Punching In: Employers Brace for Trump Immigration Raids, Audits

Monday morning musings for workplace watchers.

Workplace Immigration | California Labor-Management Committees

Andrew Kreighbaum: While much of the incoming administration’s policy agenda for the immigrant workforce is still unknown, employers are gearing up for a dramatic increase in worksite enforcement, as outlined by key Trump officials.

That will include a return of surprise raids of companies suspected of employing unauthorized immigrant workers already promised by former acting Immigration and Customs Enforcement director and Trump “border czar” pick Tom Homan. Employers will also see stepped up I-9 audits that could be just as disruptive for many companies.

“This enforcement may come fast, unannounced and really without much warning,” said Scott Bettridge, chair of the immigration practice at Cozen O’Connor PC.

Completion of the I-9 form, first mandated in 1986, is required to verify the eligibility of every new employee to work in the US. Audits surged in the first Trump administration, hitting 5,981 in fiscal year 2018— a four-fold increase from the previous year. Audits climbed to 6,450 in fiscal 2019 before the Covid-19 pandemic curtailed enforcement.

Industries that have a high share of immigrant labor such as manufacturing, food processing, construction, and hospitality are likely to be targeted for audits as well as national security firms, attorneys say.

Employers should “get their I-9 house in order” now with their own internal audits, said John Mazzeo, senior director and associate general counsel at Vertical Screen Inc., which assists employers with applicant screening.

An audit will start with a company receiving a notice of inspection from the Department of Homeland Security requiring that all I-9 forms and supporting documents for current and recently terminated employees be turned over within days. Employers who fall out of compliance risk losing part of their workforce as well as significant financial costs.

Penalties could range from $281 to $2,789 for each paperwork violation and up to $27,894 for each unauthorized immigrant worker who was knowingly employed.

Employers that have embraced the federal E-Verify system to check employment eligibility shouldn’t assume they’re free of potential violations, said Bruce Buchanan, special counsel at Littler Mendelson PC. Using the program means lower chances of penalties, but doesn’t give employers “carte blanche” to avoid potential audits, he said.

Tougher immigration enforcement will likely be much more swift under the second Trump administration, Bettridge said, but verifying employment eligibility is what companies “have the most control over at this point.”

President-elect Donald Trump’s “border czar” pick Tom Homan has promised the return of surprise raids of companies suspected of employing unauthorized immigrant workers.

Photo by David Dee Delgado/Getty Images

Rebecca Rainey: A pending prevailing wage lawsuit in California brought by a joint labor-management cooperation committee will serve as a test case for how non-government organizations can backstop state and federal enforcement.

Norcal Construction Industry Compliance filed a lawsuit in California state court on behalf of several workers that aren’t represented by the group directly. Its Sept. 30 complaint accuses Sierra National Construction, a contractor for public projects in the state, of underpaying its workers in violation of prevailing wage laws.

The case will be one of the first to explore the boundaries of a California law passed in 2013that emboldened labor-management committees to bring legal action against employers for violations of prevailing wage laws.

“I’m not aware of any published decisions interpreting the law,” said Kimberley Weber, an attorney at McCracken, Stemerman & Holsberry, who is representing the committee in the lawsuit. “So it is an underutilized statute.”

Members of Norcal leadership say they believe other states could emulate the approach California has taken with its labor-management committees and broaden their reach beyond just the workers who are directly covered by the committees themselves. The federal Labor Management Cooperation Act of 1978 allows for the formation of these committees to resolve a broad array of workplace issues, if they’re jointly sought by employers and labor representatives.

The legal effort lands as more employers are expected to be subject to prevailing wage requirements under the billions of dollars of infrastructure investments awarded under the Biden administration. It also comes ahead of the incoming Trump administration, which is expected to scale back enforcement at the US Labor Department, which polices prevailing wage requirements at the federal level.

“If we fail to hold bad actors accountable, it not only hurts workers, it cheats our communities out of the tax revenues and economic activity that’s tied to paychecks, and puts responsible local businesses who play by the rules at a competitive disadvantage,” NCIC Executive Director Dina Morsi said in a statement on the lawsuit.

Prevailing wages are required to be paid on most projects involving public works, and are based on the local rate of pay and benefits specific to the type of job being done and the zip code where the work takes place.

The lawsuit alleges that, based on a review of Sierra National’s certified payroll records, the company “inflated” its benefit costs to reduce the wages it would have to pay to workers on public projects throughout California. Since 2020, the complaint says, Sierra National workers on multiple projects lost out on $7 an hour due to the alleged scheme. The suit seeks over $9.5 million in damages and liquidated damages, in addition to $75,000 in penalties.

Attorneys for Sierra National Construction didn’t immediately respond to a request for comment.

We’re punching out. Daily Labor Report subscribers please check in for updates during the week, and feel free to reach out to us