I have personal experience with trying to serve legally non-compliant customers: don’t waste energy convincing them to follow the law - they won’t.

I worked for a company whose reason for existing was because clients needed it to comply with the law.

If you didn’t hire, or employ, someone like us, you were violating the law.

Sales pitch was pretty simple: hire us, or you’re a felon.

It was insanely hard to get people to use our services.

It reached the point where sales gave up on trying to convince people to start following the law, and instead focusing on poaching clients from competitors (that is, folks who had already decided to follow the law).

Best advice is don’t fight them. If they’re not gonna do it, they’re not gonna do it.

Depending on the specifics you either reject them as a client, or accept them and file the appropriate paperwork.