LOS ANGELES — Three immigration agents showed up last month at Poindexter Nut Company, which processes walnuts for 300 growers in California’s Central Valley, demanding payroll records to verify whether its employees were authorized to work in the United States.
To comply with federal law, Mike Poindexter began amassing documents to turn over to Immigration and Customs Enforcement. To comply with a new state law, he posted a notice above the time clock informing workers that ICE was auditing their records, a process that could take months.
Immediately, workers began resigning, and Mr. Poindexter signed their last pay checks.
“I am a pawn caught between the federal and state governments, like a child between two fighting parents,” said Mr. Poindexter, the company’s chief executive. “Each is threatening to punish me if I don’t listen.”
The Trump administration is in combat with the nation’s largest and most progressive state, filing a lawsuit against California this week seeking to nullify three state laws that protect undocumented immigrants. On Wednesday, both sides threw gasoline onto their feud, with Attorney General Jeff Sessions denouncing the state’s “open borders radicals” and Gov. Jerry Brown saying the administration was “full of liars.”
The fight has energized partisans on each side. And it has squeezed those in the middle like Mr. Poindexter — the people directly affected by the laws.
Employers are now bearing the brunt of the Trump administration’s wrath against California and illegal immigration more broadly; ICE’s chief, Thomas D. Homan, has vowed more workplace enforcement and warned that the state had better “hold on tight.”
At the same time, those companies now have to follow the state’s Immigrant Worker Protection Act, which took effect Jan. 1. The law prohibits companies from cooperating with ICE without a subpoena, and from letting ICE agents into nonpublic areas.
It also requires them to post notices alerting workers that ICE will be reviewing records — a tip-off to those who may not be legally allowed to work. Any company found violating the law faces fines of $2,000 to $10,000.
Several workplaces visited by ICE have lost workers, or customers, since it began targeting businesses in late January, and before the audits were even completed. Agriculture, a state economic powerhouse, has been especially hard hit.
When Bee Sweet Citrus, a large grower and shipper of oranges, lemons and grapefruit in Fowler, in Central California, plastered on the wall an advisory about ICE’s inspection plans, the company lost some packers, sorters and administrators, one employee said.
“I resigned out of fear,” said the worker, Ana, who asked that her last name be withheld because she is undocumented. She said she hung on until Feb. 16, close to the deadline for the company to submit paperwork to ICE, so she could make another month’s rent. (The company said it was complying with state and federal laws regarding the ICE audit, but declined to comment further.)
Faith in the Valley, an advocacy group based in Fresno, said it has received a spate of calls from workers rattled after seeing the notices about audits. Manuel Cunha, the president of Nisei Farmers League, a growers’ organization, said, “I have never seen workers quit like this before.”
“There is fear and hysteria,” he said.
Rooting out illegal labor is, of course, the main purpose of ICE’s workplace visits, which usually involve inspections of companies’ I-9 forms, the federal document on which employees attest they are citizens or otherwise legal workers. (The California law does not require subpoenas for I-9 inspections.)
California farmers are heavily dependent on immigrant labor, both legal and illegal, and often contend that they have no way of knowing when a worker submits a fake Social Security number on their I-9 forms.
ICE has also stepped up activity in urban areas, conducting sweeps and delivering audit notices to hundreds of businesses in San Francisco, Oakland and Los Angeles.
Reyna Guardado, the owner of El Guanaquito Pupuseria, a restaurant in Riverside County, said that all of her workers are family members with green cards or citizenship. But the moment a pair of agents, donning flak jackets emblazoned with “ICE,” set foot there to serve her an I-9 audit notice, her patrons dispersed. “Everybody knows ICE was here,” she said.
Also in a bind are law enforcement agencies prohibited by another new state law from cooperating with ICE unless the federal agency has a warrant or the case involves a major crime.
Even before the law, many of the state’s largest agencies, like the Los Angeles and San Francisco Police Departments, limited their work with ICE. But agencies in more conservative areas have had to change their practices.
The California State Sheriffs’ Association was one of the most vocal opponents of the law. “What used to happen is that I would hand someone off while they were in custody, ICE would escort them out and they would be gone,” said Sheriff Donny Youngblood of Kern County, who was president of the association last year. “Now we have to turn them loose.”
Last year, before the law took effect, the Orange County Sheriff’s Department turned over about 370 undocumented immigrants from county custody to federal authorities, said Sheriff Sandra Hutchens.
“Now those people are going back into the community,” Sheriff Hutchens said. “We haven’t had any horrible incident that has occurred yet, but when that happens, the community is going to say to me, ‘Why were they released?’”
The Trump administration argues that the state laws shield dangerous criminals from federal law enforcement at the expense of public safety. In his speech Wednesday announcing his lawsuit, Mr. Sessions cited the case of a 34-year-old undocumented immigrant arrested in Ventura County on a charge of sexual abuse of a minor. The man, Jose Vaca, left jail and has disappeared, the Ventura County Sheriff’s Office told local news media, because the new state law forbids jails to turn inmates over to ICE until they have appeared before a judge. Mr. Vaca posted bail and was released before his first court appearance, the sheriff’s office said.
The state’s Democratic leaders have argued that their new law regarding law enforcement cooperation with ICE keeps communities safe by maintaining trust between the police and immigrant residents. After President Trump took office, the police departments in Los Angeles and other American cities said domestic violence reports from the Hispanic community dropped, which they feared was because victims who were undocumented were afraid of coming forward.
The law on employer cooperation helps immigrant workers learn their rights and seek legal help if necessary, its supporters say. “The law works first and foremost to protect Californians’ privacy at the workplace,” said Sarah Lovenheim, a spokeswoman for Xavier Becerra, the Democratic state attorney general. She said she could not divulge whether the office had received any complaints about companies violating the law.
Mr. Poindexter, the walnut processor, said he considers himself fortunate that the audit came after the harvest. But his plant operates year-round, and he is eager for ICE to finish its work so he can replace the lost workers before the fall harvest. “There is no point in hiring people with this cloud hanging over us,” he said.
Some business owners even wondered if California’s attempts to protect undocumented immigrants were having the opposite effect.
“I don’t think the state is helping employers or workers; they are making it worse,” said Karen Musson, who owns Gar Tootelian, a fertilizer retailer that serves 1,500 growers in Fresno County. “We are attracting ICE agents because California drew a line in the sand.”