Steve Eder, Danielle Ivory and Marcela Valdes
American companies routinely turn to staffing agencies to find workers for warehouses and factories.
Those agencies don’t all play by the rules.
They’ve built an unseen engine of the economy by recruiting and exploiting undocumented migrants.
During the depths of the pandemic, sales at Alo Yoga surged as its popularity exploded on social media. Kendall Jenner appeared on Instagram wearing the brand’s high-waist leggings. Alessandra Ambrosio and Jennifer Lopez were seen in Alo gear, too. In just one year, business reportedly almost doubled, surpassing $1 billion.
Alo’s sister company, Bella+Canvas, a wholesaler of basic apparel, also reached a milestone, selling directly to consumers through its website. To keep up, the two companies turned to a vast new distribution warehouse in Nevada.
Finding workers for such facilities is no small task, but corporate America often looks to a time-tested strategy: contracting with staffing agencies that temporarily employ migrants, including some who enter the country illegally and are desperate for jobs.
This year, America’s southern border was once again a flashpoint in a presidential election, with President-elect Donald J. Trump pledging to deport millions of people who he said were “poisoning the blood” of the country. Within days of his re-election, he announced his intention to appoint hard-liners on immigration.
But despite the tough talk, the broken border has been a lifeline for America’s on-demand economy under both Democratic and Republican administrations, including Mr. Trump’s first term, an investigation by The New York Times found. Thousands of companies have exploited its porousness by plucking workers from the ranks of unauthorized migrants, sometimes with impunity.
Hidden from public view is the middleman role often played by staffing agencies. They recruit workers for warehouses, factories and distribution centers that serve up billions of dollars in goods for brand-name companies.
One of the most notorious agencies, BaronHR, worked with Alo Yoga and Bella+Canvas for years, including at the Nevada warehouse. The reporting shows that the agency’s founder, Luis E. Perez, cast himself as a benefactor for immigrant workers, but in many cases his firms cheated them out of wages and stole their tax payments.
While BaronHR provided jobs to migrants — and employees to companies — it was also an active player on the darker side of the immigration economy. Until the firm collapsed early this year, it was an agent for the exploitation of laborers who were often underpaid and working in unsafe conditions, all while shielding brands from direct responsibility.
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