The Legal Impact To a Company Hiring Undocumented Workers

The hiring of undocumented workers has serious implications for any business under U.S. law. Business owners and hiring managers need to be aware of the laws and penalties so they can be avoided. Simply, it is illegal to knowingly employ an undocumented worker. Employers can face both federal and state penalties that can include fines and imprisonment.

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What is an Undocumented Worker?

The first thing to know is exactly what constitutes an undocumented worker. An undocumented worker is a “foreign born” person who has entered the country “without inspection” or who has stayed “beyond the expiration date of a visa or other status” . This means that a person originally hired as a legal worker could potentially become an undocumented worker, and an employer would be legally obligated to terminate them at that time. The reverse may also be true. If the person originally enters illegally, but they subsequently gain legal status, then they can be considered a legal worker at that time.

What Responsibility Do Employers Have?

The wording of the law is very deliberate in its use of “knowingly.” If a person has no reasonable proof or evidence that a person was undocumented, and they have taken all the reasonable steps to prove that the person was documented, then they are not liable for that person’s illegal status. Employers must at the least verify status by filing an I-9 form and ensuring that the status is approved. They must also be aware and take some action in the case that they receive notices questioning the person’s legal status. For example, if an employer receives a notice that the person’s name does not match their social security number, then the employer should investigate. Taking action quickly is slippery slope, however. If the employer jumps to conclusions and fires the employee without due diligence based solely on such a notification, and the worker was in fact legal, then the employer could face a discrimination lawsuit.

The responsibility to investigate is termed “constructive knowledge” under the law. That means that the person should reasonably have known of the worker’s legal status with some simple investigation. The law does not expect every employer to be an expert on immigration law.

The Overzealous Employer

While taking due diligence is a good idea, it is possible to be penalized for being too specific or exacting. Similar to the firing situation above, if an employer refuses to hire a documented worker because of unreasonable requests about documentation, then they can be sued for discrimination. The law protects workers in this case, requiring employers to accept “reasonable” I-9 verification.

Independent Contractors

If an employer hires an independent contractor, then are required to at least verify the legitimacy of the company that employs the contractor. They are not generally required to investigate the contractor personally.

State Laws

While most penalties related to hiring undocumented workers are within federal law and apply to all states, state governments do have some authority over how they handle workers. California is a prime example of a state that provides blanket protections to all workers regardless of legal status. This means that an employer could face double prosecution for certain situations. They would face federal prosecution for hiring an illegal worker, and they would face state prosecution for violating that same worker’s basic rights, such as the right to minimum wage and safe working conditions (https://www.dir.ca.gov/QAundoc.html).

Penalties

The penalty for hiring undocumented workers grows based on the number of offenses. The minimum is $375 per employee for the first offense and up to $1,600 per employee for subsequent offenses. If an employer is consistently found to be in violation, then they could face up to $3,000 per employee and up to 6 months jail time .

Knowing the law and following it to the best ability is usually enough to protect an employer from any liability.