Here are a few examples of what might go wrong with illegal labour and why it is better to conduct your business properly and always act by the book.
Why do people hire illegal workers in creative services?
Illegal labour is a plague that has already extended past the sweatshops in remote countries – an image we are used to associate this term with. Nowadays even some modern tech companies who are in need of copywriting, marketing, video or SEO services decide to take a turn for the worse and look into entering the black market economy. What makes them do that?
Motivations differ. Some people believe it is cheaper, so they see illegal labour as a cost-cutting device, or at least some sort of business optimization. Others believe that it gets them ahead in the business game. Illegal labour is viewed by them as a way of fighting competition, who might also be using undocumented subcontractors. To keep up with them, they use the same, entering a vicious circle of illegal labour.
Another group of people consists of those discouraged by complex legal work that is required even for a small project. They believe that hiring someone without conducting all the paperwork saves them time and energy. And some people are just uninformed – they are not familiar with the complex employment market issues, don’t know how to hire freelancers, how to pay freelancers and how to run a business. They might be just starting out and they lack insights into how successful and honest entrepreneurs work.
Of course all of the approaches listed above are wrong for anyone who truly wants to succeed in the business world. Illegal labour is not the foundation you would want to build on. But why?
Consequences of illegal labour
Consequences of hiring undocumented workers – even freelancers – can be harmful both to your business, the said employee, and society in general. Let’s take a look at what can go wrong.
- From your company’s point of view, your business reputation is damaged the moment you enter into an illegal transaction. Even when you think it is a secret well-kept, there is always another party in this deal and at some point they might tell other people that your company prefers to skip a few legal steps. This is not a good look for your business! It is known that companies who are called out on using illegal workforce have been boycotted and thus had to spend a long time rebuilding their reputation.
- There are also obvious legal consequences for you – the entrepreneur. These vary depending on the jurisdiction you are in. Your company might have to pay a fine, some more rigid legal action can follow, and sometimes – even criminal charges. Compared to reputation damage, being accused of criminal activity is even worse. Is it worth to risk your company for that?
- Now let’s change the perspective and look at your potential employee. People who fall victim to illegal labour are often desperate to get a job and already underprivileged. One consequence of entering this kind of transaction for them is having no employee rights. They are not entitled to days off, paid maternity or paternity leave, standard working hours.
- Their position as an employee is totally diminished. Moreover, the stability of their employment is always at risk. An “employer”, who wants to end the cooperation, can do that on a whim, as there is no binding contract between them. There is no social security for an employee who is hired illegally, which creates space for exploitation and abuse.
- Finally, there are some general risks connected to illegal labour being introduced in a certain society. First of all, the quality of work suffers. Similarly as in the process of price dumping – illegal workers might underperform to match the conditions they are offered, and this in effect spoils the entire market. If a person is not given basic employee rights, do you really believe them to be giving 100 per cent at their “job”?
- Another problem is the loss of tax revenue for the country this deplorable practice takes place in. Companies and employees that operate legally have to pay taxes, which support the development of the country. When this step is skipped, society suffers collectively, as its government gets less money than it should be getting. This might result in a shrinking economy, which is even sadder in the context of the failing rule of law within this specific market.
What can go wrong? Examples in different countries
Hiring illegal workers is a constant stressor. It puts at risk your money, reputation and business continuity. These examples from different countries show that illegal labour is not the best business practice, to say the least.
In 2008 in the US the Immigration and Customs Enforcement (ICE) agents entered the Agriprocessors plant in Iowa, which was a meat-processing and packaging company. It was seen as the largest criminal worksite enforcement operation in American history. The raid resulted in arresting hundreds of illegal employees and criminal charges against the company’s management, including the CEO.
A similar situations took place in 2013 in the UK. The UK Border Agency (which is now part of the Home Office) raided the facilities of The Officers Club, a fashion chain for men and boys. Although the legal context is different for America and Great Britain, this also resulted in similar outcomes: the company faced fines and penalties for employing illegal migrants, while the management had charges pressed against them. What is interesting is that both Agriprocessors and The Officers Club are no longer operating.
Official inspections are nothing unusual in other countries as well. For example, in Poland there are two state bodies who are entitled to these: State Labour Inspectorate (PIP) and Border Guard (SG). Both institutions are able to verify the legality of work and business activities, while the Border Guard can also control foreigner’s legality of stay in Poland, if the case deals with foreigners.
If an inspection reveals some legal shortcomings, the inspector may apply appropriate legal measures to punish the employer and the illegally employed worker. These may include:
- fine for the employer (from PLN 3,000 to PLN 30,000),
- fine for an illegally employed person (from PLN 1,000 to PLN 30,000),
- obligation for a foreigner to return to their home country,
- ban on the employer’s business activity.
How to solve your problems as employer?
If you want to avoid the scenarios discussed above and you operate in the copywriting, marketing, office management, video or SEO services, try Useme.com to help you out with paying your freelancers. Instead of the usual contract for specific work, which requires a lot of admin tasks, you can use Useme to deal with the work done by your subcontractor, including contracts, invoices and an intuitive platform to manage your assignments and all aspects of cooperation. With this solution you can also be sure tha t the whole transation is secured.
