SAVE THE DATE: OCTOBER 23-25 | APNA Annual Conference
SAVE THE DATE: OCTOBER 23-25 | APNA Annual Conference

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Immigration Reform, What does it mean to our industry?

 

                        Immigration law has always been a complicated and divisive topic in this country.  On average, about 1.8 million people immigrate to the USA each year. These foreign nationals enter the country looking for better opportunities for themselves and their families. While many enter via legal channels, some enter the US without governmental permission and in violation of United States immigration law, or they overstay their visa, in violation of the law as well.
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Private household employment is a common choice for immigrants who do not have the necessary work authorization to pursue employment elsewhere.   Both employers and employees agree to an “under the table” payment arrangement, bypassing tax obligations.  Employer and employee both avoid required payroll tax expenses, and the US Treasury never receives tax revenue it is due. This is commonly referred to as “working in the shadows” and a new legislative move is afoot to reform immigration laws and regularize the approximately 11 million non-documented workers in the United States.

The Border Security, Economic Opportunity and Immigration Modernization Act, approved May 21, 2013 by the Senate Judiciary Committee, is under debate on the Senate floor as this is written.  Below are some highlights of the proposed law now being considered:

  • E-Verify will be phased in for all      employers over a 5 year period. Families must have an employer tax      identification number (FEIN) in order to perform the E-Verify employment      eligibility check. Significantly, paper I-9 forms which many agencies      provide to their clients today will be eliminated.
  • Undocumented aliens continuously      residing in the US since      December 31, 2011 will be given a 13 year path to citizenship, requiring      payment of back taxes and fines. The back tax requirements are a sticky      point for a variety of reasons, and this may end up becoming a “begin      paying payroll and income taxes immediately” type of compromise.      Theoretically, this will level the household employment playing field, as      undocumented aliens desiring the new provisional resident status will now      desire “on the books” employment. There is no small concern, however, that      families may refuse to cooperate.
  • Annual visa quotas will increase      based on a formula that considers demand as well as the current domestic      unemployment rate.
  • Starting in 2015, there will be a new      W visa to address the guest worker program currently in force.  An      annual quota of 20,000 low-skilled workers will be able to increase      up to a cap of 200,000 after five years.  The number of visas would      fluctuate depending on unemployment rates, job openings, employer demand      and other data.
  • Immigrants with provisional residency      are prohibited from receiving some tax and welfare benefits reserved for      citizens, green card holders, and other temporary work visa holders such      as HB-1 visas. This prohibition includes subsidized health insurance      policies via the new Affordable Care Act exchanges, and some refundable      tax credits for low income wage earners. The Senate bill BEFORE amendments      did not require the immigrants to have health insurance (individual      mandate), a situation likely to be corrected before final voting.

The impact of immigration reform on the household employment industry is unclear. Will families cooperate and begin paying their nannies and housekeepers on the books, at increased cost to them? Will immigrants currently ‘working in the shadows’ in domestic service want to take advantage of the provisional resident status, with an economic cost to them? How will agencies verify legal work eligibility of applicants when e-Verify is 100% phased in?

HomeWork Solutions will periodically post immigration reform updates on its blog – we encourage readers to subscribe. What a final bill will actually look like, and whether in fact it will pass at all, remains very much up in the air.

 

by Vanessa Vidal, FPC  HomeWork Solutions Inc. 

 

 

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