Originally Posted by BENZ-LGB

I odn't know about Walmart, but let me tell you how it works in the construction industry.

ABC builder has a crew of one hundred workers. Like most contractors, a large number of the workers are here without papers. Say, for the sake of argument that 40 out of 100 are here illegally.

The contractor will issue a paycheck to maybe ten of the legal workers. the legal workers don;t get the check. Instead, the supervisors take the checks, take them to a check cashing place and then distribute the money among several of the illegal workers.

Example:

Pablo is here legally. He gets a regular paycheck, usually for more than he earns. So if Pablo's real salary is $10/hour, he may get paid at a rate of $20/hour. On payday Pablo gets a check for $500.00. Pablo endorses the check and his supervisor cashes it. The $500 is then shared (cash) between Pablo and 3 of his co-workers, who are here illegally.

When the various state agencies audit ABC construction, the look legit, because a handful of employees are here legally and are "on the book."

This allows the employer to get away with hiring illegal workers, including day laborers. The employer also receives additional benefits by this practice. In California, Workers compensation rates in the building industry are based on, among other things, whether an employee is "skilled" or not. Highly paid employees are assumed to be skilled and so the WC rates for these employees are lower. If pablo is listed on the books at a higher rate of pay (so there is extra money to pay the other employees as in the example above), the WC carrier assumes that Pablo is a skilled worker, thus the WC rate for Pablo is lower than it should be.

Another way the employer benefits is because by having fewer employees on the payroll it looks like the number of employees is lower than it really is. Again, WC rates will be lower for this employer because his payroll is "lower."

Who gets hurts by this practice of hiring illegal workers in the construction industry?

Legitimate contractors are urt because come bid time, the legit guy cannot compete with the guy who hires illegals and has lower costs. The legit guy employes residents and citizens who then potentially lose their jobs ot the illegals working for ABC Construction.

Who else gets hurt?

We, the taxpayers get hurt. If an illegal alien is hurt on the job, and he is not covered by the WC policy (because he did not technically exist) then you and I and all other taxpayers are hurt becaue WE HAVE to pay for the illegal worker's compensation. Illegal workers are entitled to receive WC benfits, regardless of their status.

I have prosecuted a number of employers, mostly contractors, and I am veyr familiar with the scheme above.

These are the kind of hidden stats that no one likes to talk about.