Legal Pitfalls of Hiring Undocumented Immigrant Workers

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 About Hiring Undocumented Foreign Workers, and Does ICE Mean What It Says?

The federal agency responsible for immigration worksite enforcement is Immigration Customs and Enforcement (ICE). In 2012, the agency developed what it characterizes as a "comprehensive worksite enforcement strategy." (See http://www.ice.gov/worksite/.) 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.

Under the Trump administration, ICE conducted several "raids" on various businesses to ensure compliance with immigration law, which resulted in mass arrests of undocumented workers and fines and penalties for the employers who hired them. The Department of Homeland Security ended these raids in 2021, but the sentiment in cracking down on employers who hire undocumented workers remains. ICE provides an online tip reporting system and phone line for people to report instances of illegal immigration activity, so employers should ensure they are following all immigration laws in their hiring practices.

As an employer, you should conclude that you are in legal peril if you knowingly employ undocumented immigrant workers. That's true 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 Foreign-Born Worker'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 various 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 of acceptable documents 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 is 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 might not be authorized to work in the United States, 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 a worker is undocumented 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 must be careful how you proceed with such information and avoid jumping to conclusions. SSA database discrepancies don't always mean unauthorized workers, as the SSA "no-match" letters themselves explicitly state. 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. Also, the laws on who is considered an independent contractor are strict; the U.S. government is wise to employers trying to use this category of worker as a way of avoiding various responsibilities.

Penalties and Fines for Hiring Undocumented Immigrants

You could 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.

Consult an Attorney

When in doubt, an employment-law attorney can help you figure out your obligations and whom you can safely hire.