It sounds like they do have permission, it's just not "official". If the law isn't enforced at all, and breaking it isn't considered a crime and there's no punishment for simply ignoring it, that sounds like tacit approval to me.
The US immigration authorities do occasionally do raids on employers that are known to employ lots of illegal immigrants (which can be people who simply walked over the border, or people who overstayed a visa). It's not unenforced. For people in higher socioeconomic strata that blend into the population better, it's not that well enforced probably because it's just hard to find them, and local law enforcement doesn't deal with it.