Keeping It Legal

By Hannah Wallace April 30, 2007

Despite rising anti-immigration sentiment, U.S. law has been lenient on employers who hire illegal immigrants. That may change. Employers in the construction, hospitality and agriculture industries may soon begin to feel the political backlash in the shape of new regulations and stepped-up enforcement. We asked Andrew Froman, a Sarasota-based attorney with Fisher & Phillips LLP, one of the nation’s largest labor law firms, what Sarasota-Manatee employers should expect, and what they can do to brace for impact. 

What federal regulations are changing? A proposal would change the rules regarding what Social Security must do when it learns that an employer has Social Security numbers that don’t match the identity of the worker. Up to now, Social Security annually sends employers letters that list employees whose Social Security numbers don’t match their name. [The intent was] to correct the error so the employee who is putting money into the system can collect benefits at retirement. The employer would then ask the employee to bring in the correct spelling of their name or the corrected Social Security number. If an employer got back information that appeared to have been corrected, [he or she] provided it to Social Security, and the employee went on working. The letter specifically warned [the employer] not to use the mismatch as a means of discipline or to terminate an employee.

That’s changing now. Last summer, a recommended change said that when the Social Security mismatch letter comes, and an employee brings back a new Social Security number, the employer is obligated to either telephone or contact Social Security on the Internet to verify the validity of the new number. If the employee cannot provide a valid new number, [that person] can’t continue working.

When will this become the rule? Under federal regulations, there’s a comment period, which ended in August 2006. The proposal has been sitting since then. With the change in Congress, it appears President Bush’s idea to establish a guest worker program under which people can come to work here legally, and illegals can start applying for legal residency, has gained some footing. That’s why this thing has been held up.

Should employers take note? Absolutely. There are employers—and I have a very large client in the construction industry here—who decided to implement the proposed regulation, even though it’s not yet the rule. They’re telling all the workers who were identified in Social Security mismatch letters to get new Social Security identification. If my client can verify the numbers, the employees will be able to remain; if they can’t, they will have to find legal workers to replace them.

What’s the penalty if they don’t comply? The Department of Homeland Security will seek to enforce the penalties already existing in federal immigration statutes. Maximum penalties for knowingly hiring or harboring an illegal alien are 10 years in prison, a $250,000.00 fine or both. The proposed regulation says employers will have 14 days from the date of the mismatch letter to obtain new (accurate) identification from the employee, and are then obligated to verify the new ID via the electronic records of the SSA. If no new ID is brought and verified within 14 days, then the employee is obligated to fix the problem within 60 days, or else be terminated. Any new ID brought to the employer within 60 days also must be verified. 

Should companies expect higher turnover? Initially. But a prudent employer will attempt to verify Social Security numbers the first time, so they [won’t] have to go through that process one year later. After a year, you have invested time, training and money in an employee. It’s expensive to replace people.

Employees can produce fake IDs. Will tighter Social Security check-ups change that? There’s an industry that caters to the illegal immigrant population, particularly Latin American immigrants, to provide workers to the construction, hospitality and agriculture industries. Most employers, especially small employers, don’t have the means to check identification. What you may see is a movement away from Social Security numbers being used by immigrant workers as a means of identification, to Green Cards, guest [worker] visas, birth certificates, driver’s licenses.

Are they acceptable forms of identification? Under the I-9 system [the IRS employee eligibility form], it’s the employee’s choice what forms of identification to bring. They have to bring two that appear to be legitimate from the employer’s view, without the employer examining it excessively or demanding its source.

What do you recommend your clients to do to be safe? Follow the rule as it still exists. I predict that before this year ends, maybe even before this summer, this proposed rule or a nuance of it will be in place.

Will these proposed changes increase the threat for the average employer? If—and only if—any rule that changes comes with thunder. They will need to hire the people necessary to do the enforcement.

So no immediate threat to ‘illegal’ employers? The large agricultural producers, the large construction companies, the large hotel and restaurant chains shown to knowingly continue retaining illegal immigrant workers—they’ll get smacked.

How liable is a developer for the illegal employees of subcontractors? I think it would be very difficult to make the argument stand up in court that the developer knowingly retains a general contractor, who knowingly retains subcontractors, who knowingly retain illegal workers. That’s quite a tier of defense for a developer.

Next to hiring illegals, the most profitable labor arrangement is guest workers. Agribusiness has been using them for a long time. Large hotels in the area are just beginning to use H2B visas. Is it going to spread? I can see it spreading in the hospitality industry, especially large corporations that own restaurant chains or groups of restaurant chains. They know their work crews, servers, clean-up crews and kitchen help are all immigrant workers who want to be legal. They could create a mechanism where they could go to other countries, find the workers they want, bring them here with guest worker visas and find them housing. That may also mean that you have to pay $60 for a steak instead of $30 for a steak. But if the people are willing, and the economics allow for it, we’re going to see it happen.

Construction? It will be difficult for most subcontractors [to get into guest worker programs] because they’re small and don’t have the kind of financial wherewithal necessary to obtain and keep their own group of guest workers on a regular basis. Construction is seasonal, too. You can’t commit to bring in a group of workers for a 12-month or 18-month period, when in fact your jobs may [last] four months, and you have downtime before you get another one.

Should employers be scared? Keep informed. Read the paper, listen to the news, pay attention to the industry newsletter. Every industry that hires immigrant workers needs lobbying organizations—the hospitality association, the Florida Nursing Home Association, the Gulf Coast Builders Exchange. If you have legal counsel for other employment issues, those folks also will be knowledgeable. Don’t bury your head in the sand. That’ll come back and haunt you.

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