Who pays the penalty for hiring illegal workers?
If you work with outside staffing agencies, both sides have some responsibility for ensuring that your workers are legal.
Sharon Rider, Lake Charles, La.
If a small business needs temporary help and uses a staffing firm to obtain hourly workers, who will be subject to penalties if the workers turn out to be illegal aliens? Is it the small business or the staffing firm?
By Adriana Gardella, Fortune Small Business Senior Editor
Both may be liable. "Immigration law generally imposes sanctions on those who knowingly employ unauthorized workers," says labor and employment lawyer Michael Thompson of Lehr Middlebrooks & Vreeland in Birmingham. So, depending on who knew – or should have known – that the employees lacked proper authorization, there could be liability for the business owner, the agency, or both.
There are also cases where neither will be liable. "If the proper employment documentation is presented by an employee who subsequently is found to be illegal, no one will be held liable as long as the employer acts to remedy the situation when advised," says Frida Glucoft, chair of the immigration practice at Mitchell Silberberg & Knupp in Los Angeles.
But that doesn't mean you can bury your head in the sand. "One of the regulations related to unlawful employment expressly extends enforcement beyond the direct employer to anyone who acts with reckless and wanton disregard for the legal consequences of permitting another individual to hire an unauthorized alien," Thompson cautions. He notes that in one well-known case, U.S. Immigration officials investigated Wal-Mart (WMT) because its contractors had hired cleaning crews that included unauthorized workers. In 2005 the retail giant settled the matter with the government for $11 million and agreed to create an internal program to ensure that its contractors comply with immigration laws.
So how can you avoid landing in a Wal-Mart-like bind? Thompson urges you to create a written agreement with any employment agency you use. "It should contractually obligate the agency to comply with all applicable employment verification procedures and, to the extent permitted by law, require it to defend you and hold you harmless against any claim or cause of action related to unauthorized employment."
Thompson also advises you to work only with reputable staffing agencies and to take appropriate action to investigate claims that they are assigning undocumented aliens to work at your firm.
This column provides general information only and is not intended to replace the services or legal advice of an attorney. Always consult a lawyer regarding any specific legal concerns, as laws vary from state to state.
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From Joe Whittier Calif Mike
you claim that you pay migrant workers $10.00 dollars an hour. but i bet my last dollar you don't pay social security, taxes, or health care which the taxpayers have to pick up the tab for. stop whining and play by the rules and laws of this great nation or move to Iraq !!!
From Nancy, Los Angeles, CA When hiring a large, local company to install new windows throughout my house, I requested (and grudgingly received) a promise that no illegal aliens would be working on my premises. I doubt that getting the promise in writing would have been of any avail, but in retrospect, I should have taken that step.
Several of the workers who arrived at my house were in their 50s and spoke no English whatsoever. If these individuals are legal residents, I'll eat my drapes. Grrrrrrrrr
From jason, huntington beach, CA I always hear the old "illegals do jobs that lazy Americans won't do or feel is beneath them" I think the people who actually believe this need to get out around this great country and look around. I'm from Missouri and I've seen citizens (yes… white citizens) do some pretty dirty jobs for minimum wage pay. Now I live in CA, so I can see why people in the California bubble would have that view. It's like saying people wouldn't mow their lawns in CA if it weren't for the immigrants that do it. I don't really think that if all the immigrants vanished, that our lawns would have 6 ft tall grass in a few months. And I might be crazy, but I think we had strawberries, beans and fruit before these 13 million people came here illegally… no really …we did …I swear 
!
From Robert Puget Sound,WA Do you think for a minute, that apples are 95 cents a pound, asparagus is $1.95, strawberries are $2.25? ADD in the cost of emergency room births, schooling, healthcare AND SOCIAL SECURITY payments to ALL the 'anchor' babies these ILLEGALS have, at OUR expense. That apple is $8.75, asparagus $22.50, and strawberries are $31.00….THAT is the cost we bear, while the 'noble' farmer dumps his expenses onto every one of us.
From Rob, Orange County, CA It's absurd when I hear that illegals are taking jobs away from Americans. The fact is, illegals work the jobs that Americans are too lazy to do, or feel are beneath them. White Americans would never work for minimum wage, which in manufacturing, many jobs can only pay minimum wage to maintain competitiveness. These same Americans who complain about illegals working for cheap are the same Americans that buy at Walmart where goods are cheaper. They're hypocritical and lazy. Illegals work hard, and take pride in their work. Americans always want more for less, and their laziness and sense of entitlement is what is bringing this great country down.
From Dave Hawkins This whole attitude that we "need" illegal workers is so much bull that I can't stand to let it pass. Just because a few selfish businesses save money and keep costs down does not compensate for the costs that get passed on to the American tax payer. And this is besides the fact that "it is illegal – get it".
From Daniel Tulsa, OK I'm sorry, but for some small businesses it's not just a matter of pinching pennies, it's a matter of survival.
In all markets we see the rapid expansion of companies with low overhead costs and problems for those companies that can not compete with them. A significant portion of these problems involve labor costs… I am not just talking about the difference in wages, but also include additional compensation such as health insurance and retirement benefits. In Southern California (where I was born and lived until late 2007) we see Ralphs, Vons and other "high end" grocery chains being eliminated from the markets because of competition from non-unionized grocery stores that do not have the same costs. This is happening everywhere across the world. Jobs that can be outsourced are being outsourced. That's why eventually of the "Detroit 3" autos will be built in Canada, Mexico and other places where they can get inexpensive labor.
Using illegal immigrant labor allows US companies to continue to keep their costs down so they can compete in these markets. And by keeping costs down, the same people that we blame for hiring illegal labor are able to provide us with their good/service at a substantially reduced priced… there by stretching the value of our dollar.
We need a real solution to our immigration problem and attacking the person that comes here to live the American Dream is not it.
From sau Mike,
I totally agree with what you said. Today employers and producers in US are in a very tight spot. On one side there are cheap foreign (Chinese, Japaneses,etc) goods flooding the market. On the other hand, the cost of production (labour, material, tax, legal, insurance) is just too high. Then how do u expect companies to stay profitable? That is why every second business (GM, Ford, Circuit City) is going bust.
The Gov needs to have more business friendly policies and help the producers stay competitive. Only then will people get back their jobs and standard of living go up.
From Steven Phoenix Arizona Dear Mike, Atlanta, GA, I doubt you are paying $10 an hour for migrant workers. You are likely paying $7 or $8 an hour. People like you would like to have hundreds of illegal workers show up in your fields and then you would start paying them $6 an hour. You need to understand our system of taxation which made us a great country. Stop blaming Americans because you do want to play by the rules.
From Greg, Chicago IL Hi,
US needs to realize that there is no free market, there is no way we can compete with almost slave labor (or someone who earns bowl of rice per week). Greedy companies are always preaching about profits, how about regulating how much CEO makes? Why bankers and such award themselves with millions dollars in bonuses and an average illegal Joe working in the same company makes 8 bucks an hour with no benefits of any sort…where the disproportion comes from? How about asking Wallmart to give some of that multibillion profit back, and charge them a tax for shipping US jobs to china? Fines for employing illegals should be super high and in case you don't know where to seek them, ask an average person standing at the bus stop. This economy is an easy fix if you face the real problems…and not soap-up public eyes that since they cant get a loan, economy is tumbling…
From Mike, Atlanta, GA Here is an idea… how about we all find a way to make them legal. As an employer of migrant workers, I can speak first hand to this issue. In order to stay in business, and serve people like all of you that are complaining,I must employ workers that will work for $10 an hour. Otherwise my product would be priced out of the market. Now if you are willing to get all of your fat, cheesy puff eating, playstation playing kids off the couch and teach them a level of responsiblity and self respect for hard work, I will be more than happy to give them a job. But as long as they take breaks every 15 mins and dont know what "work" is, I will continue to employ migrant workers! And for the record, unless you are of American Indian decent, which I am, YOU ARE ALL MIGRANT WORKERS!
From Randy Buffalo, NY Let them move to Mexico and Brazil. They can then sell their product to the people of those countries. Not only is the labor cheaper but they can ruin the environment to their hearts content!! There are many costs other than labor connected with producing cars.I for one one will not buy from them. There are other manufacturers in the USA.
From Charles, Hickory NC Indeed, and this is the exact reason that GM and Chrysler are taking 1 billion each, of our BAILOUT money, and moving out of the US, to Mexico and Brazil, respectively, so they can become profitable. Why do you think they were in a frenzy to pay off the American workers, and get them off the pay roll?
From SF guy, SF California Let them work – make they pay taxes to help cover the costs of the services they use when they are here.
Fix the archaic systems and processes for checking worker status – applying for worker status so that it is cost effective and quick to do.
By the way many illegals are going home right now because there is no work to be found ie the housing market crash.
From izack, los angeles well americans are lazy to do they job and they expect more money. i do agree that all illegal ppl should not be hired but it seems like the patrol is not doing a good enough job to stop all this.
From SF guy, SF California The largest issues with this problem is the time, cost and complexity involved in checking the status of a worker being hired.
CA, AZ, TX, all have very large problems with Illegal residents. The largest being the cost associated to health care, Public schooling, and even auto insurance costs given these states tend to have a very high rate of uninsured driver/accidents many directly related to the illegal resident.
As an employer it is not cheap, easy or quick to check for 100% legal status. Also the jobs that many of these men and women do are jobs that "Americans" will not do or are not cost effective vs skill. Yes I said it some illegal Residents have skill sets that are quite good for the level of pay we are capable or willing to pay for.
Every time the US economy takes a nose dive the protectionism and turn within human nature sufaces and all the comments posted on this thread are heard century after century almost word for word. There are ways to fix it but the general public never sees the value in voting or paying for them.
My family has been in the US since the 1800's and even I'm the product of a migrant worker looking for a better life. There are way to fix things and there are ways to simply ignore or limit the issue. We voted Obama in because he has shown that he can listen change his mind if needed and influence the GOV policies to do the things we so badly need to happen in the US.
From Randy, Buffalo, NY It seems strange to me that illegals of any kind would have constitutional rights. When these people are caught they should be deported right away. You don't have to be the brightest bulb on the string to figure out that they will not be back for a hearing. I would say the constitutional rights of the legal american citizens are being violated!! Another case of the honest taking a back seat to the dishonest. ENOUGH OF THIS!!!!!!!!!
From Bruce, Los Angeles, CA The illegals do not take jobs, they create jobs. Without this huge, cheap labor force, many of these companies would never have done business in the US in the first place. When factory jobs were posted at my last company, only Spanish speaking individuals applied, so how are they taking jobs away from US citizens?? If they were illegal, they all had green cards and social security cards. How do we know if they are valid documents?? If someone wants an available job and no one but someone illegal wants it, why they shouldn't have it?? My only beef is they should learn English.
From Sau Why don't we realise that more and more businesses (small and big ones) are turning out to be NON-PROFITABLE due to rising costs. Costs of production and labor are going up, sales isn't. That is what leads to companies hiring cheap foreign labor. Immigrant workers are willing to work for less than the regular american citizens. That is why the companies prefer hiring them.
Whatever consumption takes place in the economy goes towards buying Chinese goods from Walmart. This leads to hitting the Manufacturing industry further.
With more American losing their jobs, the overall spending and consumption is decreasing. We are stuck in a Vicious cycle that only Govt Policies can fix. President Obama better do something quick.
From Sen, Ann Arbor, Mi. Matt,
Is "Mexican" the only term you have to define illegal? Why do you choose to naively assume that legal status goes hand in hand with color?
As for your patio, did you go for the lowest price? Then you shouldn't have been surprised at the work crew you got for the project, nor the raid.
From McDonald It's not about illegals… it's about SIN in the world and the U.S. take out prayer in school, same sex marriage, and many more evils. Repent or else…
From David W. Camp I think buisnesses should lose their buisness license for having illegals on their payroll.
From Charles, Hickory NC How about this…
How about NOT HIRING illegal workers, period. Plenty of American's out there, without a job, and you guys want to pinch pennies and get slave labor, and are worried about how to maneuver around the legal system to do it.
This is the reason America is in the HOLE it is today.
Shameful, on all counts.
From Matt, Detroit, MI This is my biggest concern with the stimulus package; billions of dollars are going to be spent on infrastructure. How many road crews do you see that have several “Mexican” workers. I had an incident at my own; I hired a company to install a new cement patio. The US border patrol raided the crew and arrests all five workers. Two days later the same crew was back working at my house. The employer paid the fines and all the workers were scheduled for a deportation hearing. Which none of them planned on show up for. I also talked with two of the border patrol agents, and I was told that they are not allowed to check the road crews. They said that there was to much politics to deal with.
This needs to change or the estimated 25,000 jobs that are to be created in Michigan will not go to US citizens and our money will end up in a different country.
From steven, phoenix, az. I live in Arizona.. the illegal capitol of america. However, no one gets punshed.. actually the business will be rewarded…Ask any one in congress they will tell you the same thing.. the "minority" illegals have consitutional rights..so as long as you are mkaing money.. don't worry.. a few bucks in the pockets of politicians will take care of it.
Wanting 'more for less' as you put it, is what has fueled the technological revolutions of the past and current times. And its the fact that minimum wage is above market-price for labor that businesses hire illegal immigrants, so they can pay a fair market-price.