Employers have long assumed that use of independent subcontractors would shield them from charges of employment of illegal immigrants, and took few, if any, steps to ensure subcontractor compliance with immigration laws. An important settlement reached with Wal-Mart Stores has recently destroyed this myth.
The $11 million settlement followed a long-standing investigation, several raids, and the arrest of 350 suspected illegal aliens working as janitors in Wal-Mart stores. Wal-Mart pled ignorance to the illegal hiring practices of the 12 companies that had hired, managed and subcontracted the janitors to Wal-Mart. However, U.S. Immigration and Customs Enforcement rejected the defense indicating that Wal-Mart could not pass on corporate responsibility and it intends to use this settlement as a precedent in prosecuting employers for contractor violations of immigration laws.
Employers using independent contractors must now be more careful to scrutinize their own hiring practices and those of their subcontractors. Although employers are not required to verify employment authorization of their contractor’s employees, they may want to address such issues in agreements with independent contractors. Employers should also take this opportunity to review their internal hiring practices, company policies and procedures, and management training in areas of compliance and verification. Immigration authorities have clearly sent the message that turning a blind eye will not protect an employer from prosecution.