Problems With Contractors Using Undocumented Labor
If you're a contractor who uses the illegal immigrants or
undocumented workers, you could easily find yourself dealing with more
problems than you ever believed you would have. I know plenty of
contractors who go down to their local donut shop to find someone who is
willing to work hard for very little money.
I've known contractors in the past who have used undocumented workers and kept them busy for years. I am assuming that these people got paid in cash and never paid any federal or state taxes. I'm not an economist, but I don't think that this is doing the United States much good.
It's not just the taxes, the biggest problem I have with undocumented workers, is that these contractors who are using them, can bid jobs cheaper than me. If they're not paying any payroll taxes or workers compensation insurance on their workers, they're saving quite a bit of money and can usually bid jobs much lower than legitimate contractors. I was paying over 51% for anyone who was getting paid less than $20 an hour at one time, for workers compensation insurance.
In other words, if I had a worker with a Social Security card and was paying him $20 an hour and he was working 40 hours each week, that's $800 a week. I would be paying an additional $400 in workers compensation insurance. In other words I have to pay $1200, were the contractor using undocumented workers would only be paying $800.
It's not just the workers compensation or payroll taxes either, what about jobsite injuries. Working in the construction business is dangerous and these workers get her all the time. If one of these undocumented workers got seriously injured, you could find yourself in the middle of a lawsuit and in big trouble with the government.
It never has been worth it to me, but obviously it is worth it to other contractors. It's usually only a matter of time, before either the contractor or the undocumented worker has a problem that's not going to be solved easily.