By:  Timothy Sutton, ICG Communications Editor

High unemployment across the country may be contributing to the shift in focus by numerous State and Federal agencies toward eradicating the underground economy. This term is used in the insurance industry to refer to unlicensed, untaxed, and uninsured employers or contractors. In immigration circles, the illegal workforce is the common term used to represent undocumented workers who like workers in the underground economy, represent the unlawful economic advantage unscrupulous employers have over law-abiding businesses. In response to these illegal employment practices, the government is on a crusade to incentivize the legal employment of American workers.

This July, California’s Department of Insurance spearheaded a multi-agency task force similar to undertakings of ICE, DHS, OSC, and SEC. Detectives from the California Department of Insurance (CDI), the Contractors State License Board (CSLB), Employment Development Department (EDD), and County District Attorneys’ offices effectively created their own “Avengers” partnership to make an 11 county sweep across California, resulting in 104 enforcement actions.

US businesses are not strangers to regulatory enforcement. Arguably, complicated regulations on tax, insurance, employment and immigration laws deter the success of small to mid-sized American companies trying to expand into today’s global marketplace. Large corporations avail themselves of depressed wages and lenient international labor regulations by outsourcing labor to under-developed nations. Government regulatory and enforcement agencies like ICE have no jurisdiction to punish large corporations that exploit workers overseas. Consequently, “Avengers,” like the California task force against the underground economy, mostly impact local and domestic companies, often to their demise.

Competing against global-economic influences on a long-term basis in any industry requires strict scrutiny of company hiring policies, employment practices, and compliance with a complex myriad of tax, insurance, and immigration laws. If your business employs a domestic workforce, large or small, contact us to learn more about workforce compliance and subscribe to our blog  for the latest immigration news and updates.