Human trafficking for labor is a massive problem in the United States, and the agriculture industry is an often overlooked yet significant area of vulnerability. Of labor trafficking reports to the National Human Trafficking Resource Center (NHTRC) hotline and Polaris from 2014 to 2015, the industry most associated with victims was agriculture and animal husbandry.
Financial institutions may be unknowingly entering into relationships with businesses associated with labor trafficking in agriculture. Labor trafficking is notoriously difficult to uncover in this industry. Additionally, when such practices are detected, they are often minimally prosecuted, without long-term consequence. As such, businesses often remain in operation. In the cases in which perpetrators lose their jobs, they can often open new, similar businesses later on, or continue the same work under a relative’s name. Financial institutions can use public data to understand indicators, evaluate their customers, and explore suspected business’ networks to combat labor trafficking in agriculture. Below are some ideas to get started.
Using Individual Datasets: Risks for Temporary Agricultural Workers
H-2A visas are employer-sponsored temporary agricultural worker visas. Workers on the H-2A visa rely on their employers for their visa sponsorship, work, and residence. Many have taken these jobs that are undesirable to American nationals because of comparably worse options in their home countries.
H-2A visa holders, therefore, may already be in compromised positions, and may be trafficked by employers who control their legal residency. As such, these workers have little leverage and the system is ripe for trafficking.
H-2A visa sponsors are publicly listed. Financial institutions can assess which of their existing or prospective customers employ workers on these visas.
Connecting Data: Networks of Visa Brokers
H-2A visa brokers facilitate the sponsorship of international temporary agricultural workers. Brokers are used by farmers to simplify the burden of the application process. One broker may be contracted by thousands of employers, for which it will acquire and place temporary laborers.
Visa brokers represent one population that can manipulate the sponsorship process. While they are occasionally caught and disciplined for trafficking, they are able to continue their businesses under new company names or under the guises of relatives and friends.
One well-known instance of visa manipulation is the 2015 case of Craig Stanford Eury Jr. and his firm, the North Carolina Growers Association (NCGA). Understanding the Eury case and his web of connections will help financial institutions understand the evasions and relations to track.
NCGA under Eury registered to sponsor laborers as an “employer” rather than as a broker. This filing status enabled NCGA to conceal the identities of the farms it sent laborers to, and made it harder for reviewers to evaluate which workers could legally work at which farms. NCGA helped at least one farm evade the cap on H-2B temporary workers for non-agriculture jobs by petitioning for H-2A visas even though laborers would not be used for agricultural work.
Today, Eury and some of his colleagues have criminal records for their manipulations, but they have not been barred from continuing to recruit temporary laborers. Since his conviction, Eury has been directly tied to six other companies including another visa consultant agency and a cross-border transit company. Today, NCGA remains the biggest employer of H-2A guest workers in the U.S., having certified 11,947 visas in 2017. Eury’s daughter founded a visa company ILMC, which was permanently barred from sponsoring visas, but its former employees certified another 7,219 visas 3 years later.
Once caught, labor traffickers are often still able to operate. Financial institutions should understand visa brokers’ networks, which come from publicly-reported business names and owners. Explore Stan Eury and the NCGA’s network as an illustration of how broker networks can function, and to assess your institution’s work with related parties.
Following Trends: Demographics to Build Typologies
To uncover the incidence of labor trafficking in U.S. agriculture, incidences can be further segmented into a few key demographic categories.
Firstly, the United States’ tobacco industry is at particular risk for trafficking The U.S. is the fourth-largest tobacco producing country in the world, having harvested more than 700 million pounds in 2015. One in 10 calls reporting agricultural labor trafficking and exploitation cite tobacco.
Within the tobacco industry, certain states are at a greater risk for trafficking. North Carolina and Kentucky together produce more than 70% of the domestic tobacco yield. Hundreds of labor violations have been found in these states. Of the 29 labor trafficking cases in Kentucky reported in the last year to the National Human Trafficking Hotline, 12 were related to agriculture.
Despite violations, criminal action against labor trafficking is minimal. In spite of more than 100 reported labor trafficking cases in Kentucky since 2012, zero federal labor trafficking cases have been prosecuted. Employers who have been found guilty remain eligible for sponsoring visas. The Department of Labor has the ability to add people to the Debarred/Disqualified List of Employers, prohibiting them to apply for visa sponsorship for a period of time, but this rarely occurs. Christopher Lee Smith Farms is the only KY employer currently debarred under the H-2A program. Smith’s advising visa consultant listed on H-2A applications has no violations listed against her.
By evaluating public demographic trends, financial institutions can identify a disconnect between the number of reports submitted and the prosecution of labor trafficking.
Deducing Insight: “Non-Transactions” to Spot Trafficking
Agricultural businesses can be expected to have certain operating expenses and payments associated with their labor. Financial institutions can anticipate salary, equipment, health, and housing transactions from employers in this industry based on their type of farm work, and the number and type of laborers they register. (Tobacco farming, for example, poses greater health risks to employees, and should be connected to greater equipment and healthcare expenses.) When transactions do not appear as expected, farms may be trafficking labor.
For labor compensation transactions, a few noteworthy practices can signal that an employer is shrouding labor trafficking from financial institutions.
- Labor contractors: Agriculture employers can use labor contractors to pay employees, instead of paying employees directly. When contractors are used, financial institutions can see mass wage payments to the contractor, but not if and how wages are paid out to individual workers.
- International recruiters: Labor contractors can be based in different countries and paid through cash and money remittance services. Additional layers of transactions and an inability to track cash leads to a loss of transaction details and financial institutions cannot monitor them effectively.
- Missed pay periods: In the U.S., employees are paid at regularized intervals. When an employer veers from its typical practice and does not pay workers for several pay periods, trafficking may be occurring.
Employers sponsoring H-2A workers are expected to have specific other expenses, that when missing may indicate trafficking. Financial institutions can identify which of their customers are sponsoring H-2A workers (also by identifying those making payments to the Department of Labor).
- Insufficient housing: H-2A sponsors are required to provide housing for these workers. Of the reasons for visa sponsorship debarment is a failure to provide sufficient housing. Financial institutions should use the Office of Foreign Labor Certification (OFLC) data on H-2A applications to identify employers debarred due to WHD infractions.
- Insufficient salaries: Benchmarks are available on farm-work compensation totals, wages by type of farmwork, and labor costs as a proportion of other expenses. Financial institutions should assess their customers’ labor costs against these industry averages for indications of underpayment.
In Conclusion: Financial institutions face legal repercussions for enabling labor trafficking. Top institutions have failed to monitor or act on labor trafficking-related suspicious activities across their services, often due to an inability to identify such behavior.
Public data has been largely untapped to this point as a resource for institutions to monitor for labor trafficking among customers and transactions. Specifically in the U.S. agriculture industry, banks can use public data to improve their understanding of labor trafficking risks, networks, and non-transactions, to detect and combat trafficking.
Checklist for FIs: Using Public Data to Combat Trafficking in Agriculture Customers