Back to Top skip to main content
Green and Spiegel - An Immigration Law Firm - United States
May 8, 2020

Fines, Penalties, and Budget Woes

David Spaulding

The 2020 federal deficit will likely top $3.8 trillion and, by 2022, will be approximately 106% of the Gross Domestic Product (GDP). We didn’t expect to be here. The pandemic and quarantine really socked it to our economy and there are direct connections between those debts and how flexible government agencies are likely to be in resolving fines and penalties.

As a general matter, agencies feel starved for resources in even the best of times.  There is always more work to do than the resources allow for and I haven’t seen an agency which didn’t have a number of projects waiting in the wings for better budget days. However, when budgets get tight, agencies turn their attention to eking more value out of core income producing operations. Given how tight budgets will be for all levels of government, I’m expecting to see heavier fines and penalties.

Fines and penalties tend to be flexible and agencies can often mitigate effects for seemingly worthy subjects.  For example, Immigration and Customs Enforcement (ICE) has reduced financial consequences of employing unauthorized workers in exchange for enrolling in E-Verify and the ICE Mutual Agreement between Government and Employers (IMAGE) program.  Since the agency’s goal is to foster a culture of compliance, more inspections and investigations, with lower penalties for non-compliance, and agreements which bind employers to long-term compliance, is good policy.

However, budget woes push agencies the opposite direction.  It is a sort of organizational defense posture which seeks to hold onto the people and institutions they have in order to wait out the tough times.  This also makes management sense and, as a federal government manager for many years, I am comfortable opining that it is the kind of thinking that inserts itself into even seemingly minor and disconnected negotiations.  Agency components look around at others and seek to reapportion resources in their favor and components with the ability to generate agency revenue have greater influence in those decisions.

Fines and penalties are revenue generators for government agencies, from local code enforcement to the U.S. Department of Justice and everywhere in-between.  For agencies struggling to fund core business, expanding revenue-generating components is good management since money taken in through enforcement can be filtered to other components. For regulators and enforcement, generating revenue protects resources and, for all of those reasons, I expect agencies to be considerably less flexible in how they settle fines and penalties.

For the citizenry, this heightens the importance of self-auditing.  It is rare that we know as much as we think we do about the rules which impact our lives.  Often, that matters little since we count on reasonableness from regulators and enforcement.  Think, for example, about speeding:  Many do it and most expect to be given some latitude for less than egregious conduct.  Yet, I think it is generally understood that some jurisdictions use speeding tickets as revenue generators and that, in those circumstances, we are more likely to take the full brunt of the law.  So it is with regulations at all levels of government and that should makes us more careful when agencies face tight budgets.

Now is a good time to take another look at our operations, updating policies and procedures as we identify potential liabilities.  Just as we review insurance and purchase contracts regularly to make sure the agreements are oriented to business needs, we should be periodically looking at the policies and procedures which affect how we recruit, hire, employ, and terminate employees to keep them aligned to company goals.  Small investments now can prevent costly mitigation later.

Green and Spiegel is here to help.  We have the knowledge and experience to discretely identify liabilities in employing foreign nationals and restructure operations in ways that meet business goals.  Our compliance and enforcement practice is perfectly suited to help companies assess compliance and adapt existing operations to the changing regulatory environment.

We’re open during the quarantine and here to help.  Folks are invited to contact us on the web or you can call me directly at 484-645-4194.  I’m also available via email at dspaulding@gands-us.com.

DISCLAIMER: Please note, nothing I post here is legal advice, nor does reading anything I write or communicating with me on or through social media form an attorney/client relationship between us. Choosing an attorney is a serious matter and should not be based solely or primarily on advertising or any other public communication of an attorney or law firm.

Related Team

D Spaulding Team Page

David Spaulding

(215) 395-8959

(215) 395-8959

email David

Philadelphia (US Headquarters)

Full Biography

David Spaulding

Related Services:

Recent Blogs

Jan 15, 2021

Trump Tries Again to Raise Prevailing Wages, Success not Expected

In the last full week of the Trump administration, the DOL has once more issued a prevailing wage rule that lifts wages for H-1B, E-3, and H-1B1 nonimmigrant cases and for the PERM labor certification program. The new final rule, which was published on January 14, and goes into effect sixty days later, contains significant prevailing wage increases for all wage levels, though the new minimums are not as high as initially sought by DOL. The rule also provides a multi-year transition period which is intended to give employers time to meet the wage increases and makes certain accommodations for H-1B workers who are pursuing employment-based permanent residence. Initial wage increases are set to begin on July 1, 2021.

Jan 08, 2021

Final Rule Signals Major Change in H-1B Selection Process

In November 2020, we reported on the Trump administration’s Notice of Proposed Rule Making, announcing a major change in the process for filing cap subject H-1B petitions. The new proposed selection process prioritizes registrations based on wage level, thus giving priority to those registrations by employers who are paying the highest prevailing wages. Following the mandatory notice and comment period, the government has announced that the final rule will go into effect, without modification, on Friday, January 8, 2021.

Jan 04, 2021

H-1B, L-1 Restrictions Extended through March 31, 2021

Late on December 31, 2020, President Trump issued a proclamation continuing Proclamations 10014 and 10052, which suspended the entry of certain immigrants and nonimmigrants into the United States as a result of the COVID-19 pandemic. The proclamations have been continued until March 31, 2021. Learn more in this blog.