How does illegal worker enforcement work?

Since July 2005 the New Hampshire Department of Labor has cited 38 employers for illegally employing undocumented workers — 5 percent of the 710 investigations conducted by Labor Department investigators.

The majority of those cited were first-time offenders, many of whom were unaware that they had been employing undocumented workers, according to Labor Commissioner George Copadis.

But the percentage of illegal workers in New Hampshire’s employment force – most of whom are found in transient industries or those requiring less skilled workers, such as construction, landscaping, commercial cleaning and restaurant and lodging – is likely higher than 5 percent, according to people in the industries themselves.

Many of the illegal workers remain under the enforcement radar because they are classified as “independent contractors,” according to Liz Skidmore, business representative and organizer for Carpenters Local 118.

“There’s a number of illegal workers making up the misclassified workers,” said Skidmore, who says that many people listed as independent contractors are labeled as such merely to circumvent state and federal labor laws. “If I’m a contractor who wants to break the law by hiring independent contractors illegally, I want to hire people who are strong, capable and not going to talk. Hiring illegal aliens gives them the added guarantee that they’re not going to say something for fear of losing their job or getting deported.”

Employers and employees in the commercial cleaning industry have voiced concerns over illegal workers being labeled as independent contractors by competitors. They say those workers are paid lower wages with no benefits, allowing the firms to low-bid jobs, competing unfairly with companies that follow labor laws.

Still, while retail giant Wal-Mart made national headlines last year after being ordered to pay $11 million in penalties for utilizing such workers in New Hampshire and elsewhere around the country, Copadis said the issue facing New Hampshire is less extreme than in other states.

Documented cases in New Hampshire are less frequent and the majority of employers cited for infractions are either unaware that they’re in violation or have not been cited for employing illegal workers previously, said Copadis.

“Often times we’ll find an employer who might have hired a worker with a legal working visa which has expired without the employer being aware of it,” Copadis said.

Other times, a worker may have supplied the employer with false information.

In cases in which infractions are discovered, employers are fined between $100 and $1,000 per day for each day they have been out of compliance with labor laws. Fines increase based on previous convictions.

Owners of the Panda House restaurant in Hanover, for example, had been repeatedly cited for hiring undocumented workers. The last finding earned the restaurant owners a fine of $100,000. A civil arrangement was agreed upon, however, and included a $25,000 payment and orders not to reopen any restaurant within state borders. If they do, they will be required to pay the remaining $75,000.

The bottom line

Investigations by the Labor Department into illegal hiring practices as well as other labor-related issues are prompted in part by complaints filed with the agency. If the need for an investigation is determined, the company in question is notified and an on-site visit by labor investigators is scheduled.

“We go into the business and review federal ID numbers, payroll records, cancelled payroll checks, youth employment records, and unemployment and workers’ comp files, among other things,” Copadis said in explaining the investigation procedure. “We don’t go in specifically looking for illegal workers.”

If violations are discovered, employers are given the opportunity to address the charges, Copadis said.

“If it’s a first-time offense or the employer can show he did not know a worker was illegal, we’ll come up with some arrangement,” he said.

The Social Security Administration will also impose sanctions against employers of illegal workers, although their concerns relate to the use of incorrect or bogus Social Security numbers. All individuals eligible to work legally in the United States must present their employer with a Social Security number; workers gaining employment illegally often do so by creating a false number.

“Every information document that comes in goes through a matching process,” said SSA spokesperson Peggy Riley. “If a number from a W2 doesn’t match up, the company is notified and given a period of time to rectify the situation.”

Employers are fined $50 for each report that contains an incorrect or missing Social Security or taxpayer identification number. If the situation is corrected within 30 days, the fine can be lowered to $15. The fine can be waived altogether if the employer can show reasonable cause, including “significant mitigating factors” or proof that the employee did not provide a correct name or number when he or she was hired.

False Social Security numbers also grab the attention of the state Department of Employment Security, according to Deputy Commissioner Darrell Gates. While the agency is not directly involved in the prosecution of offending employers, it too will notify employers when Social Security numbers accompanying quarterly unemployment reports are found to be faulty.

“In most cases, we find that after contacting the employer they’ll either tell us the employee has moved on or did not return to work when asked to provide a copy of his Social Security card,” Gate said. “In New Hampshire, we haven’t seen a huge rise in this but we’ve never seen a huge number of these cases. A federal agency is the last place illegal workers want to go.”

Whether it’s state Labor Department- or Social Security-related enforcement, the bottom line is that it’s the employer who is hit in the wallet. But the sanctions often carry with them greater ramifications for the undocumented employee. In many cases either translate into job loss.

“I think the real problem with employer sanctions is that the employer can show his complete I-9 forms (those documenting employee’s proof of legal status) and claim compliance. The employer is not required to be a document specialist, so he has a defense built into the law,” said immigration attorney Mona Movafaghi. “The alien employee is the one who suffers as he gets terminated or put into proceedings.”