Shades of 1984 and McCarthyism!
This new rule is going further than simply holding employers responsible for ensuring that the workers they hire are all legal. That is as it should be. Everyone should take responsibility for their own actions and choices.
However, it includes a snitch-factor – encouraging employees to turn others in – anonymously.
Can you just see the level of abuse in this system?
What do employers need to know to comply?
1) They are not required to participate in the IMAGE program yet – though it is intended to become the standard in the near future.
2) They will have to take those Social Security no-match letters seriously. If the employees named in those letters cannot produce proof of their own Social Security status and legal right to work, the employer will be required to dismiss the worker.
3) The employer will face a variety of penalties, not specified, in any of the notices. But the examples show bank accounts
being confiscated and criminal prosecution being brought against the employers.
4) Naturally, if the employers knowingly hired illegals and didn’t collect or pay payroll taxes – there are IRS penalties and taxes that come into play, as well.
5) The companies will have to voluntarily open their books to Homeland Security – talk about chills! Who knows what
innocent, inadvertent thing they will find in the company’s books that has nothing to do with immigration issues. Since Homeland Security has complete autonomy, the implications
6) Good advice would be to keep payroll and casual worker
records separately from the rest of the company’s books.
That would include any hiring of consultants and freelancers.
7) IRS and the Social Security Administration also issue mismatch letters for taxpayer ID numbers of freelancers. While that was not specifically addressed in these documents,
except the inference to flow to these workers, as well. Until now, the only action a company had to take with these vendors was to withhold a substantial percentage of their compensation. Now, will they be required to dismiss those vendors?
8) Legal liability – as employees get fired, you can well expect lawsuits. Even if the employees end up losing, the attorneys
will win. And the courts will be further clogged.
9) A whole new set of staff will need to be hired by ICE to process all the communications generated by this correspondence. And you can see how backlogged they already are when it comes to getting passports issued. (They are so backlogged that the law requiring US citizens to show passports to travel to Canada and Mexico has been rescinded. US citizens can’t get passports in time to travel. ) Expect a lot of errors and delays and unfair
assessments to be issued and hasty actions taken. Kind of
like the IRS in before the Congressional Hearings in the 1980s.
10) Unexplained consequences – many of the jobs presently held by illegal aliens are jobs Americans don’t want to do – and certainly not for the pay those folks receive. So expect production declines in many manufacturing industries – forcing jobs to go offshore. Expect farm produce to sit in the fields, unharvested because there will not be enough workers. (Remember the debacle several years back when Immigration stepped up enforcement? Strawberries in Orange County, California sat in the fields. Americans tried doing the jobs and they were simply too hard – too much back-breaking labor, even for higher pay.)
Costs for produce will rise. We’ll have less of it. And more Americans will lose jobs, too, as companies move overseas to avoid the heavy regulations and scrutiny of their books.
Other than that, this will be a great law.
What do you think of this?
And how is this going to affect the way you run your business or work with your clients?
Or won’t it make any difference at all?
And how do you think this will impact the economy?
Ask TaxMama :: Where taxes are fun and answers are free
- US Immigration and Customs Enforcement :: Safe Harbor Procedures for Employers Who Receive a No-Match Letter
- US Immigration and Customs Enforcement :: Worksite Enforcement Cases and Examples
US Immigration and Customs Enforcement :: Worksite Enforcement Fact Sheet