A Convenient Loophole

Alabama the Beautiful the sign at the state line says. There are probably some that would argue with that description but I think for the most part it fits. Alabama has recently gotten a lot of national attention for the passage of what many term is the strictest immigration bill passed in any state. While most everyone agrees that it is the province of the Federal Government to set immigration law there is a growing consensus in this country that the Federal Government is not doing very well at enforcing the existing regulations. State governments squeezed by rising health care and unemployment costs are having troubles making ends meet. A lot of people believe one of the reasons for these problems is the growing influx of illegal alien workers and their families.

The thinking is that these workers who often don’t contribute to the tax base are a double whammy when it comes to social services as their children attend public schools at the same time their families often take advantage of health care services that the state ends up paying for when people without insurance require medical care. On top of this loss is the simple fact that illegal workers take up jobs that US citizens would otherwise be able to do. I won’t bother to go into the merits of these arguments at this time because it seems to me that the illegal immigration problem is really fairly simple to solve. All we really have to do is enforce existing laws. If employers in this country were faced with the real prospect of paying the high fines such infractions are supposed to bring upon them, they would quit hiring illegal workers. Without jobs I can assure you that illegal workers would not be pouring into this country. It is really a simple matter to control the supply of workers by eliminating the demand for their services.

However, since the reality is that we are not likely to do something as sensible as enforce the existing laws in this country we have seen several states in the recent past pass legislation attempting to protect state interests from illegal workers; Alabama’s House Bill 56 being probably the most severe law passed so far.

Currently, there are ongoing attempts to overturn the law or have it declared unconstitutional and as late as last week a federal judge in Birmingham did set aside certain features of the law as being unconstitutional. Again, this is outside the scope of what this particular post is about so I won’t bother to go into this in any detail; just remind the reader that it is an ongoing process. The point of this particular post is to point out a convenient loophole in this law. HB 56 has been widely disparaged and supported from many different sides but I have yet to hear or read of a conversation concerning this loophole.

In order to explain just how far the drafters of this bill went to combat the influx of illegal workers into this state I would like to point to the following sections which many find the most ludicrous and uncharitable:

Section 13. (a) It shall be unlawful for a person to do any of the following:
(1) Conceal, harbor, or shield or attempt to conceal, harbor, or shield or conspire to conceal, harbor, or shield an alien from detection in any place in this state, including any building or any means of transportation, if the person knows or recklessly disregards the fact that the alien has come to, has entered, or remains in the United States in violation of federal law.
(2) Encourage or induce an alien to come to or reside in this state if the person knows or recklessly disregards the fact that such coming to, entering, or residing in the United States is or will be in violation of federal law.
(3) Transport, or attempt to transport, or conspire to transport in this state an alien in furtherance of the unlawful presence of the alien in the United States, knowingly, or in reckless disregard of the fact, that the alien has come to, entered, or remained in the United States in violation of federal law. Conspiracy to be so transported shall be a violation of this subdivision.
(4) Harbor an alien unlawfully present in the United States by entering into a rental agreement, as defined by Section 35-9A-141 of the Code of Alabama 1975, with an alien to provide accommodations, if the person knows or recklessly disregards the fact that the alien is unlawfully present in the United States.
(b) Any person violating the provisions of this section is guilty of a Class A misdemeanor for each unlawfully present alien, the illegal presence of which in the United States and the State of Alabama, he or she is facilitating or is attempting to facilitate.
(c) A person violating the provisions of this section is guilty of a Class C felony when the violation involves 10 or more aliens, the illegal presence of which in the United States and the State of Alabama, he or she is facilitating or is attempting to facilitate.

Basically it is no longer legal, according to this law, to conceal, harbor, transport, or even encourage the visitation of illegal workers under penalties up to and including conviction of a Class C felony. While this is the section of the law that has many people up in arms as being uncharitable or even worse in this state, unchristian; it is a fair idea of the seriousness with which the Alabama Legislature has taken it upon itself to do away with the issue. Our legislature means business. We want no more illegal workers in this state. Unless…

I know what you are thinking. Unless what? If we are willing to lock up Alabama citizens for simply giving a ride to illegal workers under what exception are we willing to overlook hiring them? There is a saying about how a chicken and a hog feel about breakfast; the chicken is involved when she gives her egg, but the hog is committed when he gives his ham. In this case it seems that some legislators are likely a little more committed in some areas of employing illegal workers than others.

In the opening part of HB 56 there is a long list of situations that the bill sets out to address not the least of which follows:

to prohibit a business entity, employer, or public employer from knowingly employing an unauthorized alien and to provide penalties;

This seems simple enough. After all, to control or eliminate employment of illegal workers is largely the main impetus for drafting the bill in the first place. Unfortunately, this is only partly true in this case. Tucked down in Section 15 you will find this loophole:

(l) This section does not apply to the relationship between a party and the employees of an independent contractor performing work for the party and does not apply to casual domestic labor performed within a household.

Ok… I know what you are thinking now; we can’t hold people responsible for hiring a contractor who might hire an illegal worker. Fair enough. However, it is the second part that contains the disgraceful loophole:

and does not apply to casual domestic labor performed within a household.

Why would we put this exception in? Maybe a person or persons who drafted this legislation have some reason for putting such a loophole into HB 56. Could it be that some of the legislators in Montgomery employ illegal workers for domestic labor within their own household? I mean after all, you can’t really blame the wealthy lawyers and business owners that populate our legislature if they don’t want to pay decent wages to have their house cleaned or their grass cut. They probably can’t afford to hire a maid service or a grass cutting service that might be forced to provide minimal benefits and wages to their employees. Maybe the whole domestic labor loophole is an oversight. After all, the whole purpose of the act is to make it illegal to employ illegal workers and anyone who hires someone to do anything is by definition an employer according to any reasonable definition of the term.
Unless… you happen to read the definitions in HB 56 Section 3:

(5) EMPLOYER. Any person, firm, corporation, partnership, joint stock association, agent, manager, representative, foreman, or other person having control or custody of any employment, place of employment, or of any employee, including any person or entity employing any person for hire within the State of Alabama, including a public employer. This term shall not include the occupant of a household contracting with another person to perform casual domestic labor within the household.

So… an occupant of a household contracting with another person to perform casual domestic labor within the household is NOT an employer according to this act. Well… surely anyone who hires an illegal worker is in fact offering them employment. Unless you happen to read 6) as well:

(6) EMPLOYMENT. The act of employing or state of being employed, engaged, or hired to perform work or service of any kind or character within the State of Alabama, including any job, task, work, labor, personal services, or any other activity for which compensation is provided, expected, or due, including, but not limited to, all activities conducted by a business entity or employer. This term shall not include casual domestic labor performed in a household on behalf of the occupant of the household or the relationship between a contractor and the employees of a subcontractor performing work for the contractor.

What a strange coincidence. It is not considered employment at all under HB 56 to do domestic labor on behalf of the occupant of the household. I am struggling to come up with a proper term to describe this type of arrangement whereby one person utilizes the labor of another if it is not employment; servitude? Slavery? Chattel ownership?

In any case, the drafters of this legislation were so determined to do away with employment of illegal workers that they even attempted to stop the practice of making tax deductions based upon employment of illegal workers:

Section 16. (a) No wage, compensation, whether in money or in kind or in services, or remuneration of any kind for the performance of services paid to an unauthorized alien shall be allowed as a deductible business expense for any state income or business tax purposes in this state. This subsection shall apply whether or not an Internal Revenue Service Form 1099 is issued in conjunction with the wages or remuneration.
(b) Any business entity or employer who knowingly fails to comply with the requirements of this section shall be liable for a penalty equal to 10 times the business expense deduction claimed in violation of subsection (a). The penalty provided in this subsection shall be payable to the Alabama Department of Revenue.

Not only is it illegal to make the deductions; you will henceforth be subject to fines up to 10 times the deduction if you are caught doing so. What about our little loophole about domestic labor? Forget it. This applies to “Any business entity or employer”. But wait a minute, we have already seen that you can’t be an employer under HB 56 just for employing someone to do domestic labor in your home. Maybe you can be a business entity? Let’s see how Section 3 defines a business entity:

(2) BUSINESS ENTITY. Any person or group of persons performing or engaging in any activity, enterprise, profession, or occupation for gain, benefit, advantage, or livelihood, whether for profit or not for profit. “Business entity” shall include, but not be limited to the following:
a. Self-employed individuals, business entities filing articles of incorporation, partnerships, limited partnerships, limited liability companies, foreign corporations, foreign limited partnerships, foreign limited liability companies authorized to transact business in this state, business trusts, and any business entity that registers with the Secretary of State.
b. Any business entity that possesses a business license, permit, certificate, approval, registration, charter, or similar form of authorization issued by the state, any business entity that is exempt by law from obtaining such a business license and any business entity that is operating unlawfully without a business license.

No….. I guess not. In other words the carefully crafted loophole for hiring domestic labor in your home also allows you to be exempted from paying a fine if you get caught illegally taking a tax deduction for it as well. It almost makes you proud to be an Alabamian. Either that, or it makes you long to be a legislator. It reminds me of the story about Ulysses S. Grant and his response to the first suggestion that he go into politics:

“I don’t think I belong in politics…. But… I could use a new sidewalk in front of my house…”

Thus launching the career of what many considered to be the leader of the most corrupt presidential administration our country has yet seen.