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What Immigration Reform Means for Employers

Published on 8/13/2014 12:00:00 AM
immigration reform

While the passage and scope of a comprehensive immigration reform bill remains to be seen, the president continues to push for sweeping, but practical, changes. Mirroring this sentiment, Secretary of Homeland Security Jeh Johnson met with a group of key immigration stakeholders in April 2014 to discuss the leading immigration issues – and how the Department of Homeland Security (DHS) can better administer and enforce immigration laws.

The topic of immigration reform is far-reaching, involving everything from citizenship procedures to deportation policies. In fact, much of the debate centers on the particulars of providing citizenship for the 10 million undocumented individuals in the United States.

But what does immigration reform mean for employers? What are the proposed changes that would impact the workplace? As a business owner, these are the areas you should be tuning into as immigration reform gains momentum:

More H-1B visas for foreign workers

Both the Senate and the House recognize the importance of foreign work visas based on employer need, rather than a restrictive lottery system. Currently, the U.S. Citizenship and Immigration Services (USCIS) accepts a limited number of applications for H-1B visas each year – capped at 65,000 for workers with bachelor’s degrees and 20,000 for those with master’s degrees or higher. After this number is reached, the USCIS uses a computer-generated process to randomly select the appropriate number of petitions. The problem, though, is that the demand for H-1B visas frequently exceeds supply. And without these temporary visas, U.S. employers cannot hire foreign workers in specialty high-tech, medical and managerial positions, such as scientists, engineers and computer programmers.

If the bill approved by the Senate in June 2013 is finalized, the number of visas for bachelor-level foreign workers could go as high as 110,000 – with room to grow to 180,000 in the coming years.

Of course, the proposal has met resistance. Certain labor groups are concerned that more foreign-worker visas would take jobs away from Americans and drive down wages. To address the issue, the Senate has proposed a limit to the number of foreign workers each individual firm could hire – as well as requiring firms applying for high-skill foreign visas to first post job openings online in the U.S. and to pay higher wages to H-1B workers.

Mandatory use of E-Verify to verify employment eligibility

Employers are responsible under the Immigration Reform and Control Act (IRCA) to verify that all new employees are eligible to work in the U.S. Many rely on the 2-page Form I-9 to meet the federal requirements. A large group of lawmakers, however, would like to shift this task from a paper-based system to an electronic one, mandating that employers use E-Verify – an online system that compares information from the Form I-9 to data from government records. Today, less than 1 percent of U.S. employers are enrolled in E-Verify.

Advocates are quick to point out the risk of errors and even fraud with a paper-based system, stating that it’s “unacceptable” that so many employees have their work eligibility verified through an outdated and unreliable process.

For small businesses that are uneasy about the increased responsibility when hiring, the bill addresses the matter. Mandatory use of E-Verify would become effective at a later date for firms with fewer than 500 employees, giving them up to four year to use E-Verify.

Crack down on employers using undocumented workers

New regulations could cast a harsh light on employers who exploit undocumented workers. Although it’s a flagrant violation of tax and immigration law to hire workers “under the table,” it still exists. One of the proposals in the bill would allow undocumented immigrants to apply for Registered Provisional Immigrant (RPI) status and work authorization if they’ve been in the U.S. since December 31, 2011, and if they pass various criteria regarding criminal activity, payment of taxes and background checks.

As part of the process in paying back taxes, undocumented workers would need to tell immigration officials and the IRS the employers they’ve worked for. In turn, businesses that hire undocumented workers and ignore minimum wage and other labor requirements could be identified.

Once revealed, the employer could face a host of fines and penalties for knowingly hiring, recruiting, referring or continuing to employ an unauthorized immigrant. Worst yet, failure to pay payroll taxes is tax evasion and a convictable felony. The obvious lessons here are to never hire undocumented workers, regardless of the latest enforcement initiatives, and always follow the proper employment eligibility verification procedures.

Jaime Lizotte
Presented by: Jaime Lizotte,
HR Solutions Manager
Hiring, recordkeeping, time and attendance tracking, employee discipline, filing 1099 and W2s ... all of these tasks create overhead expenses and detract from revenue-generating activities.