Undocumented, non I-9 verified employees

searcher profile

August 28, 2024

by a searcher from Charles Sturt University in New Jersey, USA

Hello searchers,

I am looking at a target that has some undocumented workers. I understand that they are all in the process of legalizing their status but they are not there yet. It is difficult to hire the skill set and typically these workers are your best bet, hence the owner has done so and that has been the case for past 30 years. What risks do you think it poses from an employer standpoint and are there any ways to mitigate them?

Thanks!

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Reply by a searcher
from Harvard University in Charlottesville, VA, USA
My personal opinion is that it is a big risk and it is a serious violation if knowingly hiring workers who do not have an employment authorization (although I'm sure the consquences and enforcement vary significantly between localities). While it is true that many sectors (hospitality, construction, restaurants etc.) rely heavily on these types of workers, utilizing a search fund to acquire a company with such practices is not a good idea.

The idea that the existing workers are somehow legalizing their status sounds suspicious. Moreover, what happens to the liability and legal issues that might arise if one of these workers or the government brought up a suit against the company post-acquisition (even if it was an asset purchase)? Another issue to consider is what happens to the cost and operational stability of the business if all these workers left and you replaced them with legal ones.

As others have mentioned, talking to a professional such as a labor attorney is probably a must. Good luck!
commentor profile
Reply by a searcher
from University of Connecticut in Connecticut, USA
You should certainly talk to your attorney and do some more research on this. Key thing to keep in mind: just because the previous owner has done something for “30 years” and hasn’t faced any repercussions, it doesn’t mean you’ll be able to continue doing the same with the same luck. Such red flags should be noted and their true impact should be analyzed as well. If findings come to show that you can’t continue this practice then: 1. Are you able to find new documented employees to fill these roles? 2. Will these new employees need to be payed higher “market rates” than existing “undocumented” employees. 3. What’s the overall financial and resourcing impact that you may face from trying to manage this issue and how long may this take. 4. Will you be losing work contracts due to not being able to find replacement talent in time to meet project demand?

Not a direct answer to your question, but hope the extra considerations help!
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