You file your W-2 like you would normally. If they've got a Social Security number, and they are fine workers, then most people just tend to look the other way. My dad's company hires illegal immigrants (he doesn't do the actual hiring, but he runs the W-2s), and that's what they do.
I just realizes that my comment makes my dad look like a pimp :)) He's the CFO/co-owner of a construction company/highway contractor, actually. The reason many employers overlook the citizenship of their workers is because they are so hard-pressed for the manpower. They don't check the SS numbers unless they have to, so without any invesitgation, many illegal workers can look legit on paper.
And, in some cases, if you are presented with documents that look nice and legal, you as an employer aren't allowed to go poking around to see if they are nice and legal.
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