Many employers already know that you cannot hire someone who does not have the right to work in the USA. That means that most illegal immigrants (unless granted work authorization) cannot work for a business. The legal problems from hiring someone without proper work authorization can be very significant. As Fox News reports, there was a recent article where ICE fined businesses over $8 Million dollars for unauthorized workers. See the link to the article below.
https://www.foxbusiness.com/industrials/denver-businesses-fined-over-8m-total-knowingly-hiring-unauthorized-workers-ice
Are there other problems beyond immigration if I hire undocumented workers?
Yes, by hiring undocumented workers (often paid in cash), there are problems beyond just the immigration issue. Please note that there are also other problems with hiring undocumented persons. Often undocumented people ask to be paid in cash, rather than by check or bank transfer. Because of this, generally, most employers don’t run it thru payroll. Because it is not run thru payroll, you have the following problems:
- No state of federal income taxes are paid.
- No unemployment insurance is being paid
- No Workers’ Compensation insurance is being paid
- No Medicare and Social Security is being paid.
- You may not be able to deduct the payroll since you cannot document it, if audited.
So, in addition to ICE, you also risk violating a whole host of federal and state laws. It is criminal to fail to pay state or federal taxes and failing to provide workers’ compensation is also illegal.
The legal risks of improper employment practices extend far beyond immigration issues. A knowledgeable business attorney can help you understand all the compliance requirements and avoid costly penalties.
Can I go to jail for paying cash?
It is possible because if you are not paying taxes, that is criminal and can lead to jail time. Just don’t do it.
How can you avoid the problem?
Always ask for and check the identification documents for all workers. Always ask for social security number for every worker. You can also use www.e-verify.gov To verify each worker’s right to work. Be sure to setup payroll (with proper withholdings) for each employee and pay them to their bank account, not by cash.
Can an undocumented worker sue me claiming they were not paid because I paid in cash?
Yes, undocumented workers in California have the right to sue in Court just like legal residents. Their immigration status does not (and will not) affect their legal claims in Court or other proceedings. Plus, if you pay in cash, it may be hard to prove that you properly paid the worker. So, you might have to end up paying twice.
But the Worker asked to be paid in cash, does that make it ok?
No. Regardless of whether the employee insisted on being paid in cash, do not do it. You, as the employer still have the obligation to collect and deduct taxes, unemployment, social security and medicare. You are inviting a whole bunch of problems, so don’t pay in cash.
Employment law compliance requires strict adherence to federal and state requirements, regardless of employee requests. An experienced business lawyer can help you establish proper payroll systems and avoid these serious legal risks.
Protect Your Business from Federal Penalties and Criminal Charges
The consequences of improper employment practices can be devastating – from multi-million dollar ICE fines to criminal tax charges and worker lawsuits. Don’t risk your business and personal freedom by cutting corners on employment compliance.
Contact Nick Heimlich Law immediately to review your employment practices and ensure full compliance with federal and state requirements. Our experienced legal team can help you implement proper verification procedures, establish compliant payroll systems, and protect your business from these serious legal risks. The cost of prevention is minimal compared to the devastating consequences of non-compliance.
