Stalled Immigration Reform Leaves Workers and the Companies that Employ Them in Limbo

By Kristin Casler, featuring Amy Peck of Jackson Lewis

When the U.S. Supreme Court issued a 4 - 4 decision in United States v. Texas in June, it dashed not only the hopes of millions undocumented immigrants seeking legal status but those of businesses that seek to hire legal workers or reclassify those they already have.

Plaintiffs in Texas challenged an Executive Order expanding the Deferred Action for Childhood Arrivals (DACA) program and establishment of the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program as an overstepping of President Barack Obama’s authority. The Supreme Court’s tied decision left standing a preliminary injunction halting implementation of Executive Order.

The benefits to employers

President Obama’s order would have provided an initial three-year reprieve to approximately five million immigrants in the United States unlawfully. It also would have granted them work permits and the ability to obtain a driver’s license and a restricted social security number, said Amy Peck, an employment attorney at Jackson Lewis.

“The process of obtaining a work permit—getting fingerprints and providing real biographical information—would bring an entire class of workers out of the shadows,” Peck said.

Many undocumented immigrants are working anyway, and many are underemployed, she said. They are qualified for better jobs but are underemployed because they don’t want to rock the boat. Some perform day labor and work in undesirable or even downright unsafe situations.

Should those workers become fully employed, employers would have access to a larger pool of workers who are legitimately registered for purposes of payroll, taxes, safety and background checks. “They know exactly who is working for them,” Peck said.

The underground economy

Instead, a tremendous underground economy exists in which workers buy fake identifications or borrow legitimate Social Security numbers and identifications of relatives or others who look like them, Peck said. These falsified or borrowed IDs get the workers in the door for purposes of Form I9, the required identity verification for employment. The earnings collected are attributed to the true owner of the ID, if any, boosting their income on paper. In many cases, the true owners of the IDs charge the borrower a percentage of that income.

Immigration reform would shake up this underground economy and bring workers out in the open, Peck said. Workers could come forward to their employer and provide a legitimate Social Security number and work permit. The employer would update the worker’s information, correct the payroll and Social Security earnings going back two years, and the employee could go on working. Peck said an employer could choose to terminate an employee, but most simply want the correct information and to know who is working for them.

“There are billions sitting in Social Security or being spent that aren’t legitimately assigned to a real individual or are being inappropriately attributed to an incorrect individual,” Peck said. “There are just enormous benefits to that legitimatization process for the workers and their employers.”

Of course, individuals who are not working would be able to obtain permits that would allow them to join the workforce.

“I have yet to encounter an employer who wouldn’t love to know exactly who is working for them and who would appreciate a larger workforce,” Peck said. “Find me one and I’ll show you a unicorn.”

What can organizations do?

“Whatever happens, there still is much more work to be done. Although expanded DACA and DAPA are important steps toward meaningful reform, they are only temporary measures at best,” the American Immigration Council said in response to the Texas decision. “The only way to ensure lasting improvements is for Congress to pass long-overdue immigration reform legislation.”

To that end, Peck urged organizations that are in favor of large-scale immigration reform to lobby their representatives to pass legislation that would legitimize workers who are currently working without proper permits.

“There’s only so long we can be denied,” she said. “I’ve said that for 15 years, but at some point, we’ll get reasonable people who will see that our current system isn’t working and the economic benefit of incentivizing innovation and creating and legitimizing a pool of hard workers is a good idea.”

Pros and Cons of Legalization

Of course, not everyone is for immigration or legitimizing illegal immigrants already here. The debate is what makes the issue so complex and thorny.

The American Immigration Council believes an expanded DAPA and DACA would keep families united, increase U.S. gross domestic product, increase tax revenue, raise wages and give workers more spending power, positively contributing to the overall economy.

“More importantly,” Peck said, “it’s not 1+1=2, it’s 1+1=3. Statistically, our hardest workers are immigrants.”

According to the Kauffman Foundation, immigrants are almost twice as likely to start businesses in the United States as native-born Americans. In 2012, immigrant founders of engineering and technology firms employed approximately 560,000 workers and generated $63 billion in sales.

Immigrants working in labor-intensive industries are critical to the U.S. economy, according to the New American Economy. They fill an important void. Only 7.4% of Americans now lack a high school diploma—compared to over 50% in the 1960s. Immigrants specializing in labor-intensive industries such as manufacturing, agriculture, and construction complement the American workforce, create new opportunities for domestic-born workers, and are desperately needed by businesses, the New American Economy argues.

On the other side of the argument are supporters of a closed or more restrictive border who list, among many other arguments, that the massive influx of immigrants takes jobs from legal workers and pose economic and security threats. Many organizations seek deportation of the estimated 12 million to 15 million immigrants who are in the United States without proper documentation.

Immigration Reform Law Institute, for example, states:

“One of the reasons Congress set limits on the number of immigrants we admit to this country is to protect job opportunities and prevent the erosion of wages for American workers. Virtually every nation on earth limits immigration for this reason. While it may be in the short-term interest of some businesses to flood the labor market with foreign workers—many of whom are prepared to accept poorer wages and working conditions— doing so undermines national core interests.

“Immigration has been outpacing job growth in the U.S. for decades and is a contributing factor to unemployment, wage erosion, and declining labor force participation. Lower-skilled American workers have seen the sharpest declines in income while higher skilled workers are increasingly undermined by mass immigration and guest worker programs.”

No matter where you stand, immigration reform is a complex issue that impacts many millions of people—immigrants and legal residents alike.