- The Recruiting Life
- Why do companies hire undocumented workers?
Why do companies hire undocumented workers?
Exploitation of labor is hard to resist.
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Stat of the Week
Survey: 83% of Americans hit by passive-aggressive emails from coworkers
Preply surveyed 1000 Americans to learn more about passive-aggressive email communication, the industries that do it the most, and how frequent it is in American workplaces.
“Per my last email” is the most passive-aggressive email phrase according to Americans
65% report coworkers who are friendly in-person turning passive-aggressive over email.
83% have received a passive-aggressive email/message in work communication
47% have experienced a coworker copying their manager/boss on an email regarding a minor issue44% of Americans admit that they have previously sent a passive-aggressive email to someone they work with.
Take a look at the full report here.
Why Do Companies Hire Undocumented Workers?
From the onset, let me just say, I am not trying to be political. I’m just scratching my head and pondering the repercussions of things. Specifically, the number of illegal immigrants that have entered the USA since President Biden has entered office. No one has a definite number but whomever you ask, its always a big number. The Federation for American Immigration Reform (FAIR) said 5.5 million had crossed as of October 25, 2022. On January 20, 2023, the Associated Press reported on a surge in Cuban and Nicaraguan arrivals at the U.S. border with Mexico in December 2022, which led to the highest number of illegal border crossings recorded during any month of Biden's presidency. (And some speculate that its more than we will ever know.) In the past few months however, there has been a significant decline in illegal entries. To quote Forbes magazine…
What comes to mind when I hear about the influx of illegal immigrants (which is not to be conflated with legal immigrants) is how will all these people impact the job market? There are positive and negative implications to be sure.
On the positive side:
Labor Force Diversity: Undocumented immigrants contribute to a diverse and dynamic labor force, bringing a variety of skills, talents, and experiences that enrich the economy.
Key Industries: They play a crucial role in sectors such as agriculture, construction, hospitality, and service industries, helping meet demand and sustaining economic growth.
Consumer Spending: Undocumented immigrants participate in local economies by spending on goods and services, which helps stimulate local businesses and supports economic development.
Social Security Contributions: Even though undocumented immigrants may not be eligible for benefits, they contribute to the Social Security system through payroll taxes, which helps support the retirement of others.
Population Growth: They help counteract declining population trends, which can have positive effects on economic growth and development.
On the negative side:
Strain on Social Services: Some argue that undocumented immigrants could strain public resources such as healthcare, education, and social welfare programs, potentially affecting the availability of these services for legal residents.
Wage Suppression: The influx of undocumented workers in certain industries could lead to downward pressure on wages for both low-skilled and skilled workers, potentially impacting job opportunities and income levels for native-born and legal immigrant workers.
Tax and Fiscal Impacts: While many undocumented immigrants do pay taxes, some might also engage in off-the-books or under-the-table work, leading to potential revenue loss for government agencies.
Legal and Security Concerns: Critics raise concerns about potential national security risks and the difficulty of tracking individuals who may be involved in criminal activities due to their undocumented status.
Unfair Competition: Some argue that undocumented workers might create unfair competition for legal workers, particularly in industries where there is a surplus of labor.
Undocumented immigrants come to the USA for a variety of reasons, chief among them is economic opportunity. I understand immediately how it benefits the worker, but what does it bring to the employer? At a glance, an exploitable labor force. Here are a few examples…
Lower labor costs: Undocumented immigrants are often willing to work for lower wages than native-born workers or legal immigrants. This can be beneficial for employers who are looking to cut labor costs.
Increased profits: By hiring undocumented immigrants, employers can reduce labor costs and increase profits. This is especially true for industries that rely heavily on undocumented workers, such as agriculture, construction, and hospitality.
More flexible workforce: Undocumented immigrants are often willing to work long hours, weekends, and holidays, which can make them a more flexible workforce than native-born workers.
No need to provide benefits: Employers are not required to provide benefits such as health insurance, paid time off, or retirement plans to undocumented workers. This can save employers money and reduce their administrative burden.
No need to pay payroll taxes: Employers are not required to pay payroll taxes for undocumented workers, which can save them money.
While these advantages can be catnip to some fat cat employers, the legal consequences can be severe should they be discovered. Some key considerations…
Civil fines: The Immigration Reform and Control Act of 1986 imposes civil fines on employers who unlawfully hire undocumented workers. The fines can range from a minimum of $375 per unauthorized worker for a first offense up to a maximum of $1,600 per worker for a third or subsequent offense.
Criminal prosecution: Employers who knowingly hire undocumented immigrants can face criminal prosecution. The penalties can include a maximum penalty of six months imprisonment and a fine of $3,000 per worker.
Factors considered in determining fines: The size of the employer, good faith of the employer, seriousness of the violations, previous violations, and actual involvement of unauthorized aliens are factors that can be considered in determining the fines.
Other legal claims: Employers may also face legal claims such as harboring an illegal immigrant or conspiracy to defraud government officials if they knowingly hire undocumented immigrants.
So, do the advantages to employers outweigh the disadvantages and thereby, incentivize risk? Several major corporations think so as evident by the penalties they have paid.
Tyson Foods: In 2019, Tyson Foods was one of several large companies that were raided by immigration authorities for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and was fined $2 million.
Chipotle: In 2010, Chipotle was fined $1.3 million for hiring undocumented workers. The company was accused of not properly verifying the work authorization of its employees.
Walmart: In 2011, Walmart was fined $11 million for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and failing to properly verify their work authorization.
Swift & Company: In 2006, Swift & Company, a meatpacking company, was raided by immigration authorities for hiring undocumented workers. The company was accused of knowingly hiring undocumented workers and was fined $200,000.
Abercrombie & Fitch: In 2005, Abercrombie & Fitch was fined $1 million for hiring undocumented workers. The company was accused of not properly verifying the work authorization of its employees.
Deloitte Insights reports that the labor market is slowing but still very hot, and it is hard to argue that the economy is experiencing a recession when the unemployment rate is low. On the flipside, Bloomberg reports that economists say there is a 70% chance that the US economy will sink into a recession in 2023. Are we trending towards a recession? The jury is still out. If we do land on economic difficulties some companies will be tempted to hire undocumented workers because of the short-term advantages, thus neglecting the legal, ethical, and reputational risks involved. Employers can face serious consequences, including fines and legal action, if found to be knowingly employing undocumented workers. Balancing the potential benefits with these risks is a critical consideration for any company considering this hiring approach. I would not recommend it.
Quick Take: Has AI already surpassed us?
Has artificial intelligence surpassed humans? In some ways, yes. AI has already surpassed humans at a number of tasks, such as playing strategy games like chess and Go, performing surgeries, flying airplanes, driving cars and trucks, and even generating art and music. The rate at which humans are being surpassed at new tasks is increasing. However, there is still a long way to go before AI reaches human-level intelligence, which is referred to as artificial general intelligence (AGI). According to a paper published by elite researchers in artificial intelligence, HLMI (human level machine intelligence) has a 50 percent chance of occurring within 45 years and a 10 percent chance of occurring within 9 years. Some experts believe that AGI will be transformative and raise challenging questions regarding regulation. However, others believe that AI won't be taking over the world and that keeping research locked away would be a 'huge mistake'.
The Jim Stroud Show
The Perfect Side Hustle for Recruiters - Charm Schools: What else can an out of work recruiter do? I have an idea, kind of crazy, but not really. Recruiters should create charm schools and coach people on how to operate professionally in the workplace. Sound crazy? Its not and I have data to back me up. Tune in for a thought provoking show.
The Jim Stroud Podcast
Eliminating Bias From Interviews With Interviewless Hiring: Jim Stroud interviews Stephane Rivard, CEO of Hiring Branch.
No Robot Bosses: Jim Stroud discusses the No Robot Bosses Act making its way through Congress and what it may mean for small businesses in this episode.
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