Legal Pitfalls of Hiring Undocumented Immigrants

U.S. law makes employers a central player in carrying out immigration restrictions; learn more about your role here.

Before 1986, employers didn't risk much in hiring undocumented immigrants. The worst that could happen was simply losing a worker through deportation. Beginning in 1986, though, the worksite has become an enforcement site for immigration law, with employers required to check the work authorization of every worker they hire on pain of penalties and even criminal prosecution for hiring workers who do not present appropriate documents. (See Hiring Foreign Workers for Your Business: First Things to Know for a general discussion of the employer's responsibility for verifying work authorization.)

ICE Policy: What Does ICE Say, and Does ICE Mean What It Says?

The federal agency responsible for immigration worksite enforcement is Immigration Customs and Enforcement (ICE). As of 2012, the agency has developed what it characterizes as a "comprehensive worksite enforcement strategy." (See ICE claims to focus its enforcement efforts on two areas:

  • worksites that represent "critical infrastructure," such as airports, seaports, nuclear plants, chemical plants, and defense facilities, and
  • employers who abuse and exploit undocumented workers.

The ICE press releases collected at the worksite enforcement webpage don't bear this out, however. While a couple of the reported enforcement actions do involve workers at airports and a couple reflect egregious exploitation of workers, the main pattern that emerges from this long string of ICE press releases is of actions against ordinary businesses (restaurants, landscapers, construction companies, food processing plants, small manufacturers, and so forth) for "harboring" illegal aliens; that is, for knowingly preventing their detection.

As an employer, you should conclude that you are in legal peril if you knowingly employ undocumented immigrant workers, even if your business is not part of the "critical infrastructure" but just a small business trying to get by, and even if you treat your workers fairly.

What If You Didn't Know Your Employee's Papers Were No Good?

Employers are required to confirm the work authorization of every new hire at the time of hire, using Form I-9 for the purpose. You are not, however, expected to be an expert on the documents that establish work authorization.

In fact, an employer can be penalized for discrimination for checking documents too zealously or insisting on a particular document, such as a green card. The way the rules put it, you should accept documents from the I-9 lists that "reasonably appear on their face to be genuine and to relate to the person presenting them."

If that standard doesn't strike you as crystal clear, you are not alone. Still, if you are acting in good faith and following the I-9 procedures, you should be safe from liability if ICE discovers that one of your workers has presented bad documents.

A formal I-9 compliance policy might be a good way to demonstrate your good faith. You might also want to check out ICE's IMAGE program, through which ICE becomes "your workforce compliance partner" (though surely this partnership will not suit every employer).

If any information comes your way, subsequent to hire, that suggests a worker may not be authorized to work in the U.S., you should look into it. The reason for this is that employers can be held liable not only for actual knowledge of a worker's undocumented status, but also for "constructive knowledge"; that is, basically, for having reason to know.

Having reason to know might be, for instance, receiving notice from the Social Security Administration (SSA) that someone on your payroll is using a Social Security number (SSN) that doesn't match the name for that number in the SSA database. Again, though, you have to be careful how you proceed with such information, always avoiding the leap to a conclusion. SSA database discrepancies don't always mean unauthorized workers, as the SSA "no-match" letters themselves explicitly state, and hasty action on partial information could lead to a discrimination claim.

Can You Avoid the Whole Problem By Hiring Independent Contractors?

You are not obliged to confirm the work authorization of anyone you hire as an independent contractor. If, however, you know or have reason to know that an independent contractor is not authorized to work in the U.S., you can nevertheless be held liable.

Penalties for Hiring Undocumented Immigrants

You may be subject to civil and criminal penalties for hiring undocumented immigrant workers. Civil penalties range from a minimum of $375 per unauthorized worker for a first offense up to a maximum of $1,600 per worker for a third or subsequent offense. If you are found to have engaged in a "pattern and practice" of hiring undocumented workers, then you can be fined up to $3,000 per employee and/or imprisoned for up to six months.

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