Are You at Risk? Legal Obligations for Employers of Undocumented Workers

Hiring employees is an important part of running a business. However, if you hire undocumented workers, you must understand the legal risks. The U.S. government has strict laws about employing people who do not have the right work authorization. If you are an employer, knowing these rules is important to protect yourself, your business, and your workers.

Who Is Considered an Undocumented Worker?

An undocumented worker is an individual who does not have legal authorization to work in the United States. This may include:

• People who entered the country without a visa or work permit.
• Individuals who overstayed their visas and lost legal status.
• Workers using false or stolen identification documents to gain employment.

Even if a worker has a Social Security number or other documents, an employer must verify that these documents are legitimate before hiring them.

Legal Obligations for Employers of Undocumented Workers

Employers must follow strict immigration laws to ensure they only hire workers with legal authorization. Failing to comply can lead to fines, business closures, and even criminal charges. Here are the key legal responsibilities every employer should know:

1. Verify Work Authorization (Form I-9)

Every employer must verify the work eligibility of all new hires by completing Form I-9, a federal employment verification form. This process involves having the employee provide documentation proving both their identity and authorization to work in the U.S. Acceptable documents include a U.S. passport, a permanent resident card (Green Card), or an employment authorization document (EAD). Employers must examine these documents to ensure they are valid and unexpired.

The I-9 form must be completed within three business days of the employee’s start date. Employers are required to retain these forms for a minimum of three years after hiring or one year after the employee leaves, whichever is longer. Failing to complete or properly maintain I-9 records can lead to significant fines, even if no undocumented workers are employed.

2. Avoid Discrimination in Hiring

While verifying work authorization is mandatory, employers must be careful not to discriminate against employees based on nationality, race, or immigration status. Federal law prohibits employers from requiring specific documents beyond what is necessary for Form I-9 verification. All employees must be treated equally in the hiring process, and employers cannot reject a candidate solely because they appear to be foreign-born or have a non-U.S. accent.

3. Check Documents for Obvious Fraud

Employers should inspect work authorization documents for clear signs of forgery, such as incorrect information or missing security features. However, they are not expected to be document experts—if the papers appear genuine, they can accept them in good faith.

4. Follow Texas-Specific Laws on E-Verify

While Texas does not mandate the use of E-Verify for private businesses, certain government contractors and state agencies are required to use the system. E-Verify is an online federal program that cross-checks an employee’s eligibility against government databases.

Even though E-Verify is not mandatory for all businesses in Texas, employers in high-risk industries—such as construction, hospitality, and agriculture—may consider using the system to reduce liability. Texas also has laws against “knowingly” hiring unauthorized workers, meaning that if an employer intentionally disregards immigration laws or turns a blind eye to an employee’s undocumented status, they could face severe consequences, including business license suspension and criminal prosecution.

5. Be Prepared for Government Audits

Federal agencies such as U.S. Immigration and Customs Enforcement (ICE) and the Department of Labor conduct regular audits and investigations to ensure employer compliance with immigration laws. If an employer receives a Notice of Inspection, they must provide their Form I-9 records for review. Employers should be proactive by conducting internal audits, keeping well-organized records, and consulting an immigration attorney if they receive an audit notice.

Following these steps allows employers of undocumented workers to protect their business and stay compliant with federal and Texas laws. If you need help understanding employment verification, consult an immigration attorney to avoid costly mistakes.

What If an Employee Provides False Documents?

In some cases, an undocumented worker may present fake Social Security numbers or identification to secure employment. As an employer, it is your responsibility to carefully verify documents while avoiding discrimination. Here’s how to handle this situation properly:

• Review all documents carefully – Check that identification and work authorization documents appear genuine and match the employee’s information. However, do not assume fraud based on appearance, accent, or nationality.
• Reject clearly fraudulent documents – If a document is obviously fake or invalid (e.g., incorrect details, missing security features), request valid, government-approved identification.
• Maintain hiring records – Keep copies of all Form I-9s and hiring documents. Proper record-keeping helps protect your business in case of an audit or legal inquiry.
• Report identity fraud when necessary – If you confirm that an employee has used stolen or fraudulent information, you may need to notify the Social Security Administration (SSA) or other authorities. However, this must be done carefully to avoid legal complications.

To protect yourself, always follow proper hiring procedures and consult an immigration attorney if you suspect document fraud in your workplace.

How Employers Can Protect Their Business

To reduce the risk of hiring undocumented workers and avoid penalties, follow these best practices:

• Establish a Clear Hiring Policy – Develop and enforce a structured hiring process that includes thorough employment verification and compliance checks.
• Train HR and Management Staff – Ensure all hiring personnel understand employment eligibility requirements and are trained to properly verify work authorization.
• Utilize E-Verify When Applicable – If required in your state or industry, E-Verify can provide an added layer of security by confirming an employee’s work eligibility through government databases.
• Conduct Regular Internal Audits – Reviewing I-9 forms and employment records periodically can help identify and correct compliance issues before they become legal problems.
• Consult an Immigration Attorney – Staying informed about changing immigration and employment laws is critical. An attorney can provide guidance on best practices and ensure your business remains compliant.

Work with our Immigration Law Firm in Houston

Navigating immigration laws as an employer can be complex, but you don’t have to do it alone. Davis & Associates specializes in employment immigration law and can help you ensure compliance with hiring regulations, Form I-9 requirements, and workplace audits. Whether you need guidance on verifying employee work authorization or protecting your business from potential penalties, our experienced attorneys are here to assist.

Contact Davis & Associates today to safeguard your business and stay compliant with immigration laws.