The New Immigration Law & Its Impact on Small Business
In today’s economy, it is clearly understood that U.S. businesses face workforce challenges unparalleled in the memories of most company owners and executives. Although current staffing levels are at a record low, owners are expected to provide superior customer service and products at a competitive price. An employer’s challenge is to create a team that can deliver the levels of excellence required by its customers at the least possible cost.
In a service business, the largest cost to an employer is the labor cost. Companies that hire undocumented workers are clearly in an unfair advantage because their labor cost potentially is lower than a company that is following by the rules. Although fines and penalties currently exist to deter unfair hiring practices, rarely are they ever imposed.
Our company, Benjamin Enterprises, provides workforce solutions to help businesses to hire, train and manage employees in the industrial, commercial and federal government markets. We regularly bid on contracts that require unskilled and semi-skilled workers to provide facilities maintenance and security guard services nationwide. On several occasions, potential contracts have been lost to the lowest bidder contractor, who, when you do the math, could not be paying the statutory State prevailing or minimum wages. As a result, we see good contract opportunities awarded to companies with questionable hiring practices.
To be within compliance of our current immigration laws, our HR department conducts an extensive background inspection of all potential hires. We begin our application process by requiring at least two forms of identification. We have found it beneficial to look at the individual’s original social security cards to confirm that it is not a copy. Copies of identifications are not acceptable. E-verify along with similar electronic databases are used to check the accuracy of social security number, driver’s license and criminal background information. We have found the E-verify system to be precise, easy-to-use and efficient.
To hire and train an employee cost over 40% of the employees wage (The Frugual Entrepreneur1). That’s expensive and many small businesses need help to continue to grow. It is clearly documented that workers employed by small businesses make up 52% of the national workforce. That’s 47.7 million Americans that work for companies that employ less than 500 persons (U.S. Department of State Department2). Acknowledging these facts, our government should recognize that small businesses are more likely than giant corporations to hire from within their communities. Unlike large, conglomerate corporations that have mega headquarters and stockholders to answer to, small business are more likely to reinvest in their communities through local purchases of products and services. Government programs that encourage and enhance the growth of small businesses ensures a strong future for the American economy.
Too often, the small business struggles to sustain employment for their workers within the constraints of very small profit margins. Too often, employee hiring and training suffers. Government spending geared towards the improvement of job skills for our workers would be money well invested in America’s future.
Michelle Benjamin is the Founder and CEO of Benjamin Enterprises. She has created Workforce Solutions through Labor Management and Training for major corporations for over 25 years. She can be reached at 800.677.2532 or firstname.lastname@example.org