The Changing Immigration Labor Landscape

By Dan Cadman on September 2, 2015

When provisions were added to the Immigration and Nationality Act in 1986 that forbid the hiring (or referring for a fee) of an alien unauthorized to work in the United States, people thought it would be a game-changer. The prohibitions were accompanied by civil fines and even criminal penalties for repeat offenders.

The "employer sanctions" laws, as they are usually described, also included prohibitions on "use of labor through contract", reflecting legislators' awareness that without them, employers would try to skirt the law forbidding hiring of illegal aliens by claiming they were contract employees, or by conveniently using subcontractors to do a lot of their dirty work — sometimes literally, as in the case of janitors, window washers, etc.

In the early years after passage, immigration enforcement officials such as myself were told to take a go-slow approach to give employers time to come into compliance with the new laws. Many warning notices were issued in lieu of fines; monetary penalties were frequently mitigated downward, often substantially; and almost no criminal prosecutions took place except in the most egregious instances, usually involving aggravating factors such as near-peonage workplace conditions.

Unfortunately, worksite enforcement never really shifted out of first gear; it spluttered along from one administration to the next, lacking enough resources to be truly effective, and often hampered by the political winds. But never, until the Obama administration, did any White House so effectively put the brakes on the half-hearted effort as to forbid enforcement agents from visiting worksites and arresting illegal aliens found on site; nor turn it into a paper exercise involving audits, which have devolved now into nonexistence. The consequence has been that any number of companies, large and small, have made the calculation that there's not much risk in hiring illegal aliens to displace lawful workers, and that the profit margins are well worth the risk.

Some, including mega-businesses, have made a practice of turning a blind eye while hiring subcontractors who use illegal labor. They work to distance themselves in order to evade the facial prohibitions against such a practice, although it is debatable, given the legal costs involved, whether they really came out ahead financially when the government did show enough resolve to take them to court.

Other businesses, including agricultural employers, have found workarounds to the conundrum of hiring or subcontracting illegal labor by means of existing programs for bringing in nonimmigrant workers to do the jobs, usually for less money than would be paid citizens or resident aliens. In some of these programs, the employers even gain tax breaks for this method of filling jobs. (See here and here.)

The programs seem to be sufficiently profitable for companies that, in the most egregious cases, corporations including Disney and Southern California Edison have fired American workers while making them train their foreign replacements in order to receive severance packages. One suspects that iconic American geniuses Thomas Edison and Walt Disney must have rolled over in their graves at this hijacking of their legacies in favor of corporate bottom lines.

In almost every instance involving the routine use of foreign labor to displace American workers, the employer's motive is the same: cheap, pliable labor. The general notion among employers has been that the aliens will work for less; they are unlikely to object to hazardous or unsanitary conditions or inordinately long hours because they are accustomed to such work circumstances at home; they are unlikely to pursue collective bargaining; and they don't always know when they are being cheated of overtime or denied prevailing wage rates.

The result has been a kind of devil's pact between greedy employers and advocacy groups to do whatever necessary to maintain the supply of alien workers regardless of status. But as with all such Faustian bargains, at some point the devil demands his due. Increasingly we are seeing evidence that advocacy groups have joined with labor unions and law firms to pin employers to the wall over any number of issues that employers thought they would never have to face with their "pliable" workforce.

The first signs of it go back a while, when a certain corporation owning vast numbers of big-box stores found itself on the back end of litigation initiated by workers of the subcontractor hired to clean those stores. Although the corporation ultimately prevailed, it was obliged to expend substantial amounts of time and money defending itself in litigation. The lesson seems to have taken, and the business appears to have weaned itself of the propensity toward unscrupulous subcontractors with shady hiring practices.

Many others are still learning their own hard lessons. Here are just a few examples gleaned from recently:

  • When the Department of Labor (DOL) issued regulations requiring employers to pay round-trip airfare for their H-2B nonimmigrant workers, and that they must receive wages equal to non-H-2B workers doing similar jobs, contesting employers were obliged to hire high-powered law firms to litigate the rules to the 11th Circuit Court of Appeals in order to have them enjoined.

  • The 9th Circuit Court of Appeals has weighed in to permit Mercer Canyons, Inc., a Washington agricultural employer, to contest the certification of a class of litigants against Mercer granted by a district court judge. The suit revolves around hourly pay and working conditions to be applied under the Agricultural Worker Protection Act. In its petition to the 9th Circuit, Mercer asserted that "The potential liability to the large class means that, if the litigation proceeds, Mercer will be under great pressure to settle, irrespective of the merits of plaintiffs' claims."

  • In early August a U.S. district court judge in Colorado approved a $305,000 settlement between a Mexican butcher/greengrocer and its workers, who accused the store of wage theft by underpaying wages and overtime. The suit was brought under the Fair Labor Standards Act. The executive director of the advocacy group that acted on behalf of the workers is quoted as saying "Wage theft is a rampant problem that disproportionately affects immigrant workers. ... Most workers, regardless of immigration status, are entitled to minimum wage and overtime."

  • A New Hampshire company, Kevin Corriveau Painting, Inc., and its chief officers are paying nearly half a million dollars in wages, damages, and civil penalties to DOL under a consent judgment for failing to pay appropriate wages and overtime, and coercing the employees with threats to report them to immigration officers if they objected.

Now we have word that the National Labor Relations Board is expanding the definition of "employer" to include major corporations, even when individuals are employees of a franchise operation. (See here and here). Think McDonald's, think Panera Bread, think any one of dozens of other such enterprises. The upshot of this will be to make those corporations responsible for the hiring and wage practices of the franchisees. It will also be easier for those employees to engage in very forceful collective bargaining. While the NLRB rule is "alien neutral", we should not doubt that there will be a powerful spillover effect on immigration employment practices as well. In fact, reading between the lines of the case that resulted in the NLRB decision, there is little doubt that it was generated as the result of a large corporation using a subcontractor with questionable employment practices.

Perhaps it's time for employers to realize that there is no such thing as cheap, pliable foreign workers in this shifting employment landscape, and to start doing the right thing by hiring and retaining lawful citizen and resident workers already in this country.