ICE enforcement actions: How to protect your business when using staffing agencies

With ICE raids on the rise, employers across the country need to be prepared. But what if you don't directly employ your workforce? Today, a significant portion of the U.S. workforce is staffed through temporary agencies, professional employer organizations (PEOs), or staffing agencies. Numerous industries, including hospitality, healthcare, retail, agriculture, and manufacturing, rely heavily on third-party employment solutions to fill labor needs. These arrangements, however, present unique compliance risks that must be considered in advance.  

Who's responsible when ICE comes knocking?

Many business owners mistakenly assume that because workers are hired by or on a staffing agency's payroll, the agency alone - not the client company - bears the risk of employment law issues. That assumption can be a costly mistake. The truth, which many employers learn the hard way, is that the agency and the client company are typically sued under the theory of joint employer liability. If an entity exercises control over a worker - e.g., through supervision, work assignments, training, scheduling, coaching, discipline, or other terms and conditions of employment, they risk being deemed a joint employer under state and federal employment laws. Thus, if an ICE audit or raid reveals unauthorized workers or incomplete documentation, the staffing agency and its client company could face hefty fines, legal consequences, and reputational damage.

How can employers protect themselves?

The first step is to review and strengthen staffing agency contracts. Typically, the staffing agency assumes responsibility for certain things, such as verifying work authorization/I-9 forms, payroll and withholdings, paid sick leave, and benefits. Unfortunately, some companies discover--too late--that their contracts don't spell out which party is responsible for what. Therefore, businesses should proactively review their staffing agency contracts to ensure each party's responsibilities are addressed. Among other things, it's important to ensure that the contract clearly addresses:  

 Which party (typically, the staffing agency) is responsible for I-9 verification and compliance.

 That the staffing agency is the employer of record, not the client business.

 That the parties will indemnify each other for matters that fall within their respective areas of responsibility under the contract.

 That the employer has the right to review I-9 records and audit compliance at any time.

Beyond contracts, businesses should go deeper and ask the right questions before partnering with a staffing agency, such as: 

 How does the agency handle employee onboarding, including I-9 verification?

 Does the agency regularly conduct I-9 audits?  If so, how often, and are they done in conjunction with legal counsel?  

 Who are the agency's points of contact (e.g., Human Resources and outside counsel) on immigration compliance?

 How does the agency maintain I-9 records? Ideally, they are kept separately from personnel files for easy access so an auditor doesn't have access to irrelevant or private employee records.  

 If ICE shows up, who can the company call at the staffing agency for immediate assistance?  

 Does the contract include a duty to cooperate if a legal dispute arises? 

A staffing agency should have ready answers to these questions and should be able to demonstrate their commitment to immigration compliance. If they hesitate or don't have clear processes, that's a red flag.

What can companies do to prepare in advance?  

ICE enforcement actions can happen without warning, and businesses need a response plan  before enforcement occurs. Businesses should coordinate with the staffing agency in advance to establish protocols, including:  

 Self-audit I-9 records and work visas with the guidance of legal counsel 

 Proactively address deficiencies 

 Discuss with the staffing agency how a raid will be handled in real-time 

 Train workers on immigration rights and responsibilities and how to conduct themselves during a raid 

 Create a written Emergency Action Plan (EAP)

 Develop resources for employees, such as referrals to immigration rights groups  

 Determine how to handle public relations issues/media inquiries  

These discussions need to happen before a crisis, not during one.

What does a good staffing partner look like? 

Not all staffing agencies are equipped to handle these complex compliance responsibilities. Some may operate on thin margins, lack a legal team, demonstrate minimal commitment to proactive approaches, or have no audit experience. Others simply go out of business, leaving employers scrambling to access critical records when ICE comes knocking. Employers should be selective when choosing a staffing agency partner. It's worth investing time upfront to ensure the agency is reliable, transparent, and legally compliant. Because if they aren't, the consequences could fall on both of you.

The bottom line

For employers using staffing agencies, compliance isn't just the agency's problem--it's yours too. If an ICE enforcement action occurs, companies that assume their staffing partner handles everything could find themselves in serious legal trouble. The best way to protect your business is to:

 Review staffing agency contracts carefully and revise them as needed.

 Ask tough compliance questions before signing an agreement.

 Establish a response plan for ICE audits and prepare in advance, in collaboration with legal counsel and the agency.

 Ensure I-9 records are accurate, accessible, and legally sound, and proactively correct deficiencies.

By taking these steps now, businesses can significantly reduce the risk of costly penalties, legal issues, reputational damage, and operational disruptions.