Legislation has been introduced that would authorize the Texas Workforce Commission to penalize Texas businesses for employing illegal immigrants. HB 559 by Rep. Cindy Burkett (R-Mesquite) applies to any business or individual that holds a license, certificate, registration, permit or other authorization that is issued by a licensing authority as a condition to conducting an occupation, profession, or particular business. This broad applicability covers almost any economic or business activity, some aspect of which requires a license or permit from a state agency.

The legislation charges the Texas Workforce Commission with investigating complaints that a particular business has employed persons not lawfully in the United States. If the Commission finds that this is the case, it may direct the relevant licensing authority to suspend the business’s license or permit. If the business fails to remedy the problem by discharging the illegal employees, it may be liable for civil and criminal penalties.

There is a safe harbor in the proposed legislation for businesses that perform background checks on prospective employees through a federal program for verifying immigration status, or for businesses who have been given false verification information by an employee. Even so, once a complaint has been filed against an employer, it triggers an initial investigation to determine whether a contested hearing is warranted. Employers will thus be required to defend complaints that may later prove to be unfounded or based on inaccurate information. Employers subjected to the administrative process have a right to judicial review of a commission decision by trial de novo.

It is important to note that an employer may lose a license or permit as a result of an final administrative decision that might later be overturned by a court, potentially requiring the employer to reapply to the licensing authority for reinstatement or reissuance of the license or permit. In addition, criminal and civil penalties imposed on the business for operating without a required license or permit may have to be recovered in a later action against the licensing authority that levied the penalties based on the Commission’s final order. Consequently, even if an employer is ultimately exonerated from an alleged violation of the statute, it is still at risk of incurring very substantial legal costs to contest a complaint.

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