The Trump Administration's Latest Immigration-Enforcement Tool: The False Claims Act

As the U.S. Department of Justice (DOJ) continues to expand its use of the False Claims Act (FCA) to advance the Trump administration's policy priorities, immigration has emerged as the most recent focus area. The increased risk for federal contractors and recipients of federal funds takes several forms.

1. E-Verify. Two noteworthy FCA cases this year reflect a crackdown on federal contractors' failure to use E-Verify to confirm that their employees were eligible to work in the United States. DOJ announced in September that Bayonne Drydock and Repair Corporation agreed to pay more than $4 million to resolve allegations that it violated the FCA by employing immigrants lacking work authorization for work under two federal contracts. This settlement follows an announcement in January — during the final days of the Biden administration — that a different federal contractor had agreed to pay just over $1 million to resolve similar allegations. Both cases alleged that the contractors failed to comply with Federal Acquisition Regulation 52.222-54, which requires employers to electronically confirm employees' employment eligibility in the federal E-Verify database. These settlements underscore the importance of government contractors monitoring their compliance — and their subcontractors' compliance — with E-Verify requirements.
2. PRWORA. Potential FCA exposure also might arise from the Trump administration's July announcement that it was effectively rescinding longstanding guidance under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). PRWORA provides that an organization that administers a "federal public benefit" is required to verify an applicant's immigration status before issuing benefits (with limited exceptions for charitable organizations in certain circumstances). The Trump administration's interpretation of the law significantly expands the number of federal benefit programs that are subject to the immigration-status restrictions — including Head Start programs, Title X family planning clinics, community services block grant programs, and community health centers. Although many of these policy changes are currently enjoined in a number of states and as to Head Start nationwide, other aspects are in effect and could give rise to potential FCA liability.
3. "Sanctuary Cities." Many federal agencies — including the U.S. Department of Homeland Security, the U.S. Department of Housing and Urban Development, the U.S. Department of Transportation, and the U.S. Department of Health and Human Services — have announced new conditions on federal grants requiring recipients to cooperate with federal immigration enforcement efforts. These conditions are often accompanied by conditions related to diversity, equity, and inclusion policies. Although multiple jurisdictions have successfully obtained injunctions against these new conditions, where they apply, the terms could create additional FCA risk for jurisdictions that accept the federal funds but are later deemed uncooperative by federal immigration officials.

These are just three examples of how the Trump administration could continue to advance its immigration policy priorities through FCA enforcement. Government contractors and grant recipients should take proactive steps, including by carefully reviewing their agreements with and certifications to the government, as well as their immigration-verification compliance mechanisms. Early attention to these issues can help mitigate risk and avoid costly investigations or enforcement actions.

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