SC County’s Innovative Business Auditing Program Curbs Illegal Employment

By Jessica Vaughan on January 10, 2009

Beaufort County has made great strides in creating a lawful employment environment in the South Carolina Low Country by implementing a creative and pioneering auditing program to help local businesses achieve compliance with immigration laws while exposing problems with fraudulent documents that enable illegal workers to get jobs. The effectiveness of this effort is further enhanced by strong state laws on illegal hiring and the county’s participation in the 287(g) program. These enable local law enforcement agencies to prosecute violators and have illegal workers removed. Local officials report signs that the illegal alien population in Beaufort County has been noticeably reduced.


The ordinance establishing the business license audit program was enacted by the county council, with the support of senior county managers, in response to concerns in the community about rampant growth and development in the region that was accomplished at least in part by the widespread hiring of illegal workers in the construction, landscaping and hospitality industries. Local business owners complained to county officials about losing opportunities to companies who undercut them with low labor costs made possible by hiring illegal aliens.

The county leaders researched their options and settled on an innovative approach. All county businesses (except for those that operate only in certain incorporated cities) needed to be licensed annually and pay a fee scaled according to their revenue. The new ordinance added the requirement that businesses comply with federal hiring laws by verifying the immigration status of their employees through the long-established I-9 process. In addition, the county would conduct random audits to ensure that businesses had complied and that they were reporting their revenues accurately. The county hired a local company, Advance Point Global, that specialized in background checks and identification issues, to conduct the audits. The goal is to inspect all of the 4,000+ county businesses within four years. The funding for the audits comes from the license fees, which had recently been raised to align with other jurisdictions in the area.

Since April, when the audits began, more than 7,000 I-9 forms at 894 companies have been inspected. The results have surprised everyone. In the first four months, 27% of the I-9s inspected were judged by the auditor as non-compliant. In July, Advance Point Global consulted with ICE, gave its auditors additional training, and aligned its criteria with federal standards. Over the period August-December, the auditors found that an astonishing 67% of the I-9s inspected were non-compliant. Some of the deficiencies were considered relatively minor, but others involved missing or misplaced information or unacceptable documentation of identity and/or work authorization.

Not all of these violations would necessarily result in federal immigration charges of knowingly hiring illegal workers if discovered by ICE. In some cases the employers simply were not well informed about the requirements. But they could be paperwork violations that might result in fines in the event of an official ICE audit. So this is not just another layer of regulation -- the county is truly providing a service to its employers by educating them on the rules and preemptively nudging them into compliance before they might come under federal scrutiny.
The ordinance does provide for sanctions (potential loss of license) if employers fail to correct themselves after an audit. But County Administrator Gary Kubic told me that they have not had to impose any sanctions, because businesses are cooperating so far. He has observed what he describes as a “braking effect” -- most conscientious businesses are not waiting to be audited to get into compliance, but instead auditing themselves first. Besides, he said, the county government has no desire to put people out of business. It believes that most employers want to do the right thing, and the auditing process helps them out while at the same time leveling the playing field so that their competitors are also following the rules. The county made sure to publicize the initiative widely so that businesses knew what to expect and when it was going to happen.

In addition to helping employers follow the law, the auditing roots out document fraud. One weakness in the I-9 program is that it does not require employers to verify the information that new hires present (as does E-Verify). When they began examining the I-9s, the Advance Point auditors noticed a disturbing amount of document and identity fraud. This included duplicate “A numbers” (the unique identifier DHS assigns to each alien, whether on green cards or other encounters), duplicate ITINs (alien tax id numbers), duplicate, fraudulent, or stolen Social Security numbers, and other red flags. Out of the first 100 audits Advance Point did, they found nine businesses with serious id fraud problems, involving 81 people. So far, Advance Point has uncovered more than 200 incidents of suspicious and possibly illegal documentation involving more than 20 employers.

These cases have been turned over to the Beaufort County Sheriff’s Office for investigation. The Sheriff’s Office is currently working with local prosecutors to bring charges under state laws, probably starting this month. In addition, the county will be able to charge any illegal aliens with immigration violations they find and launch the removal process under their 287(g) authority, which was obtained in June, 2008. Having the 287(g) authority enables the county to complete the full circle of consequences that should occur when illegal aliens are caught in unlawful employment, and not be limited by ICE’s mission and staffing constraints. (ICE has three small field offices in SC, and only one worksite auditor for the entire state.)

Another benefit of the audit program is that the county has been able to identify businesses that were mis-stating their revenues or mis-classifying employees as independent contractors. These discoveries have resulted in increased license fee revenues because invariably the violators were paying less in fees than their revenues warranted. Also, any independent contractors discovered are being channeled through the licensing process (and paying a fee) and any contractors who turn out to be illegal aliens are unable to continue as contractors.

County officials interviewed report that the population of illegal aliens in Beaufort County has declined noticeably since the auditing and 287(g) programs began. Perhaps the economy also has played a role, but they have little doubt that these initiatives have provided some incentive for illegal aliens to leave the area. They observe fewer construction and day labor crews in the area, restaurants catering mainly to recent immigrants have largely shut down, and certain apartment complexes have higher vacancy rates than before the initiative began. They believe that families headed by illegal aliens left first, while younger single male illegal workers have been more persistent in continuing to seek employment in the area.

Ricky Bobby may have said that anyone who ain’t first is last, but any state or local government leaders looking for a cost-effective way to prevent illegal employment and deter illegal settlement should take a serious look at replicating or adapting this program in their jurisdiction. Shake ‘n’ Bake!