Is it Worth the Risk to Hire a Day Laborer?

Hiring day laborers has become relatively commonplace in the Garden State. But, is it legal? If it is legal, what are some of the steps that need to be taken in order to keep it legal. These questions, and more, are answered by construction law attorney Rob Nussbaum in the latest episode of The Garden State Law podcast.

What is The Garden State Law Podcast?

The Garden State Law Podcast discusses all things legal in the state of New Jersey. Presented by lawyers from Saiber LLC, the Garden State Law Podcast highlights trending topics in litigation, transactional law, real estate, and more.

00:00:03:19 - 00:00:12:06
Tim
Welcome back to the Garden State Law Podcast. I'm your host, Tim Lough. Joining me today is Saiber commercial litigator and construction litigator Rob Nussbaum. Rob, thank you for joining us.

00:00:12:12 - 00:00:13:21
Rob
Pleasure to be here today.

00:00:13:21 - 00:00:20:27
Tim
Rob and I will discuss the pros and cons of hiring a day laborer. Rob, before we get into it, maybe you could tell us a little bit about yourself and your practice.

00:00:20:28 - 00:00:47:07
Rob
Sure. I am an attorney in the state of New Jersey. I went to the University of Pennsylvania undergraduate and graduated from Seton Hall Law School in 1987. I've been practicing law since 1987 and doing a lot of construction litigation. construction, lean law, contract review and drafting, probably since the early to mid 1990s.

00:00:47:10 - 00:01:07:23
Tim
Now, I understand hiring someone as a day laborer is probably fraught with issues, but I don't know specifically what may be illegal or what may be even not recommended. Before we get into that. can you tell us a little bit about what is a day labor? And if you are, let's say, a builder or a landscaper, where where do people go about finding these day laborers?

00:01:07:25 - 00:01:44:15
Rob
A day laborer is exactly what the term says. It's a worker who works on a day to day basis. looking for jobs that are in construction, landscaping, home improvement, whatever. they are typically found at construction sites or near construction sites. There are many who hang out by construction supply stores like Lowe's or Home Depot. Some towns even have designated areas where day laborers can congregate, and then homeowners or employers.

00:01:44:15 - 00:01:57:21
Rob
Construction crews can go and look for them and hire them for a day of work. there's also websites and social media, and word of mouth also helps people find work on a day laborer basis.

00:01:57:24 - 00:02:04:15
Tim
Okay, so the $100,000 question is really is it illegal specifically to hire a day laborer?

00:02:04:17 - 00:02:33:17
Rob
It is not illegal to hire a day laborer, provided that the person the day laborer, is legally entitled to work in the United States. What is illegal is for an employer to pay that day laborer cash, or off the books in an effort to avoid paying taxes, unemployment, worker's compensation, social security deductions, and the like. That is illegal.

00:02:33:18 - 00:02:48:29
Rob
But hiring the laborer per se is not illegal, and nor is paying the day laborer in cash. You can do that too. You just are required to keep the requisite records, needed to document the work and the pay.

00:02:49:01 - 00:03:00:09
Tim
So I guess that brings me to my next question. How are you recommending or what are the steps that you recommend to anyone who would consider hiring a day laborer to make sure that you're on the up and up?

00:03:00:11 - 00:03:27:25
Rob
Well, you have to remember that an employer who hires a day laborer, still is subject to state and federal laws. That would be state labor laws, federal labor laws, minimum wage laws. you have to worry about taxes. so the tax code applies, OSHA safety standards applies. and most importantly, these days, the immigration status of the day laborer.

00:03:27:27 - 00:03:40:18
Rob
You're required under the law to complete a form I-9 that gets filed with department of Homeland Security to document that the day laborer is entitled to work here.

00:03:40:20 - 00:04:01:08
Tim
So that brings up a good point about, immigration. and when, when hiring someone, specifically, you may think, all right, is this person here legally or illegally? What do you recommend? Or what are the steps that should be taken, by someone who's hired a day laborer? when considering, immigration laws, it's something you should ask specifically to the person that you're going to pick up.

00:04:01:08 - 00:04:03:08
Tim
Or what do you think you should do?

00:04:03:10 - 00:04:26:17
Rob
you definitely should ask. Because as I said a few minutes ago, you were required to fill out the form I-9 that gets filed with the Department of Homeland Security. Since 1986, it has been illegal to hire illegal aliens, illegal workers who are here undocumented, for jobs. And the I-9 is intended to

00:04:26:17 - 00:04:27:16
Tim

00:04:27:18 - 00:04:50:09
Rob
keep people honest about that. It has to be filed within three days of when the day laborer is hired, and it has to be completed, even if the day laborer is just working for one single, solitary day. There are significant penalties, that range from the hundreds of dollars to the thousands of dollars to the tens of thousands of dollars.

00:04:50:12 - 00:05:17:28
Rob
If you fail to maintain an I-9 form or fail to accurately record the information in the I-9 form. So I think what you have to do is verify that the day laborer, even if it's an immigrant, is here legally, if they're working pursuant to a green card or some other documentation that allows them to work in the United States legally.

00:05:18:00 - 00:05:25:02
Rob
But you should not be hiring undocumented and illegal aliens, or you're going to run afoul of the immigration laws.

00:05:25:05 - 00:05:52:19
Tim
So that leads well into my next question is what happens if somebody gets hurt? So I know day laborers typically will be blue collar workers who, maybe they are working for a landscaping company, where they're doing manual work, or maybe they're working for, roofing company for a day or two because someone called in sick. So what are some of the considerations that, employers should think about specifically in terms of what if a day laborer, actually gets injured on the job?

00:05:52:22 - 00:06:25:10
Rob
Well, if a day laborer gets injured and is being paid off the books in cash, illegally. chances are you're not going to have worker's compensation. An insurance worker's comp insurance typically protects the employee and the employer for personal injury claims that occur in the course of work. If you don't have worker's comp protection and an employee, even a day laborer, gets injured, you run the risk of being sued in a personal injury action.

00:06:25:13 - 00:06:51:13
Rob
Just because they're a day laborer doesn't mean they give up their rights to file lawsuits to protect their personal injury rights. So personal injury actions can often have greater compensation that might be available under the worker's compensation statute for, permanency and temporary disability. So that's one risk. You also run the risk of a day laborer.

00:06:51:16 - 00:07:16:17
Rob
If you tell him that they got hurt, you got hurt, and you don't protect them medically. with their worker's comp insurance or paying their bills, you run the risk of them going to OSHA and reporting you for a violation, which could lead to an investigation and audit and significant penalties if they find unsafe work conditions at the worksite, which gave rise to a personal injury.

00:07:16:19 - 00:07:38:02
Tim
So you had mentioned being paid off the books a moment ago, and I think that's another reason why people probably rely on day laborers, because they are paying people off the books. which is I'm sure it's highly on under recommended. So what do you what is your advice to a construction company, a builder, a landscaper?

00:07:38:04 - 00:07:43:04
Tim
Anybody who is hiring day laborers specifically, specifically because they want to pay them off the books.

00:07:43:04 - 00:08:13:05
Rob
Don't do it. And if you are doing it, document it. Because if the IRS comes and conducts an audit and looks at your records, looks at your employees, speaks to your employees, you could find yourself in a lot of hot water for, tax fraud, for not keeping required records. and that could come with penalties such as a lawsuit, penalties, criminal penalties, civil penalties, having to pay back taxes and interest.

00:08:13:07 - 00:08:21:04
Rob
There are also criminal fines and criminal prosecutions, which could result in criminal penalties, including incarceration.

00:08:21:07 - 00:08:38:23
Tim
Okay, so main takeaways. clearly we need to be careful when we're hiring, my labor, but what are some of the more most, important aspects, of, key considerations for hiring a day labor that you'd recommend for really any business?

00:08:38:25 - 00:09:03:07
Rob
I would recommend doing things legally. It's not, as I said earlier, illegal to hire a day laborer. It's illegal if you're doing it for an improper purpose, such as to avoid paying taxes and insurance, unemployment and the like. I think that to the extent that you can keep your documentation, in order, that will go a long way to protecting you.

00:09:03:09 - 00:09:25:05
Rob
I understand that people want to avoid these costs because, it's expensive to maintain a payroll. but it's also expensive to pay penalties, go to jail, and have significant fines. So it's a cost benefit analysis. And, if it comes down to me, I, always come out in favor of doing things legally and the right way.

00:09:25:07 - 00:09:44:29
Tim
Okay. Thank you, Rob, for joining us. If anybody has questions for Rob, you can contact him at [phone] or [e-mail]. That's R N U S S B A U M @saiber.com. Thank you to all those for listening and watching. Make sure to subscribe to our YouTube and podcast channel and we'll talk to you next time.