Increases In Immigration Enforcement And Small Businesses

Immigrants are a vital part of the United States economy, contributing not only to its entrepreneurial efforts and small-business ownership, but also making up a significant portion of workers in key industries and the patrons of local economies.

The Trump administration’s aggressive immigration enforcement — which thus far has included a massive budget expansion of the Department of Homeland Security (DHS) and the detention of nearly 60,000 individuals as of August 14 — has led to instability that is impacting individuals and their employers, many of whom are small businesses. This impact is both “immediate” and “disproportionate”, according to Javier Palomarez, the president and CEO of the United States Hispanic Business Council (USHBC). “From a small-business perspective, as usual, we’re taking the brunt and we’re taking the biggest hit,” he says.

There are several ways in which the recent increase in immigration enforcement could impact your business, even indirectly. Here’s what you should know.

Some legal statuses are expiring, making formerly legal employees “undocumented”

Loren Locke, a business immigration attorney at Locke Immigration Law, LLC, explains that the impact on your workforce is not as simple as whether you employ undocumented workers, defined broadly by Immigrants Rising, an educational nonprofit organization, as employees in the U.S. without legal status. Rather, recent and sweeping re-classifications of humanitarian benefits like temporary protected status (TPS) are leading to overnight changes in the legal statuses of individuals, and consequently massive workforce disruptions for certain small businesses.

As a recent example of this impact, Locke points to nursing homes that employ individuals with TPS from Haiti. On July 1, 2025, the DHS announced that the TPS designation for Haiti would expire on Aug. 3, causing panic among individuals and their families who are impacted by the termination of their status and also their employers. “You can’t really afford to lose them all at once,” Locke says of nurses assistants in these homes. “People could die.”

As of the publication of this article, TPS for Haitian immigrants has been extended to Feb. 3, 2026, after a judge blocked the termination date in a court case on July 15, giving firms and individuals a little more leeway to plan for the expiration. There are nearly 700,000 individuals in the U.S. on temporary protected status (TPS), and over 95% of them are part of the workforce. Of the 15 countries of origin that currently qualify for TPS in the U.S., over half are set to expire before the end of the year.

Your workforce could be impacted even if you’re not the subject of a worksite raid or investigation

The majority of the impact of immigration enforcement on small businesses has been due to raids throughout the communities where workers live, as opposed to specific worksite investigations, according to John Torres, the former deputy director of U.S. Immigration and Customs Enforcement (ICE) and current president of security and technology consulting at Guidepost Solutions, a global business consulting company.

While worksite investigations take a long time to plan and gather evidence for, he says, arrests throughout the community or even rumors of raids can impact who’s showing up to work.

Your customer base may be impacted

The recent increase in immigration enforcement has also led to changes in consumer behavior, even for businesses in communities that have not directly been impacted by arrests or deportations.

“Surrounding areas are feeling the impact and are losing revenue because people are going out less, they’re consuming less,” according to Palomarez, who says even those with legal status, including citizens, are more fearful of going out. “It equates to less foot traffic, less shopping, less eating, less going out, less dining and then and that impact is felt by everyone.”

Stay informed and transparent, and lean on local resources

Regardless of how your business is impacted, it’s important that you don’t interfere with federal operations, advises Palomarez. In general, try to stay informed about any changing policies or laws, especially in your community. For the busy small-business owner, he recommends joining a local or national group that can keep you informed while limiting the research you have to do for yourself.

In addition, Torres recommends implementing a more comprehensive compliance program that goes beyond just I-9 verification. You can lean on local assistance to stay aware of changing laws, and even try to get proper documentation for your employees. This “slow steps” approach can prevent you from having to let go of 20 employees at once, he says. If your employees are at risk of being impacted by fluctuations in legal status, start investing in automation where you can to account for any labor losses.

If you find you have to raise prices to account for workforce reduction or reduced consumer spending, Palomarez recommends keeping in regular and transparent communication with your customers. You may find that “some consumers will be sympathetic and will be understanding and are willing to pay a bit of a higher price because of their devotion and their sympathy to the small business,” he says.

Products like working capital loans or business lines of credit are temporary solutions that can help businesses navigate the fluctuating reality and shifting sentiments toward immigration from the current administration. President Trump has hinted at the possibility of a more streamlined immigration process for workers in certain industries — namely agriculture and hospitality — where the impact of labor losses could be catastrophic.