer do to minimize disruptions from worksite enforcement?
- Maintain a system for I-9 compliance. Employers should ensure their employment authorization verification policies and procedures are I-9 compliant, and they should ensure they have personnel trained in this area. Employers with large workforces should consider partnering with an employment-based immigration compliance attorney to conduct I-9 audits. Identification and correction of inaccurate or incomplete I-9 paperwork before a DHS audit can mitigate the penalties.
- Create a plan. Employers should develop an action plan and designate an employee to be responsible for interacting with enforcement agents. This employee should be trained in three areas: (i) the relevant immigration enforcement agencies and the limitations of their authority, (ii) the employer’s rights and responsibilities and (iii) employees’ rights and responsibilities.
- Monitor hiring policies for discriminatory practices. Given the potentially severe penalties for employing unauthorized workers, employers may be inclined to confirm candidates’ immigration status by asking for more documents than are required for I-9 compliance. Doing so is prohibited by federal (and some state) laws and can result in penalties of up to $4,610 per case for a first-time offense, debarment from federal contracts and court orders requiring back pay to the individual discriminated against. It is likely that at least some states will heighten their enforcement of immigration-related anti-discrimination laws to combat perceived federal overreach in this area by the Trump administration. Companies should narrowly tailor their hiring policies to comply with I-9 requirements without inviting discrimination claims.
[View source.]
