DOJ Finalizes Immigration-Related Penalties, Effective February 3, 2017 | Practical Law

DOJ Finalizes Immigration-Related Penalties, Effective February 3, 2017 | Practical Law

The Department of Justice (DOJ) issued final regulations that include the agency's 2017 annual inflation adjustments to civil money penalties assessed in its regulations, effective February 3, 2017. The adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The final regulations address penalties imposed under the Immigration Reform and Control Act of 1986 (IRCA).

DOJ Finalizes Immigration-Related Penalties, Effective February 3, 2017

Practical Law Legal Update w-005-8234 (Approx. 7 pages)

DOJ Finalizes Immigration-Related Penalties, Effective February 3, 2017

by Practical Law Labor & Employment
Law stated as of 07 Feb 2017 • USA (National/Federal)
The Department of Justice (DOJ) issued final regulations that include the agency's 2017 annual inflation adjustments to civil money penalties assessed in its regulations, effective February 3, 2017. The adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The final regulations address penalties imposed under the Immigration Reform and Control Act of 1986 (IRCA).
On February 3, 2017, the DOJ issued final regulations adjusting for inflation the civil monetary penalties assessed under the Immigration and Nationality Act (INA), including those assessed under the Immigration Reform and Control Act of 1986 (IRCA). The adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Inflation Adjustment Act). The Inflation Adjustment Act significantly revised the method for calculating inflation adjustments for penalty increases, including by:
  • Providing an initial "catch-up" adjustment for civil money penalties.
  • Requiring the DOJ to annually adjust the penalties for inflation (under a cost-of-living formula), by January 15 of each year.
On June 30, 2016, the DOJ issued interim final regulations establishing an initial catch-up for civil money penalties that the agencies administer (see Legal Update, Immigration-Related Penalties Adjusted Up for Inflation). This included penalties assessed under the INA, including those assessed under the IRCA.
The final regulations include the DOJ's 2017 annual inflation adjustment to its civil money penalties. Under the Inflation Adjustment Act, this adjustment was required to be published by January 15, 2017.

Effective Date of 2017 Annual Adjustments

The final regulations were effective February 3, 2017. As provided by the Inflation Adjustment Act, the increased penalty levels apply to any penalties assessed after this date. This means that the final regulations' higher penalty amounts apply for penalties assessed after February 3, 2017, whose associated violations occurred after November 2, 2015.
The following table illustrates which penalty level applies, keyed to when the underlying violation occurred and when the resulting penalty was assessed. 
Violations Occurring:
Penalty Assessed:
Applicable Penalty Level:
On or before November 2, 2015
On or before August 1, 2016
Pre-August 1, 2016 levels
On or before November 2, 2015
After August 1, 2016
Pre-August 1, 2016 levels
After November 2, 2015
After August 1, 2016, but on or before February 3, 2017
August 1, 2016 levels
After November 2, 2015
After February 3, 2017
February 3, 2017 levels

Adjustment Process and Calculation

The annual adjustment is based on the Consumer Price Index for all Urban Consumers (CPI-U). In general, an adjustment is calculated using the percent change between the:
  • October CPI-U preceding the date of the adjustment (here, the October 2016 CPI-U).
  • Prior year's October CPI-U (here, the October 2015 CPI-U).
The cost-of-living adjustment multiplier for 2017, based on the CPI-U for October 2016, not seasonally adjusted, is 1.01636. To calculate the 2017 annual adjustment, the DOJ multiplied the most recent penalty amount for each applicable penalty by the multiplier, 1.01636, and rounded to the nearest dollar.

Table of Adjusted Penalties for Violations of Select IRCA Requirements

The below table reflects the DOJ's 2017 annual inflation adjustments to the civil money penalties for violations of certain requirements under the INA and IRCA, effective February 3, 2017. 
IRCA Provision
Description of Violation
2017 Penalty (As Adjusted)
INA § 274A(e)(4)(A)(i) (8 U.S.C. § 1324a(e)(4)(A)(i)); 28 C.F.R. § 68.52(c)(1)(i)
Unlawful employment of unauthorized workers, first order
$548-$4384 per unauthorized worker
INA § 274A(e)(4)(A)(ii) (8 U.S.C. § 1324a(e)(4)(A)(ii)); 28 C.F.R. § 68.52(c)(1)(ii)
Unlawful employment of unauthorized workers, second order
$4,384-$10,957 per unauthorized worker
INA § 274A(e)(4)(A)(iii) (8 U.S.C. § 1324a(e)(4)(A)(iii)); 28 C.F.R. § 68.52(c)(1)(iii)
Unlawful employment of unauthorized workers, subsequent order
$6,575-$21,916 per unauthorized worker
INA § 274A(e)(5) (8 U.S.C. § 1324a(e)(5)); 28 C.F.R. § 68.52(c)(5)
Paperwork violation
$220-$2,191 per relevant individual
INA § 274A (note) (8 U.S.C. § 1324a (note)); 28 C.F.R. 68.52(c)(6))
Failure to notify of final nonconfirmation of employee's employment eligibility
$763-$1,527 per relevant individual
INA § 274A(g)(2) (8 U.S.C. § 1324a(g)(2)); 28 C.F.R. § 68.52(c)(7)
Violation/prohibition of indemnity bonds
$2,191
INA § 274B(g)(2)(B)(iv)(I) (8 U.S.C. § 1324b(g)(2)(B)(iv)(I)); 28 C.F.R. § 68.52(d)(1)(viii)
Unfair employment practices, first order
$452-$3,621 per individual discriminated against
INA § 274B(g)(2)(B)(iv)(II) (8 U.S.C. § 1324b(g)(2)(B)(iv)(II)); 28 C.F.R. § 68.52(d)(1)(ix)
Unfair employment practices, second order
$3,621-$9,054 per individual discriminated against
INA § 274B(g)(2)(B)(iv)(III) (8 U.S.C. § 1324b(g)(2)(B)(iv)(III)); 28 C.F.R. § 68.52(d)(1)(x)
Unfair employment practices, subsequent order
$5,432-$18,107 per individual discriminated against
INA § 247B(g)(2)(B)(iv)(IV) (8 U.S.C. § 1324b(g)(2)(B)(iv)(IV)); 28 C.F.R. § 68.52(d)(1)(xii)
Document abuse
$181-$1,811 per individual discriminated against
INA § 274C(d)(3)(A) (8 U.S.C. § 1324c(d)(3)(A)); 28 C.F.R. § 68.52(e)(1)(i)
Document fraud for violations described in Section 1324c(a)(1) to  Section 1324c(a)(4), first order
$452-$3,621 per document
INA § INAC(d)(3)(B) (8 U.S.C. § 1324c(d)(3)(B)); 28 C.F.R. § 68.52(e)(1)(iii)
Document fraud for violations described in Section 1324c(a)(1) to  Section 1324c(a)(4), subsequent order
$3,621-$9,054 per document
INA § 274C(d)(3)(A) (8 U.S.C. § 1324c(d)(3)(A)); 28 C.F.R. § 68.52(e)(1)(ii)
Document fraud for violations described in Section 1324c(a)(5) to  Section 1324c(a)(6), first order
$382-$3,054 per document
INA § 274C(d)(3)(B)(8 U.S.C. § 1324c(d)(3)(B)); 28 C.F.R. § 68.52(e)(1)(iv)
Document fraud for violations described in Section 1324c(a)(5) to  Section 1324c(a)(6), subsequent order
$3,054-$7,635 per document

Practical Implications

The DOJ's 2017 inflation adjustment is the first of what will be an annual adjustment, to be published by the DOJ by January 15 of each year. (As noted, the DOJ published the required catch-up adjustment late last summer.)
As with the earlier catch-up adjustments, practitioners must be aware of the increased penalties under the final regulations to properly advise clients on their potential liability for violations of the statutes or regulations impacted by the Inflation Adjustment Act. For at least some of the affected provisions, the 2017 adjustment amount, when coupled with last summer's catch-up adjustment, represents a fairly significant increase in the overall penalty, which raises the stakes for noncompliance.