Illegal immigrant or independent contractor?

By Philip J. Siegel, Professional Roofing, August, 2005

As the roofing industry becomes more reliant on an immigrant [illegal alien] work force, reviewing and refamiliarizing yourself with immigration and employment laws can save you a great deal of headaches and possible exposure to liability....

The Immigration Reform and Control Act (IRCA) of 1986 requires employers to verify every employee they hire is legally entitled to work in the U.S. IRCA makes it illegal for any U.S. employer to hire, recruit or refer for a fee an alien known to be unauthorized to work; continue to employ an alien known to be unauthorized; and hire, recruit or refer for a fee any person (citizen or alien) without following the act's recordkeeping requirements.

If you knowingly hire illegal immigrants or permit illegal immigrants to work after discovering they are not legal, you face fines and penalties. Fines and penalties also are assessed against employers who fail to document compliance regardless of whether any of the employees are illegal. Fines range from $100 to $1,100 per employee for paperwork violations depending on the employer's size. Fines jump to $250 to $11,000 per each unauthorized [illegal] alien employed. However, there are two exemptions.

The first exemption is known as the "grandfather" clause, which exempts those unauthorized aliens hired on or before Nov. 6, 1986, the date of the law's enactment.

The second exemption applies to "independent contractors."

Although you are not required to verify whether independent contractors and employees of independent contractors are authorized to work in the U.S., for this exemption to apply, you must be able to prove the relationship is one of a true independent contractor....

... the days of turning a blind eye to employees of independent contractors are gone. Employers are beginning to rethink their approaches to independent contract labor, especially in the construction industry, because of a recent $11 million settlement the U.S. Immigration and Customs Enforcement (ICE) reached with Wal-Mart Stores Inc., Bentonville, Ark., over allegations of immigration violations...

...protect yourself from a subcontractor's employment of illegal aliens. As mentioned, the proper and best mechanism to protect yourself from this liability is through subcontract agreements.... the Wal-Mart case, U.S. Immigration and Customs Enforcement (ICE) alleged Wal-Mart Stores Inc., Bentonville, Ark., had direct knowledge of immigration violations involving its independent cleaning contractors at stores across the U.S. As part of its investigation, ICE agents engaged in a raid of the company's headquarters and 60 of its stores, arresting more than 250 employees of independent contractors in an immigration crackdown.

On March 18, 2005, Wal-Mart agreed to pay $11 million to settle allegations that it knowingly used illegal immigrants to clean its stores. As for the contractors that actually hired the illegal laborers? They pleaded guilty to various criminal charges and paid fines of about $4 million.

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