Undocumented Workers: Part 2

The thing is, we have used an underpaid workforce since Jamestown. But I didn’t want to get into that discussion when I addressed the increase in worker documentation audits by the Department of Homeland Security (DHS) at a recent Good Morning, SLO. I didn't want to talk about the $1 apple. I was happy to point out, however, that if one of your competitors is paying workers under the table, at less than minimum wage, then they are also not paying their share of payroll tax and probably not paying for workers comp insurance. Unfair competition, I’d say.

The Department of Homeland Security and other agencies have focused on the little guy for the past 3 years. Documentation investigations, which precede I-9 audits, have increased 8-fold since 2007. 170 business owners have been arrested in 2010 alone. Arresting the owners only started as a supplement to fines a few years ago. The first to be arrested were the owners of the fence company that built the fence between the USA and Mexico. I love it! Yes, the company that built the fence was using undocumented workers. I can just see the sign on the fence: ABC Fence Co, San Diego. And then in small print, in Spanish: If you can get over this fence we’ll give you a job. No questions asked.

So the feds are going to the source of the jobs: the broader the enforcement the better the compliance. As long as we have these laws we might as well enforce them.
It is to the file cabinet or binder of I-9s that the DHS will head if they come to your business. So the I-9 form is the place to start in making sure your workers are properly documented. The fines for failing to do so range from $110 to over $10,000 per worker, so it behooves you to learn how to do this right. By the employee’s third day.

You have the list of acceptable documents on the back of the I-9, and the instructions tell you whether to place the information in List A, B or C on the form. You don't have to be a forgery expert, but you do have to review the originals and you when you sign the form you are attesting that they appear genuine to you.

Few employees carry their social security card or other documents with them, so I recommend telling the applicant when they are hired, what to bring with them on their first day: Whatever info you need to complete the W-4, and the I-9. Give them the list of acceptable docs: you may not tell them to bring their social security card and driver’s license or any other specific document. If you want the social security number for the W-4, that’s fine. And the driver’s license and proof of insurance for driving on company business, also fine. But don’t confuse these requirements with the I-9.

You could be guilty of discrimination: just ask Catholic Healthcare West. Seems they had a habit of asking for more documentation from only the more swarthy looking applicants.

Illegal Workers: Feds are Targeting Smaller Businesses

I had the pleasure of speaking at Good Morning, SLO a few weeks ago. It’s the monthly gathering of 200 or so business owners, managers, and non-profit leaders, mostly members of the San Luis Obispo Chamber of Commerce. I get to speak often to the group, although usually only for a minute or two and to introduce someone or an upcoming event. I usually get a laugh or two and that’s fun for me. But I have to be careful: I once helped introduce an upcoming performance of the very moving Teen Mommalogues and found myself explaining what “Mommalogues” meant by saying it was “the talk my mom never had with me.” I had to bite my tongue to stop there. OK, I admit – I didn't stop there. That’s what I mean about being careful.

When the Chamber first asked me to present the topic of immigration I balked: not a politician, don't want to get embroiled in a no-win debate, etc. Sure, there’s an HR element, but it would be a lot to cover in 5 minutes. And not sure I would get a laugh.

Would I try? Sure: heck, as my friend Marci says, I never met a microphone I didn't like.

The reason I thought the topic was justified? The Department of Homeland Security (DHS) (formerly the INS) has changed its approach to enforcing the laws around documented workers. They used to take years to investigate a big business, often by tracking the labor contractor, then they raided it, fined the owners, and deported hundreds of undocumented employees. Now the DHS is focusing on smaller businesses, expecting a smaller “take”, but figuring to make it up in volume. They are less concerned now with sending the undocumented workers home than they are with shutting down the source: businesses who employ them.

We are seeing a similar shift to volume in other agencies: OSHA and the Equal Employment Opportunity Commission (EEOC) have hired hundreds of investigators, as has the DHS, and they are now pursuing smaller fines. I heard a report that the EEOC levied a fine as low as $20,000 against a business for discrimination. I was shocked. In the past, the EEOC would not bother with any case that did not promise a fine over $100,000.

So even if your business is not AG or hospitality, be sure your documentation is in order. It all starts with the I-9, the form that documents the 1) identity, and 2), right to work in the United States for every one of your employees. Everyone. By the 3rd day of work. Or you have to let them go.

The list of acceptable documents is on the back of the form, and the directions on how to fill it out are pretty clear, but I come across errors by my consulting clients every day. And even the simplest error can cost you: from $110 - $1100 fine for incomplete or inaccurate paperwork. $10,000 for knowing hiring an undocumented worker. As we used to say at Home Depot: Read the directions.