Penalties for Hiring Undocumented Workers


Photo Credit: 123RF Stock PhotoEmployers have several obligations when it comes to verification of employment immigration status. Under federal immigration laws, an employer is required to verify the employment eligibility of all of its employees; the failure to do so or the hiring of an undocumented worker can result in various penalties. For instance, employers are subject to the following immigration obligations:


  • Employers are required to complete a Form I-9 on behalf of each new employee within three days of employment. If an employer fails to complete the Form I-9, or fails to comply with Form I-9 requirements, the employer faces a penalty of $110 to $1,100 for each violation. In some cases, Form I-9 violations can result in significant penalties. For instance, a $2 million penalty was assessed against ABC Professional Tree Services, Inc. in July 2012 for its failure to comply with employment eligibility verification requirements, and a $34 million was assessed against Infosys Limited for various immigration-related violations, including a $5 million penalty for systematic failure to maintain Forms I-9. Additionally, an employer who signs an I-9 containing false statements may be charged with perjury.
  • Employers are prohibited from hiring undocumented workers. Under immigration laws, an employer that “knowingly” hires undocumented workers can be fined as much as $10,000 per worker. In addition, an employer could face up to six months in jail if a pattern of violating the law is found, as well as a conviction for “harboring” illegal workers, which carries a penalty of up to 10 years imprisonment, if the employer knowingly employs 10 or more undocumented workers in a 12-month period.
  • If an employer receives notification from the Social Security Administration that an employee is undocumented, the employer is required to complete a Form I-9 and refrain from knowingly using illegal workers. In some situations, a notification of illegal status can be the result of a typo, name change, or a computer glitch. An employer should investigate the matter, however, in order to ensure that it is not deemed to have “knowingly” employed an undocumented worker.
  • Employers are required to confirm immigration eligibility of contractors, and not just employees. In fact, the Immigration Reform and Control Act explicitly applies to anyone who knowingly “uses” illegal workers, regardless of whether a formal employer/employee relationship exists or if the worker is an independent contractor.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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