Are All Your Workers Legal?

Are All Your Workers Legal by Alan Krystal

{3:53 minutes to read} With the subject of what to do with illegal immigrants being a hot topic of debate in the 2016 presidential campaign, it should be noted that there is no debate as to the state of the law; any business that hires a worker not legally authorized to work in the United States faces significant civil and, in some cases, criminal liability.

Under the Immigration Reform and Control Act (IRCA), a company that knowingly uses illegal workers can be fined as much as $10,000 per worker. The employer also can face up to 6 months in jail if a pattern of violating the law is found. In addition, a conviction for harboring illegal workers (knowingly employing 10 or more individuals with illegal status in a 12 month period) can lead to imprisonment of up to 10 years.

The wording of IRCA explicitly makes anyone knowingly using illegal workers liable, even if a formal employer–employee relationship does not exist. In 2005, Walmart paid $11 million in a lawsuit settlement because one of its contractors used illegal workers. Since there was evidence that they were aware of in this practice, Walmart lost its argument that it should not be responsible since Walmart did not directly employ the workers.

Form I-9

Employers must complete an Employment Eligibility Verification Form, also known as a Form I-9, for each employee. The form requires that each person who applies for work should provide proof of identity and employment eligibility. All employees must complete the Form I-9 no later than 3 business days after the employee begins work.

The form must be retained for 3 years after the date of hire and 1 year after the date of termination. Failure to maintain this form or to collect and record the proper documentation can result in significant civil penalties. Therefore, if the proper paperwork is not in place, a business can be fined, even if their workforce may be 100% legal.

E-Verify System

In addition, all employers doing business in Alabama, Arizona, Georgia, Indiana, Louisiana, Mississippi, Nebraska, Missouri, South Carolina, Tennessee, and Utah are required by statute to use a federal government E-Verify system to check new hires.

Employers can register at E-Verify. E-Verify, also known as the Basic Pilot, is the secure internet-based system operated by the U.S. Citizenship and Immigration Services (USCIS) within the Department of Homeland Security, in partnership with the Social Security Administration. E-Verify allows participating employers to electronically verify the eligibility of their newly hired employees.

Employers can register for E-Verify online by completing an application and signing a Memorandum of Understanding, which is necessary to officially participate in the program. Once registered, users must take an online tutorial and pass a test prior to using the system. There is no cost for registering for the program.

E-Verify users enter information captured on the I-9 for all newly acquired employees, no later than 3 business days after the new hire’s start date. E-Verify compares employee information for both citizens and noncitizens against the more than 425 million records in its database. The end result is a confirmation or non-confirmation that provides employers with a greater sense of security since it is possible that the documents provided may not be genuine.

While the debate goes on about what individual rights an undocumented person should have, it remains clear that the business that hires that person is risking severe legal consequences. And even if that prospective employee is legally authorized to work in the US, the failure to maintain proper I-9 documentation could also result in significant penalties. Therefore, every business must make I-9 compliance a top priority and should take advantage of the E-Verify program.

Alan Krystal


Alan Krystal

Alan H. Krystal, P.C.
631 780 6555