Employment Law Commentary - July 2005

In a recent, highly publicized settlement between Wal-Mart and the Department of Homeland Security ("DHS") arising from the employment of undocumented workers by Wal-Mart contractors, Wal-Mart agreed to pay $11,000,000 to resolve charges that it violated the Immigration Reform and Control Act ("IRCA").¹ Most employers assume that they are not responsible for the employment practices of their contractors. The Wal-Mart settlement has left many employers wondering whether they too could be held liable for IRCA violations committed by vendors and consultants they thought were independent. In this article, we explain the legal background of IRCA and what went wrong at Wal-Mart. We then offer tips to minimize the risk of incurring liability arising from contractors’ IRCA violations.