Recent federal enforcement actions by the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) have sent a strong reminder to U.S. employers: immigration compliance responsibilities extend well beyond direct hires. Raids at factories, farms, and construction sites in recent months have uncovered widespread unauthorized employment — much of it tied to subcontractor labor rather than direct employees .
Subcontractor Labor and “End-User” Liability
Many companies rely on subcontractors or staffing firms to supply workers for specialized projects, seasonal needs, or IT services. While this practice is common, it can expose businesses to unexpected liability.
Even if a company is not the direct employer of foreign workers, government investigators often view the business as the “end user” of that labor. When subcontractors fail to follow I-9 rules or knowingly employ individuals without authorization, the client company can still come under investigation. In some cases, site visits, document requests, and interviews may follow — disrupting operations and putting the company under a compliance spotlight .
Potential Penalties
The risks are not limited to workers. Employers themselves can face:
- Civil penalties – including fines, debarment from federal contracts, and mandatory compliance audits.
- Criminal exposure – such as charges of visa fraud, false statements, conspiracy, or wire fraud. These carry severe consequences, including possible imprisonment and forfeiture of assets.
- Reputational harm – news of an immigration raid can damage client trust, investor confidence, and community standing.
Strengthening Contracts with Subcontractors
Employers can reduce risk by ensuring subcontractor agreements include:
- Written confirmation of immigration law compliance.
- Immediate notification of visa changes or government inquiries.
- Audit rights to review I-9 records and hiring practices.
- Indemnification clauses holding subcontractors responsible for violations.
- Clear termination rights for non-compliance.
Internal Compliance Controls
Strong internal processes are just as important as contracts. Best practices include:
- Maintaining a registry of subcontractors and foreign national staff assigned to worksites.
- Training managers on proper procedures for issuing verification letters.
- Conducting periodic audits of subcontractor records and immigration documentation.
- Establishing clear protocols for responding to ICE or DHS site visits.
NPZ Guidance
The lesson from recent enforcement actions is clear: companies cannot assume subcontractor relationships shield them from liability. Immigration compliance must be a shared responsibility, and proactive steps now can help avoid costly investigations later.
At NPZ Law Group, we help employers strengthen compliance programs, review subcontractor agreements, and prepare response strategies for government audits and site visits. Contact us to discuss how we can protect your business.
Frequently Asked Questions (FAQ)
1. Can my company be held liable if unauthorized workers are employed by a subcontractor?
Yes. Even if you are not the direct employer, you may be treated as the “end user” of that labor and become subject to investigation.
2. What are the possible penalties for non-compliance?
Companies may face fines, loss of federal contracts, criminal charges, and reputational damage.
3. How can subcontractor contracts reduce risk?
Contracts should include compliance certifications, notification requirements, audit rights, and indemnification clauses.
4. Should we issue verification letters for subcontracted workers?
Exercise caution. Such letters can link your company directly to the worker in government records, making you a potential target for investigations.
5. What steps can employers take right now?
Review subcontractor agreements, train staff on immigration compliance, and consult legal counsel before responding to ICE or DHS inquiries.
Contact Information
If you or your family members have any questions about how immigration and nationality laws in the United States may affect you, or if you want to access additional information about immigration and nationality laws in the United States or Canada, please do not hesitate to contact the immigration and nationality lawyers at NPZ Law Group. You can reach us by emailing info@visaserve.com or by calling us at 201-670-0006 extension 104. We also invite you to visit our website at www.visaserve.com for more information.