But if there were no illegals available wouldn't such a company pay other workers off the books as well in order to reduce costs by not having to pay payroll taxes or benefits?
"wouldn't such a company pay other workers off the books as well "
Yes, in some cases they would. Some do already. But the penalties in paying citizens off the books are severe if the IRS catches you.
What are the EMPLOYER penalties for hiring illegals. Are thay as severe as skirting the tax laws with US citizens?
The latest trend, as told to me by a good friend who is a contractor, is to have a general contractor or architect subcontract to all his employees, via a 1099.
But those subcontractors must still file federal income tax forms. And the contracotrs also file and itemize their 1099's as expenses.
An illegal working off the books does not file an income tax form, has no need to, as he is illegal to begin with. He has no need to itemize his deductions, as his largest expense is health care which is provided free by the local hospitals.
In some cases, employers will provide some sort of minimal housing arrangement for their 'employees'.