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The
risk
of hiring undocumented workers
June 10,
2010
While
the passing of Arizona Immigration Law SB1070 has turned up the volume
on the debate over illegal immigration, we will quietly explore how
this and other legislation can affect your company.
Recognize the risks
to your bottom line. The
risks of hiring undocumented workers
are real and substantial. For each undocumented alien hired before
September 29, 1999, an employer can be fined $250 – $2,200
for a first offense. If the offense occurred after this date, the
financial penalty rises to $275 – $2,200 for each
undocumented alien. For a second offense, the penalty increases to
$2,000 – $5,000 for each undocumented alien hired before
September 29, 1999. On or after that date, the penalty increases to
$2,200 – $5,500. For
third or subsequent offenses, the penalties increase as high as $11,000
for each offense.
The
same risks apply to companies that hire contract workers.
The penalties listed above are not limited to I-9 employees. If an
employer uses contract personnel who he knows to be unauthorized to
work in the United States, the same penalties apply. Ask questions of
your subcontractors now to avoid burdensome penalties later.
What
is Form I-9? Every employer
in the United States is required to verify that all new employees have
presented “factually valid” documentation that
verifies their identity and legal authorization to accept employment in
the United States. Who says? The Immigration and Control Act of 1986.
The federal government provides The Employment Eligibility Verification
Form, which is informally known as the I-9 Form, for this purpose.
Every employee hired after November 6, 1986 must complete this form at
the time of hire.
Driving
while undocumented. Did you
hear the one about the undocumented alien who gets into an accident
while operating a company vehicle? It’s no laughing matter.
If an undocumented alien gets into an accident while operating a
company vehicle or machinery, the employer can be subjected to
significant fines, be cited by the police and potentially be dropped by
its insurance company. To make matters worse, insurance companies are
increasingly invoking the “negligent entrustment”
clause against policyholders who let unlicensed drivers, including
undocumented aliens, operate their vehicles. Want to learn more about
these two scary words? Just Google them.
In
keeping with our Casual Fridays theme, none of this information is
copyright protected. Please feel free to share with your colleagues.
 About
KMRD Partners, Inc. –
KMRD Partners, Inc. is a full service
Property & Casualty broker serving
the commercial property and casualty insurance market from offices in
the Philadelphia, PA region. Their mission statement,
“Making a difference by Managing the Cost of Risk”,
is a unique approach that focuses not just on insurance placement, but
coverage expertise, service accountability, client education and risk
management.
2600 Kelly Road,
Suite 300, PO Box 755
Warrington, PA 18976
1-866-957-KMRD (5673) Fax 267-482-8431
www.kmrdpartners.com
Reducing the Cost of Risk
- One Client at a Time
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