How Restaurants Hire Undocumented Workers

Photo: Shutterstock; Photo illustration: Esra Erol

Fact: The food industry hinges on the work of thousands of undocumented immigrants. But hiring an undocumented worker seems tricky at best, if not incredibly risky. So how and why do restaurateurs do it, and at such a high volume? We spoke to lawyers, restaurant owners, and policy makers to find out.

Why is hiring undocumented workers so common in the restaurant industry?

According to a 2008 Pew report, undocumented workers make up at least 10 percent of the hospitality industry and 13 percent of the agriculture industry (though these are estimates and are likely underrepresented — as Eater reported last year, over 20 percent of all cooks could be undocumented). Just one day without immigrants cost the restaurant industry a huge hit to its profits, and some experts predict that without undocumented labor, the price of food will increase up to six percent... or worse, that there won’t be enough food for us all to eat due to labor shortages.

“Immigrants feed this country,” says Noelle Lindsay Stewart, a former D.C. line cook and the communications manager for Define American, a media company focused on immigrant rights and identity. “They cultivate our produce; they cook our food. The food industry wouldn’t be possible in the way it is without them.”

As long as the Trump administration continues to push stricter immigration policies, the food world is going to feel the squeeze. However, it’s unlikely farms or restaurants will change their hiring practices, because most don’t have a choice to begin with. Restaurants have some of the highest turnover rates of any industry (71.2 percent in 2015, compared with 45.9 percent for private-sector employees). Couple that with tight profit margins and fast-paced, physically demanding work, and it’s easy to see why restaurant owners will hire people in a pinch, regardless of immigration status.

“Hospitality jobs are hard jobs to fill, because these positions aren’t wanted by most Americans,” a U.S. immigration lawyer who represents several major resorts and hospitality companies told Eater. He wished to remain anonymous due to the delicate nature of the subject and to protect his clients. “As an employee, you’re better off working at a McDonald’s drive-thru than doing a dishwasher job. So the default for managers is to look for literally anyone to fill those spots.”

While major hotel chains and restaurant groups can rely on recruiters to staff their restaurants and bars with documented workers, smaller businesses don’t have the financial wiggle-room to outsource their hiring or to ensure their staff have proper documentation. “The costs are prohibitive to new restaurateurs,” he added. “Standalone restaurants don’t have access to those resources, and they cost way more than running the risk of fines.”

How does the hiring process actually work?

The process is simple, and if you’ve worked anywhere in the United States you’ve probably gone through a version of it: once hired, restaurant employees fill out I-9s (the basic form that confirms a worker is eligible for employment) and a W-4 (for tax withholding). They also submit documentation, including a Social Security Number (SSN) and ID.

This is where things get a little fuzzy, and where most restaurateurs simply decide to turn a blind eye and say that whatever the employee has given them is good enough. Though I-9 falsification is a criminal offense both for the employer and the employee, employers who do get caught are held to a reasonableness standard in court — which means that as long as the name on the paperwork matches the name the employee gave them, and their photo ID looks like it could be them, they don’t tend to, or need to, ask questions.

“A lot of people will just take the documents even though they’re clearly not accurate; they just don’t do due diligence,” our immigration lawyer source told Eater. “An employer doesn’t need to falsify if an employee gives them valid-seeming papers.” Though there have been cases of employers falsifying documents on employees’ behalves, those are few and far between.

However, employers aren’t able to completely plead the Fifth: most modern payroll systems offer an optional service that will issue an alert if you enter an SSN that doesn’t line up with a name; they also alert employers if the SSN entered was never actually issued.

ADP, which is one of the largest human resource data managers and payroll companies in the world, says they don’t have access to SSNs, they do suggest that employers verify names and SNNs in order to make sure their employees’ paperwork is accurate. However, the company told Eater that this is an optional service for their clients, not a built-in feature of their system, and that they have it in place to connect their clients directly with Social Security Administration data. Other payroll companies, such as SurePayroll, are even more hands-off. “We validate the format of the social security number, so it’s not possible to leave a digit out, but we leave the verification of the information up to the employers,” says Sarah Skerik, the VP of marketing at SurePayroll.

Even employers who do opt in to verification tools in their payroll systems are under no legal obligation to pay attention to them. “You can choose to ignore [those alerts] or not. It doesn’t stop you from issuing that person a check,” says Christophe Hille, a senior restaurant consultant for Karen Karp & Partners and a former restaurant owner. “I’m sure many employers see that message in a system and ignore it. Because those employees tend to come and go fairly quickly, the problems solve themselves. There’s no HR person to say ‘no, we can’t hire you’ at most restaurants.”

However, U.S. Customs and Immigration Services has another way employers can check their employees’ eligibility: E-Verify, an online database that allows businesses to check the status of their hires. Some states, like Arizona, have made it mandatory for all employers to use the service, and last week Republican Iowa Senator Charles Grassley reintroduced a bill to make E-Verify mandatory nationwide. However, as Eater reports, there’s no proof that forcing employers to use E-Verify lowers the rate of undocumented employment—it just forces people to take things off the books, which employers do their best to avoid.

What about payment? Is it all done in cash?

While some restaurateurs work completely under-the-table, i.e. without filing any paperwork and paying employees only in cash, many do want to stay above-board, both for their own accounting purposes and to comply with state and federal regulations. In terms of the Labor Department, be it state or federal, their interest is in protecting workers; they seldom dig into immigration status. “They’re going to look at your payroll and look at what you logged and make sure those match,” says Hille, which is part of the reason restaurateurs keep all their employees on the books.

Some employers will sign checks without withholding taxes, but many undocumented workers that don’t have the right to work still file. “I’ve had countless discussions with potential clients who say ‘I’m illegal, but I’ve always paid my taxes,’” says our immigration lawyer source. “IRS isn’t enforcement, so they just want their money. They don’t care who it’s coming from.”

Hille had a similar experience in his 20 years in the restaurant industry. “When politicians say things like ‘immigrants don’t pay taxes, they’re a burden on the system,’ it’s just not the reality. Undocumented people are usually having taxes withheld. They’re paying into a system that doesn’t ever pay them back.”

According to The Institute on Taxation and Economic Policy (ITEP), undocumented Americans pay $11.64 billion annually in state and local taxes. “Allowing them to work legally would increase these state and local tax contributions by an estimated $2.1 billion a year,” says Rev. Ryan Eller, the executive director of Define American.

Though Immigration and Customs Enforcement (ICE) agents could technically use that IRS data to track down undocumented workers if they wanted to, the agencies tend not to communicate, said Eater’s source. Plus, nothing on current tax forms speaks to the immigration status of a given tax filer. Long story short: as long as you have an SSN and a bank account, you can legally get paid.

How often do people get caught?

Even though you may have heard of mayors of sanctuary cities and even owners of sanctuary restaurants promise to keep undocumented workers safe from deportation, immigration (specifically, I-9 regulations) is under federal jurisdiction, which means states have very little control over matters of undocumented labor violations. Legal sources told Eater that proving undocumented workers have rights to employment is virtually impossible under the current laws. “Whether or not ICE chooses to deport someone or not, it’s still a very hard argument to make in court to say [illegal immigrants] have a right to work,” he says.

Immigration raids are in full swing under the Trump administration, with at least 670 people rounded up across the United States in the second week of February alone. There are several reasons why these raids happen.

According to Randy Capps, Director of Research of U.S. Programs at the Migration Policy Institute, raids happening now that are tied to crimes are a result of the Obama Administration’s (now defunct) Priority Enforcement Program (PEP), and before that the Secure Communities Program. “Under Secure Communities, if an undocumented immigrant was arrested and booked in a local jail, police officers were encouraged to notify ICE,” Capps explains. “Local precincts may not have had the space to detain individuals until ICE officers arrived, but ICE would still receive the data on the individual and their crime and could then follow up at the person’s home or place of employment, perhaps a restaurant.”

Other sources suggest agents are following an anonymous tip they believe is credible. It’s important for restaurant owners to remember that they do not need to let ICE agents into their business unless the agents have a warrant; if they verbally grant access, ICE has every right to question employees. Another possibility is if agents decide to systemically audit industries or businesses known to employ high levels of undocumented workers. “Ten years ago, it was bars, then they moved over to construction,” our legal source tells us. “Any industry that had a high turnover, you know they’ll be looking at I-9s at some point.”

Regardless, the agency will issue a subpoena and a notice of inspection. In the case of the restaurant industry, they’ll request all employment paperwork; employers then have 72 hours to produce that documentation for agents. If any of the I-9s seem iffy, they’ll request new documents that show a worker’s continuing employment eligibility. “They’ll usually target six to seven restaurants at a time, which will panic the rest of the restaurants in town. 90 percent of employees just don’t show up when those raids start happening,” our lawyer sources said.

Generally, ICE is looking to hold employers, not employees, accountable. The punishment for hiring undocumented workers are fines of $2,156 per worker. However, those numbers are flexible — ICE audits sometimes result in fines as large as $200,000, which would easily put even large restaurant groups out of business. For that reason, our sources say agents are often open to negotiation; they’ve seen restaurateurs get their six-figure fines down to as low as $12,000. However, that doesn’t prevent future raids. “They [ICE] almost always negotiate; it defeats their purpose to put you out of business,” says our immigration lawyer source. “But they’ll take your $12,000 and come back in six to eight months.”

While restaurants can usually bounce back, if their employees get caught in a raid they may not be so lucky. “Restaurateurs are able to survive the slaps on a wrist; when you deport people, you break up a family,” says Stewart. “You put kids into foster care, you deprive families of a key member and of an income. One punishment is far more severe than the other.”

Is there anything employers can do to hire above-board?

Unless individuals are maintaining lawful status, an employer can’t do much to help. Even if a worker qualifies for a green card, if they’re not maintaining a legal immigration status, they can’t go through the final step of the green card process in the U.S. without physically leaving the country — and if they accrue any unlawful presence in the United States, they’re barred for three years. If they overstay a legal visa for one year, they’re barred for 10 years, which explains why people tend to stay put unless they seriously fear deportation.

“We get a lot of calls from employers saying, ‘we love this guy, he’s incredible, we’ll do whatever it takes to keep him here,’” says the lawyer. “But for individuals who have gone undocumented, they can only get approved if they go to the U.S. embassy in their home country — and leaving the U.S. is what triggers those bans.”

It’s a true catch-22; while employers want to do things legally, they don’t have the means (or the workforce) to do it. For many, the only long-term solution would be comprehensive immigration reform that includes amnesty provisions for workers who are already in the United States. “When politicians talk about people coming in through the front door, it’s always the questions of ‘what front door are you talking about?’” says Stewart. “The bureaucracy makes it so difficult to immigrate in the right way.”

by Talia Ralph