Last night, President Obama issued an executive order legalizing the status of five million undocumented immigrants. Now the hard part begins for small business owners and entrepreneurs.

First, you'll need to sort out the many ramifications of the order for your business. Among other things, you'll likely have access to a newly expanded pool of qualified workers. But you might also need to make legitimate the work status of employees you may have thought already passed muster. The action may lead to an increase in employment lawsuits or more union organizing, as well.

Like it or not, the proverbial can of worms is open, says Angelo Paparelli, a partner at law firm Seyfarth Shaw and an expert in immigration law in Los Angeles. "Employers should be alert to the possibility that a new population of workers who may have been silent at the worksite may speak up, and employers will want to generally review their employment practices."

Undocumented Workers

Most pertinent to the broadest set of business owners, the executive order will give a temporary legal status to the parents of U.S. citizens, who have been in the U.S. for five years or more. By some estimates, that faction amounts to as many as 4.1 million people.

Many of these people could soon step forward to claim legitimate work status, which is a good thing. It means they'll be taking a place at the table by paying taxes and contributing to the social security system, among other things.

Still, while the order protects this new class of worker, it may not protect you, whether you've knowingly or unknowingly hired an undocumented worker. If you've made good faith efforts to insure your workers' hiring documents are legal, it's possible you may have more of a buffer than if you've knowingly hired an undocumented worker.

Regardless, you may want to get proactive and conduct an overhaul, which includes: rechecking employees' documents, seeking legal advice and possibly installing greater controls going forward.

"An employer may take this as a signal that perhaps their hiring and screening procedures are not adequate and may undertake a voluntary immigration audit to see if their I-9s are clean," Paparelli says.

The order also brings up a host of other issues for you. Newly legal immigrant workers could now, for example, claim benefits such as inclusion in a 401(k) program, insurance, vacation pay, or even pension benefits, experts say.

You could be exposed in other ways. Once-quiet employees with grievances ranging from harassment to lack of overtime pay may now feel emboldened to step up and get vocal, including taking legal action. Similarly, if you're in an industry where unions play an important role, such workers may now feel free join up.

And if you're thinking of firing an employee who may have misrepresented personal information to get a job, think again. You may not have a legal leg to stand on. Some states, such as California, have passed laws forbidding termination for things like changing personal information, including social security numbers.

One last thing, which highlights the murky areas created by the president's order: The executive order forbids this new class of worker from getting subsidies under the Affordable Care Act. So if you're flirting with that 50 employee or more threshold that would obligate you to provide health insurance for your workers, these employees won't count toward your quota.

"The president's executive order does not extend to Obamacare eligibility in any way," says Charley Moore, founder and chief executive of Rocket Lawyer, an online legal services company. "This admittedly gray area is a prime example of why executive orders of this type are a last resort, since legislation is a far more precise and certain governing method."

Work Visas:

The situation for documented, high-skilled workers is entirely different. Such workers are among the most valuable and sought after around the world, especially since many have come here to get advanced degrees and start businesses. But they've been confronted with an outdated visa system that prevents them getting on a firm citizenship track.

The order will expand the H1B visa program for skilled workers who are applying for green cards. Although the president does not have the power to increase the number of visas issued by the State Department each year, he can accelerate the timing for granting papers to spouses of H1B workers, or their working age children, says Paparelli.

The president could also use his authority to ease the backlog of requests to convert from H1B's temporary worker status to permanent green card status, legal experts say. That, in turn, could also ease the burden of employers sponsoring such workers, who have to go through the expense and administrative headache of resubmitting documentation for H1Bs every year.

And for entrepreneurs like Vishal Sankhla, founder and chief executive of ViralHeat, a social media analytics company in Santa Clara, California, the executive order is a godsend for multiple reasons.

Sankhla himself struggled for 13 years to get a green card, despite founding a fast-growth company with 35 workers, including numerous high-paying jobs for engineers and other professionals. Like a lot of Silicon Valley companies, he also competes for highly skilled workers, many of whom need H1Bs themselves.

"This will allow people who have been to U.S universities to stay for a longer time period, and hopefully obtain a work authorization to continue to stay in the U.S.," Sankhla says. "And this will help us in our business with [employees] who could not get in the H1B lottery last year."

Published on: Nov 21, 2014