The Impact of Employer Sanctions on Immigrants

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The Immigration 101 series is based on my course on immigration law at Hofstra Law School.

This is the third in a three-part series on Employer Sanctions, laws originally passed in 1986 to halt illegal immigration by going after the employers who hire the undocumented.

When Congress passed the original employer sanctions law back in 1986, it required that a study be done of the laws possible discriminatory impacts. Congress was correct in believing that employer sanctions would result in discrimination. Employer sanctions, while ostensibly aimed at the undocumented, has led to extensive discrimination in hiring against employment authorized Latinos, Asian Americans and others who appear to be foreign born.

In the most comprehensive study of the impact of employer sanctions, the non-partisan General Accounting Office (GAO) of Congress conducted a three year long examination of the impact of the law on discrimination. When the employer sanctions legislation was passed, Congress mandated that GAO determine whether widespread discrimination has resulted solely from the law. [GAO Report to Congress Immigration Reform and the Question of Discrimination March 1990 at page 37] The GAO employed six different methodologies to answer this question, including a national employer survey, a hiring audit, a survey of job applicants in five cities, and an analysis of complaints with the Office of Special Counsel of the Justice Department.

Based on employer survey, the GAO concluded that employer sanctions had resulted in a widespread pattern of discrimination. [Id.] According to the report, [t]his pattern existed across a variety of industries in all areas of the Nation and among employers of various sizes. [Id.] The GAO went on to say that the other three methodologies named above further supported our widespread pattern determination. [Id.]

The most damning evidence came from the employers themselves. Employers were asked in a national survey if they had begun any of a several illegal discriminatory practices subsequent to the passage of the employer sanctions law. The GAO survey of a random sample of [American] employers show that an estimated 891,000 employers (19 percent) of the 4.6 million in the population surveyed reported beginning discriminatory practices because of the law. [Id. at page 38] These illegal practices included hiring only persons born in the United States (14.7%), not hiring persons who appeared to be foreign born or who had accents (6.6%), not hiring those with Puerto Rican Birth certificates (1.8%) or refusing to accept some valid work authorization documents issued by the INS while accepting others (13.0%). [Id. At pages 38, 39, and 120] Since these survey relied on employers to self-report discrimination, the actual level of discrimination may have been higher. [Id at page 129]

These discriminatory practices were not restricted to any one area of the country, but were particularly serious in areas of the U.S. with high concentrations of immigrants. In New York City, for example, 21% of employers began discriminatory practices after the passage of the employer sanctions law. [Id.]

The GAO also conducted a hiring audit in which pairs of testers (one Hispanic and one a non-Hispanic White) who were closely matched on those characteristics that might affect the hiring decision, applied for the same entry level jobs. The audit observed the hiring practices of 360 employers. [Id. At page 46] According to the GAO the hiring audit results show a high level of national origin discrimination. The hiring audit showed that the Hispanic testers were three times as likely to encounter unfavorable treatment when applying for jobs as were closely matched Anglos. [Id at page 47] Although the discrimination encountered during the hiring audit might not entirely be due to the employer sanctions provision, the GAO concluded that employer sanctions had exacerbated an already serious problem of national origin discrimination. [Id. At page 49]

The GAO found that employers, fearing penalties for violating the employer sanctions law, had adopted discriminatory practices due, in part, to a lack of understanding of the law itself, and difficulty in navigating the complex documentation allowing for unlawful employment. [Id. At page 60] Rather than risk penalties, employers decided to play it safe and not hire persons who appeared to be foreigners. Playing it safe led to massive illegal discrimination.

A 1989 report from the New York City Human Rights Commission based on a hiring audit backed up the conclusions reached by GAO when it found that the employer sanctions provision had resulted in widespread discrimination against those perceived to be immigrants in New York City. [Tarnishing the Golden Door The City of New York Commission on Human Rights, August 1989]

The impact on the undocumented has been even more dramatic, although it has been different from the effects Sanction’s authors had intended.

Employer Sanctions were supposed to hurt the undocumented by denying them jobs, thereby driving them back home. But because of the weak enforcement discussed in Part 1, and the evasive strategies devised by employers discussed in Part 2, the jobs have not disappeared. In fact, by all measures, there are as many as three times as many undocumented aliens working in the U.S. today as there were in 1986. What has changed are the conditions the undocumented labor under.

Before Employer Sanctions, undocumented immigrants were treated more or less like any other employee by bosses. They could be paid by check and taxes could be withheld. If they were mistreated by their bosses, they could go to the Labor Department and file a complaint. Many joined unions, since they were not excluded from union shops. All this changed when sanctions came in.

Now many “good” employers, not wanting to run afoul of the law, laid off the undocumented. This left the less scrupulous to employ the undocumented, along with a new class of straw men working as “paper employers”. These straws would hire the undocumented being laid off by mainstream bosses, and contract their work back to the original employer. This insulated the big employer from legal liability, but it also meant that part of the wages formerly paid to the undocumented worker were now raked off by the contractor.

The undocumented immigrants’ problems were compounded because enforcement of Employer Sanctions was partially vested in the Department of Labor itself. So, overnight, the Labor Department went from being an ally against exploitation to being an agent of deportation. As one might expect, complaints about employer maltreatment coming from undocumented immigrants dropped.

So the ultimate effect of Employer Sanctions was not to halt illegal immigration or to punish offending employers. The effect was to depress wages for the undocumented enough to distress them without actually driving them home, to cut them off from Labor Department protection, to push them out of unions, and to make them a class of workers subject to hyperexploitation. In other words, Employer Sanctions made the undocumented the perfect class of workers for unscrupulous employers, and gave those employers a competitive advantage over employers who followed the laws.

Read other parts of this series:

Immigration 101 is a comprehensive series on American immigration law for the layperson. This series tracks my course on immigration law at Hofstra Law School and answers many of your questions about immigration policy.

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Patrick Young blogs daily for Long Island Wins. He is Director of Legal Services at CARECEN and Special Professor of Immigration Law at Hofstra University. Pat is also a student of immigration history and the author of The Immigrants' Civil War.

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