I often have clients who want to know the basics of hiring undocumented workers, so I have prepared this guide to address the topic. The information in this guide is general information, however.
An "undocumented" worker is someone who is not authorized to work in the US.
The term most often refers to an illegal alien -- being someone who is in the United States without any authorization to be here or work here. It can however, also refer to those who do have permission to be here but not permission to work here. For example, it could be someone authorized to be here as a tourist or a student, but not authorized to work. It can also refer to anyone, legal or illegal, that is paid "under the table."
The employer has a legal duty to verify that each employee working for him is authorized to work in the US. This is the duty of the employer, not the employee. The employer is obligated to verify the employee's authorization to work by taking a copy of certain documents. They are recorded on USCIS form I-9, which is discussed below.
An I-9 is a government form that is issued by the Department of Homeland Security (DHS) / United States Citizenship and Immigration Services (USCIS). The form can be found here: USCIS I-9 Form.
Form I-9 is not filed with the Government. There is no filing fee for it. However, the employer must fill it out and keep a copy, along with a copy of the documents that it used to verify the employee's identity and their right to work in the US. The USCIS has put forth a list of acceptable documents. It can be 1 copy of any document listed in "List A" or 1 copy of a document from List B (establishing identity) and from List C (establishing the right to work):
Common List A documents include: a US passport, a green card, or an employment authorization (EAD) card.
Common List B documents include: a US state driver's license or state ID or a school ID
Common List C documents include: a US birth certificate or Social Security Card with no restriction.
An I-9 audit is just what it sounds like: an audit by the Government to verify that an employer has correctly verified the right of its workers to legally work in the US. I-9 audits are conducted by the Immigrations & Custom Enforcement agency (ICE).
Under the Obama Administration, I-9 audits have increased dramatically. They have risen from 500 audits to over 2500 in the first term of the Obama administration. I-9 audits can result in fines from $110.00 - $1100.00 per violation. As such, they are a good source of revenue for the government and the Obama administration is targeting businesses to get that revenue.
An I-9 audit typically begins with a Notice of Intent (NOI) to inspect a company. It can be prompted by a tip-off from an angry employee or a consumer. In that stage, the government will want to visit the company and/or inspect its corporate records and I-9 verifications and business licenses and premises.
If you are selected for an I-9 audit, or you do work in an industry that is known for employing illegal workers (construction, agriculture, landscaping, hospitality, restaurants, manufacturing), then you SHOULD consult with an immigration attorney if you have not already done so!
The penalties for failing to verify employees can be very severe. They can range from $110.00 to $1100.00 per technical violation. Remember, employers have a duty to verify employment authorization for ALL of their workers.
The penalties can be higher for companies with a large percentage of undocumented workers or a history of violations. In determining penalty amounts, ICE typically considers five factors: the size of the business, good faith effort to comply, seriousness of the violation, whether the violation involved illegal workers, and a history of previous violations. If violations are found during an audit, ICE will then issue a Notice of Intent to Fine.
Texas employers were fined over $600,000.00 in 2009, for example. With the economy being in trouble, it does not appear as if that will lessen.
Finally, it should be noted that domestic workers can be treated a little differently. A domestic worker is someone who is employed to perform household tasks such as cleaning or childcare. This can be a maid, a nanny, a gardener, or a sitter for an elderly parent.
An I-9 needs to be filled out for such domestic workers. Other employment laws can also apply. There is an exception if the worker is "sporadic" or employed through an agency. There may also be an exception if the worker is an "independent contractor," but in that case a 1099 would need to be issued.
If you do hire domestic workers or own a business, I strongly recommend that you speak with an immigration attorney who can counsel you in these issues.