Illegal Employees

dhnyct · June 2001

I've been asked an outside question and need some input ASAP...

Employees of Company A are taken over by Company B. During the first pay period under Company B, it is discovered that a couple of illegals have been working for Company A. Illegals worked under Company B for several days before being discovered and released.

Question: Is Company B required to pay the hours worked before the release? If so, under what process?

CuriousG · June 2001

Employers are required by the FLSA to pay for all hours worked, regardless of the immigration status of the employee. The laws regarding "Wage and Hour" issues are fairly independent of immigration law.

This prevents and employer from hiring illegal workers, then refusing to pay them for time worked, because their immigratiion status does not allow them to work in the United States.

dhnyct · June 2001

[font size="1" color="#FF0000"]LAST EDITED ON 06-20-01 AT 12:34PM (CST)[/font][p]I understand the need for the regulations, but the problem of HOW still remains. If the payroll service will not accept them on payroll, should they be paid through accounts payable and then issue a 1099 at year end???

Thanks......

("Alert" selected in error...Sorry)

CuriousG · June 2001

This sounds like a case of the tail wagging the dog. If this is a third party payroll processing service, they should not care whether this is a "legal" employee or not. They are contracted to process your payroll, and the legality of an employee's work status is your problem.

I hope you are not turning your I-9 forms over to this outsider. You are legally responsible for maintaining these records, and being capable of producing them when the INS, or Department Of Labor audits you.

Is your problem that these "employees" do not have a Social Security Number? I could under stand your payroll contractor's reluctance in that case.

Down_the_Middle · June 2001

I concur with CuriousG. [I'm assuming there's no labor agreement and that the acquisition agreement was silent on that issue.] Seems to me the P/Roll service s/b processing whatever you submit for payment. In the absence of a practical explanation, I'd push the issue with them. If they are unable to comply (vs. unwilling), then I'd probably do the A/P thing and issue a 1099 at year-end. At least you'll have evidence that you made payment for hours worked. This is a grain of sand in the pile of HR stuff that we deal with, but making a good-faith-effort goes a long way.

Terry · June 2001

The only reason I could see the payroll company refusing to process is that they are actually a Professional Employer Organization (aka Employee Leasing) where they have liability in the workplace which would entitle them to copies of certain documentation such as the I-9 prior to running payroll.

CuriousG · June 2001

I agree that a PEO would have more say,in fact a true PEO would be the employer of record, and the proper entity to hold the I9.

Illegal Employees

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