4 things for benefits professionals to know about Obama’s executive order on immigration

Through an executive order announced Nov. 20, President Obama took steps to expand resident and employment eligibility for up to 5 million undocumented immigrants currently living in the United States. In a televised address to the nation, the president said his order shields undocumented immigrants from deportation and allows them to live and work temporarily here, so long as they have lived in the U.S. for at least five years, register with appropriate federal agencies, pass a background checks and pay taxes.

Although the action falls short of the wider and more permanent protections immigrant advocacy groups and business leaders would like, most experts agree that the order could make living and working in the U.S. easier for undocumented workers and their potential employers.

After a broad scan of news and analysis on how the president’s order affects employers, here are the top four things we think HR and benefits professionals need to know:

1. Prepare for a potential influx of resumes. The visa proposals for highly skilled workers included in the president’s order would add about 147,000 people to the work force by 2024, according to the White House’s Council of Economic Advisers. In addition to immigrants themselves, the administration is seeking to allow the spouses of workers with H-1B visas to legally work as well. Also, tech companies in particular stand to benefit; one of the proposals would extend beyond 29 months the time that someone with an American science or technology degree could work at a company after graduation.

2. Payroll tax withholding and entitlement administration may be more complicated. Under the president’s order, undocumented immigrants may apply for permits to work legally in the United States—meaning they would be subject to payroll tax withholding for Social Security and Medicare.

This could become sticky for employers as undocumented workers come out of the shadows. Virginia-based attorney Christine Mehfoud told HR Hero that “employers may have an increased number of employees presenting with new identities and wanting to change their name, Social Security number, etc. on file with the employer. This has become a tricky situation for many employers, especially those who have a policy of disciplining employees who provide false information to the employer.”

In addition, employers also would need to appropriately communicate with and oversee employees who become eligible to receive Social Security and/or Medicare benefits if they reach retirement age while still in the country.

3. Health care becomes thornier as well. President Obama was explicit that the order does not allow undocumented immigrants to be eligible to buy or receive subsidies from health insurance exchanges. That means employers who hire them would be exempt from the $3,000 per employee penalty for not providing them health benefits. This move especially angers anti-immigration groups, claiming it gives employers a $3,000 “incentive” to hire an undocumented worker over a native-born American.

4. Be patient, but stay vigilant. Most experts concur that even unchallenged, the president’s order won’t be fully implemented until the first quarter of 2015, at the earliest. It could take a year or more, some say.

Further, employment attorney Charles Gillman told Expert HR, “the devil is in the details,” and noted “there is still a lot of uncertainty as to when these changes will come to fruition.”

In general, though, Gillman said, “It should make it easier to employ foreign nationals and streamline the process. The takeaway is that most observers believe the administration has put itself on a path that should help employers.”