Blaze News investigates: Employers attempt to skirt liability for hiring illegal aliens by using staffing agencies

The millions of illegal immigrants who have entered the country over the past several years by submitting asylum claims are, generally speaking, not authorized to work in the United States. Despite that, some of those more than 11 million illegal aliens are successfully finding work opportunities.

Individuals across the globe have flocked to the U.S. under the Biden-Harris administration's leadership in hopes of finding better economic opportunities in America, gaining entry into the country under the guise of seeking asylum to flee persecution.

Laws prohibiting employers from hiring illegal immigrants have not turned off America's economic magnet but only prompt some employers to find ways to work around the system to hire unlawfully and exploit cheap labor.

How businesses circumvent the law

Under federal law, businesses are forbidden from employing individuals they know do not have a legal right to work in the U.S. Nonetheless, the Biden-Harris administration has failed to crack down on companies and staffing agencies that have been caught hiring illegal aliens, including underage children.

While its Department of Labor and Immigration and Customs Enforcement have taken some recourse to prevent these unlawful practices, the administration has not done enough to make a significant impact. According to Pew Research, the number of illegal immigrants in the workforce increased from 7.4 million in 2020 to 8.3 million in 2022, matching the all-time record, set in 2008 and 2011.

’In almost all of these cases, the employer has outsourced the hiring process to a labor contractor.’

Evidence of the administration's failure to shut down the border and implement effective consequences for illegal labor violators can be seen in the DOL's own reporting, which states there has been an 88% increase in child labor violation investigations from fiscal year 2019 to 2023. Often, the children being illegally employed at various establishments are foreign nationals who have obtained fraudulent paperwork that falsifies their age and work authorization.

As one example, in March, the DOL went after the Tuff Torq factory in Morristown, Tennessee, which it claimed was caught illegally employing children in dangerous conditions and requiring them to work long hours. An NBC News report discovered that some of the children working unlawfully at the establishment were illegal immigrants.

The manufacturer's legal representation claimed that the children were temporary hires who were indirectly employed through a staffing agency. Despite its defense, the DOL announced that the manufacturer faced nearly $2 million in fines.

The DOL told Blaze News, "Tuff Torq contracted the services of staffing agencies. The consent judgement from March, 2024 now requires Tuff Torq to require any new staffing agencies and subcontractors to disclose child labor violations and provide information regarding hiring protocols designed to prevent child labor. The consent judgment also prohibits Tuff Torq from entering into any new contracts with staffing agencies or subcontractors that the company knows has violated child labor laws."

This is just one of the many instances where a business has been busted for illegal hiring — in this case, underage children — while using a third-party staffing agency to recruit its workers. Using a labor contractor allows companies to hide behind these layered hiring practices, deflecting blame by claiming it was unaware that the employees were unauthorized to work.

Jessica Vaughan, the director of policy studies for the Center for Immigration Studies, told Blaze News, "When we find out about instances of labor trafficking that involve numerous people who have entered [the U.S.] on a visa or who may have been hired illegally, in almost all of these cases, the employer has outsourced the hiring process to a labor contractor."

Vaughan explained that businesses are incentivized to use third-party staffing agencies because it not only makes hiring easier and more efficient — especially amid a worker shortage — but also sometimes "gives them what they think is the ability to look the other way at the hiring practices."

Vaughan described that in some instances, the employers know the staffing agency's hiring practices violate the law. However, because the third-party company is "doing the dirty work," businesses "believe that they are insulated from liability for either hiring illegal workers, or for abusing workers, or harboring labor trafficking, or benefiting from labor trafficking."

The DOL's investigation into Tuff Torq sparked a separate inquiry into the labor contractor it used to employ the illegal immigrant children. Yet, the agency faced minimal consequences for hiring minors and referring them to "dangerous" positions. Earlier this month, the department ordered Luttrell Staffing in Kingsport, Tennessee, to pay $121,572 in civil penalties and demanded the agency "comply with federal child labor regulations."

The recruiting group, founded in 1993, has a network of 40 offices across six states, generating more than $150 million in yearly gross revenue, according to its website.

The DOL's regional solicitor Tremelle Howard called the recourse against Luttrell Staffing part of the agency's "relentless pursuit" to ensure children's safety.

‘The system of work visas is run by these third-party labor contractors.’

Luttrell Staffing Group President and CEO Mary Wagner told Staffing Industry Analysts that the children "misrepresented that they were 18 or older during the hiring and onboarding process by providing fraudulent documentation of their identity and age."

"Luttrell Staffing Group would never knowingly violate child labor laws, particularly by placing a minor in a hazardous position," she stated.

Wagner claimed that the underage workers passed the E-Verify system by providing “fraudulent documentation of someone else's identity.”

E-Verify warns that this is a problem, and employees must be aware that illegal immigrants may provide fraudulent documents of another individual’s identity to get past the verification system.

"The issue of fraud is growing, particularly concerning identity theft for employment purposes," Wagner stated. "Luttrell Staffing Group is taking this matter very seriously and enhancing our current processes to confirm the authenticity of documentation and ensure that workers can legally perform their assigned work.”

Staffing companies exploit workers

Vaughan told Blaze News that many of the staffing agencies are "fly by night" businesses that, after they get busted by law enforcement, reappear under a different name or in a different location and continue operations because it is "pretty lucrative."

In fact, last year, two labor brokers tied to a string of staffing agencies faced prison time and a nearly $8.5 million penalty for hiring roughly 100 illegal aliens who were contracted out to hospitality businesses in Key West, Florida.

One of those individuals, Eka Samadashvili, who pleaded guilty, admitted that the staffing agencies entered into contracts with hotels, bars, and restaurants in the area that "helped" the businesses "attempt to disclaim responsibility for ensuring that workers were legally authorized to work in the United States and that federal employment taxes were withheld and paid over to the IRS."

According to Samadashvili, "many" of her "customers knew or had reason to believe" that the employees were unauthorized to work.

Despite their sometimes questionable operations, staffing agencies have the ability to apply for work visas on behalf of their contracted-out employees. By law, these staffing companies are expected to cover the costs of the visas, as well as any training or tools required for the job. However, some staffing agencies make unlawful side deals with workers to cover these expenses.

Vaughan told Blaze News that in these situations, the staffing companies are cheating and exploiting the workers.

"[The employees] end up with very little take-home pay, stuck in a compound that they can't leave, forced to buy food at a very expensive convenience store that, coincidentally, is run by the staffing company. This becomes a very exploitative situation, and it often crosses a line into forced labor trafficking because they have misled the workers," she explained.

"There are instances where it does cross the line into very abusive and violent behavior toward the workers," Vaughan continued. "I've seen cases where you've got a bunch of workers who come in to work on a pine straw farm or some other kind of agricultural enterprise, and they'll pick out the women to be subject to sexual abuse."

"The system of work visas is run by these third-party labor contractors," she added. "I think the federal government ought to give serious consideration to barring third party labor contractors from the ability to obtain visas for workers they've recruited."

A health care staffing company based out of Cincinnati, Ohio, was previously accused of running an operation that exploited its workers.

Health Carousel recruited employees from the Philippines to work in hospitals in the U.S. Some of those workers lodged a lawsuit against the staffing company in 2020, seeking class-action status and claiming the agency violated federal and state human-trafficking laws.

A December court filing accused the company's "employment" of being "essentially indentured servitude."

Novie Dale Carmen, a former contractor from the Philippines, stated that the company placed her in a nursing position in Pennsylvania. She claimed that the agency demanded $20,000 from her to quit the job, requiring her to work 6,240 hours to fulfill her contract obligations.

However, according to Carmen, the company did not count many of the hours she dedicated to the job, including her first three months of employment and overtime.

Additionally, Carmen stated that she was paid $25.50 per hour while Health Carousel received $52 or more per hour for her work. Other plaintiffs that joined the lawsuit had similar grievances, with one worker stating she earned $45.56 per patient visit while those directly hired through the facility earned up to $105 per visit.

Health Carousel filed a motion to dismiss the lawsuit in January, stating, "Despite the invaluable service Health Carousel and its employees provide in helping address staffing shortages (especially during this time of national crisis), this lawsuit demonizes Health Carousel as a 'human trafficker' and a 'racketeer.'"

The agency ultimately agreed to a $6 million settlement over the nurses' lawsuit.

"While Health Carousel acted lawfully and in good faith, we decided that agreeing to this settlement is in the best interest of our company and our healthcare professionals," said John Sebastian, Health Carousel's chief executive officer.

The staffing company was also the subject of a civil and criminal investigation over allegations that it submitted fraudulent visa applications and caused false statements to be made to government officials regarding recruiting. The investigation did not result in criminal charges being filed. However, Health Carousel agreed to settle in March for more than $9 million.

Sebastian stated, "Health Carousel is dedicated to upholding the highest standards of ethical conduct and is proud of the work we do to improve patient access to qualified healthcare professionals. In 2018, we became aware of problematic conduct in our visa process and started making immediate corrections."

"Health Carousel has cooperated with the Department of Justice, accepts responsibility for its prior conduct, and is pleased that this resolution brings this matter to a close. This global resolution allows us to continue focusing on our mission to bring highly trained healthcare professionals to the United States to help address nationwide staffing shortages," Sebastian said.

How some states are picking up the slack for the federal gov't

States hoping to fight back against the Biden-Harris administration's open border chaos have implemented laws to crack down on unlawful hiring. Since most of the illegal immigrants entering the U.S. are interested in finding better work opportunities, turning off a state's potential economic magnet can act as an effective deterrent.

While businesses hiring illegal aliens typically fall within the federal government's jurisdiction to investigate and dole out consequences, Vaughan told Blaze News that states could find other ways to hold companies accountable, such as requiring citizenship verification systems like E-Verify, which are voluntary on a nationwide-basis.

Vaughan told Blaze News, "States are limited in imposing penalties on employers who hire illegal workers."

"There are criminal penalties for that, but they have to be brought federally," she explained. However, Vaughan noted that states incorporating specific language such as "willful blindness" or "reckless disregard" into bills regarding hiring practices could impose "some accountability on the main employer, rather than the contractor."

‘They need to have some fear of consequences.’

Vaughan told Blaze News that instead of solely relying on the DOL to push forward with consequences for employers who violate these laws, state prosecutors should "think about having a partnership" where they try "to work together to bring criminal cases."

"I think the big problem is either [the states] lack this language that would hold the employer accountable, or they're lacking the experience to go after these cases," Vaughan continued. "And sometimes they're discovered by Labor Department officials who do not have criminal investigative authority. They can only impose civil penalties like fines or deal with their licensing."

"Not enough states have tried to approach this in the context of criminal law violations, and those are the penalties that are more severe and that are going to be more than a cost of doing business to an employer," she said, noting that the cost savings of utilizing cheap illegal labor can sometimes cover the fines imposed as a result of getting caught for such unlawful actions.

Vaughan told Blaze News that when states see a staffing company involved in a business's hiring, they should ramp up their monitoring efforts.

"They should be inspecting the premises and looking into the finances and payrolls of these companies because there is such a track record of fraud and abuse," she stated. "They need to have some fear of consequences and be denied the opportunity to profit off of this exploited labor."

Florida is one such state that has attempted to implement more consequences for employers trying to skirt the hiring laws.

Last year, Florida Gov. Ron DeSantis (R) signed what his administration called the "strongest anti-illegal immigration legislation in the country," Senate Bill 1718, which was created in response to the Biden-Harris administration's unprecedented unlawful immigration crisis.

The legislation made it mandatory for employers with 25 workers or more to implement the E-Verify system to check on the eligibility of employees. Businesses failing to use the verification system could face a $1,000 daily fine. Additionally, employers knowingly hiring individuals ineligible to work could lose their licenses.

"This legislation creates a third-degree felony for an unauthorized alien to knowingly use a false ID document to gain employment and prohibits a county or municipality from providing funds to any person or organization for the purpose of issuing IDs or other documents to an illegal alien," DeSantis' office announced at the time.

A Pew Research report found that in 2022, Florida had the third largest population of illegal immigrants, with an estimated 1.2 million. However, a May report from NBC News claimed that SB 1718, which went into effect last July, has pushed "many undocumented workers ... to move out of Florida."