IMMIGRATION COMPLIANCE ISSUES Stephen J. Burton Felhaber, Larson, Fenlon & Vogt, P.A. 220 South Sixth Street, Suite 2200 Minneapolis, Minnesota 55402-4504 Telephone: (612) 373-6321 www.felhaber.com Copyright 2008 by Felhaber, Larson, Fenlon and Vogt, P.A. * The material herein is intended for educational purposes only. It does not constitute legal advice.
I. Overview of Immigration Laws Concerning the Hiring Process A. Verification of Identity and Employment Eligibility the Form I-9 Under the Immigration Control and Reform Act of 1986 ( IRCA ), employers (or recruiters or referrers for a fee) have an affirmative duty to ensure that their employees are lawfully present and authorized to work in the United States. An employer violates IRCA if it knowingly hires, recruits, or refers for employment for a fee any unauthorized alien, or hires an individual without complying with the verification system established by the statute. Additionally, it is unlawful for an employer to continue to employ an unauthorized alien after it becomes aware that the employee is or has become unauthorized to work in the U.S. The Form 1-9, Employment Eligibility and Verification Form, is the designated document to use for verification purposes. Employers do not file the Form I-9 with the government; rather, employers must maintain the forms in their own files for three years after the date of hire or one year after the date an employee s employment is terminated, whichever is later. Employers must make the forms available for inspection by U.S. government officials. i. Who Must Fill Out the I-9? Employees, including U.S. citizens, complete Section 1 of the form and employers complete Section 2. Employees provided to the employer by an individual or entity performing contracting services, such as a temp agency, must fill out the I-9 with the contracting party. Employees returning from a temporary layoff, leave, or strike need not complete a new I-9. ii. When Must the I-9 be Completed? Employees must fill out their Form I-9 at the time of hire, defined as the commencement of employment for remuneration. Employees must provide documentation of their authorization to work within three business days of being hired, except for those employees hired for two or fewer business days, who must provide the documentation before the end of the first working day. iii. Employer Review and Verification The Form I-9 requires employers to examine documents verifying the employee s eligibility to work in the U.S., and the person examining the documents must attest that they have done so. The back of the I-9 contains lists of acceptable documents. List A lists documents establishing both identity and employment eligibility, List B contains 1
documents establishing identity, and List C contains documents establishing employment eligibility. The employer may examine one document from List A or two documents, one each from Lists B and C. B. Nondiscrimination i. IRCA Section 1324b of IRCA prohibits employers with four or more employees from discriminating against a protected individual because of the individual s citizenship status. IRCA also prohibits employers with more than three but less than fifteen employees from discriminating on the basis of national origin. 1 Document abuse is probably the most common type of prohibited discrimination. For example, if an employer requests more or different documents than required to establish identity or work eligibility, or refuses to honor documents that reasonably appear on their face to be genuine, it may be treated as an unfair immigration-related employment practice if the employer had the intent to discriminate. The refusal to hire an individual because the documents presented have a future expiration date may also constitute illegal discrimination. Who Is A Protected Individual Under IRCA? A protected individual under IRCA is one who is a citizen or national of the United States, a lawful permanent resident, a lawful temporary resident, a refugee, or an asylee. 8 U.S.C. 1324b(a)(3). IRCA s prohibition against discrimination on the basis of national origin or citizenship does not apply to unauthorized aliens. 8 U.S.C. 1324b(a)(1). An unauthorized alien is an alien who is neither lawfully admitted for permanent residence nor authorized to be employed in the United States. ii. Title VII and Other Antidiscrimination Laws Title VII of the Civil Rights Act of 1964 ( Title VII ) prohibits employers from failing or refusing to hire, discharging, or otherwise discriminating against an individual because of such individual s race, color, religion, sex or national origin. 42 U.S.C. 2000e-2(a). Title VII generally applies to employers who have fifteen or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year. 42 U.S.C. 2000e-2. The EEOC, which enforces several of the federal employment laws including Title VII, has stated that it believes that 1 This is essentially the same four or more employees coverage that applies to citizenship status discrimination, except that IRCA s prohibition against unfair immigration-related employment practices does not apply to national origin discrimination if such discrimination is covered by Title VII. Title VII s prohibitions generally apply to employers who have fifteen or more employees. Hence, with regard to national origin discrimination, IRCA applies to employers with more than three but less than 15 employees. 2
federal law protects all workers from discrimination, whether they are present and working in the United States legally or not. II. Union Exceptions and Employer Obligations A. Collective Bargaining for Responsibility to Complete Forms I-9 USCIS s Handbook for Employers: Instructions for Completing the Form I-9 explains that employers can negotiate their responsibility to complete I-9 forms in a collective bargaining agreement with a union. http://www.uscis.gov/files/nativedocuments/m-274.pdf. As explained below, however, hiring halls are exempt from recruiters/referrers covered by IRCA, and employers will, therefore, remain liable for any violation of immigration laws. Employers who employ employees of another employer s workforce, where both employers belong to the same multi-employer bargaining association, may use the Form I-9 completed by the prior employer if the employee continues to work in the same bargaining unit under the same collective bargaining agreement. The multi-employer association must track an employee s hire and termination dates each time the employee is hired or terminated by an employer in the association. 8 C.F.R. 274a.2(b)(viii)(A). B. Hiring Hall/Referral Systems i. Background In preliminary draft regulations proposed by INS when the Form I-9 requirements were first enacted, employers would have been permitted to rely on union referrals if the unions issued to the employers a Form I-9 certification for such referrals. Under the proposed regulations, union hiring halls would have been required to conduct employment verification and issue Form I-9 certifications as part of the referral process, and to attest that the application had complied with the verification process. Many unions opposed this proposal, however, and the final regulations published in May 1987 exempted union hiring halls from the verification and certification requirements. ii. Hiring Halls Exempt from I-9 Requirements IRCA requires not only employers, but also entities that recruit or refer for a fee to ensure that employees are lawfully present and authorized to work in the United States. The final regulation, now in effect, specifically exempts union hiring halls from the definitions of recruit for a fee and refer for a fee. Thus, it appears that union hiring halls are not liable for employers subsequent employment of undocumented workers, even where the hiring 3
hall referred the worker. (Although unions could still be liable as employers of their own unauthorized workers.) This means that even though employers can negotiate with unions to make the union responsible for ensuring completion of the Form I-9, employers cannot shift the burden of ensuring that their workers are authorized to work in the U.S. to unions. III. Penalties for Violations of IRCA A. Penalties for Knowingly Hiring or Continuing to Employ Unauthorized Workers If the Department of Homeland Security ( DHS ) determines that a company has violated IRCA s requirements by knowingly hiring or continuing to employ aliens not authorized to work in the United States, the following penalties apply: o First offenses: civil fines of $275 to $2,200 for each unauthorized worker; o Second offenses: civil fines of $2,200 to $5,500 for each unauthorized worker; o Subsequent offenses: civil fines of $3,300 to $11,000 for each unauthorized worker. The exact amount assessed depends on several factors, including the size of the employer s business; the employer s good faith, if any; the seriousness of the violation; whether the individual involved was an unauthorized alien; and whether the employer has a history of previous violations. B. Criminal Penalties If an employer has engaged in a pattern or practice of knowingly hiring or continuing to employ unauthorized workers, a criminal penalty is provided of up to a $3,000 fine for each unauthorized worker (in addition to any other civil penalties assessed) plus up to six months imprisonment for the individual officials of the employer who engaged in the overall pattern or practice violation. In addition, the Attorney General may bring a civil action against the employer requesting relief, including a permanent or temporary injunction, restraining order, or other order against the employer. A pattern or practice charge is possible, for example, where DHS has advised an employer of multiple violations of knowingly hiring or continuing to employ unauthorized workers and the employer takes no action. C. Paperwork Violations 4
Technical, or paperwork, violations involve I-9 records. There is a civil penalty of $110 to $1,100 for each paperwork violation. IRCA provides that an employer is considered to have complied with its obligations notwithstanding a technical or procedural failure if there was a good faith attempt to comply. This exemption, however, will not apply if the DHS itself discovers the violation, explains the violation to the employer and gives the employer a 10-day period in which to cure the violation, and the employer does not do so. The good faith exemption also does not protect employers who engage in pattern and practice violations. D. Penalties for Discrimination Employers can be fined (for a first offense) in an amount not less than $275 and not more than $2,200 for each individual discriminated against, and can be fined not less than $110 and not more than $1,100 for each instance that the employer requests more or different documents or refuses to accept documents that appear valid on their face. Employers can be ordered to hire with or without back pay individuals injured by the discrimination. Employers also can be subjected to a cease and desist order to prohibit future discriminatory practices. E. Additional Penalties for Government Contractors An Executive Order issued by the President creates an additional sanction which may be imposed against government contractors who violate IRCA s prohibitions against the knowing employment or continued employment of unauthorized aliens. Such employers could be barred from procuring government contracts for 1 year. IV. Update on DHS s No-Match Safe-Harbor Regulations A. No-Match Letters Every year, employers send information on their employees to the IRS in the form of W-4 forms. When the information submitted by employers does not match government records, the Social Security Administration (SSA) may send a no-match letter advising the employer of the discrepancy. DHS also sends out no-match letters after an audit of the employers I-9 forms, advising employers that an immigration status document or employment authorization document presented or referenced by the employee in completing the Form I- 9 does not match its records. Mismatches can have many causes, including SSN fraud, clerical errors, and unreported name changes. No clear standard has existed for an employer s duty to respond to SSA no-match letters. B. DHS s Regulations 5
In June 2006, the Bureau of Immigration & Customs Enforcement (ICE) agency of DHS published a proposed regulation that set forth procedures for employers to follow upon receipt of a no-match letter from DHS or SSA. The final regulations, which were published in the Federal Register on August 15, 2007 (72 Fed. Reg. 45611), were set to go into effect on September 14, 2007. i. Expanded Definition of Constructive Knowledge The new regulation would make clear that employers cannot disregard or ignore no-match letters issues by SSA or DHS. The regulations expand the situations under which DHS considers an employer to have constructive knowledge that an employee is using a false SSN or is otherwise unauthorized to work in the U.S. The regulation imposes an affirmative obligation on employers to resolve the discrepancy noted in the no-match letters. Under the regulation, if an employer receives a no-match letter and fails to take reasonable steps within a certain time period, and the employee identified in the no-match letter is found to lack work authorization, the employer will be deemed to have constructive knowledge of the employee s unauthorized status. The regulation also would impose significant consequences for employers who choose to disregard no-match letters, including criminal sanctions, civil penalties, and debarment from federal contract. ii. Safe Harbor Procedures To assist employers, the regulation created a six-step safe harbor procedure that employers could follow in their attempt to resolve the discrepancy that resulted in the no-match letter. If an employer adhered to the safe harbor guidelines and it was later determined that the employee who was the subject of the no-match letter was indeed an individual not authorized to work in the U.S., ICE could not use the employer s receipt of a no-match letter as evidence that the employer had constructive knowledge of employing an unauthorized worker. C. What s Happening Now? The final regulation was supposed to take effect on Friday, September 14, 2007. However, on October 10, 2007, the U.S. District Court for the Northern District of California enjoined DHS s enforcement of the rule. In December 2007, the court then granted a stay requested by DHS to suspend the proceedings over the legality of the regulation, so that DHS could conduct additional rulemaking actions to address issues raised by the court when it issued the preliminary injunction. Once DHS revises the rule, it is expected to ask the court to vacate the preliminary injunction 6
A bill introduced on October 23, 2007, by Rep. Tom Tancredo (R-Colo) would implement the DHS s final no-match safe harbor rule. The bill seeks to nullify the decision of the federal district court s grant of preliminary injunction stopping DHS from implementing the regulation. As of January 23, 2008, however, the bill had only six co-sponsors. V. E-Verify Web-Based Verification A. Introduction E-Verify is an Internet based system operated by the Department of Homeland Security in partnership with the Social Security Administration that allows participating employers to electronically verify the employment eligibility of their newly hired employees. E-Verify, which is free to employers, provides an automated link to federal databases to help employers determine the employment eligibility of new hires. E-Verify is different from the Social Security Number Verification System that many employers use to support their payroll system. In order to participate in E-Verify, an employer must enroll and enter into a Memorandum of Understanding with DHS. The enrollment process is completed online. B. The E-Verify Process Employers who participate in the E-Verify Program complete the Form I-9 as usual for each newly hired employee. E-Verify employers may accept any document or combination of documents acceptable on the Form I-9, but if the employee chooses to present a List B and C combination, the List B (identity only) document must have a photograph. After completing the Form I-9 for a new employee, employers using E-Verify submit an electronic query that includes information from Sections 1 and 2 of the Form I-9. After submitting the query, the employer will receive an automated response from the E-Verify system regarding the employment eligibility of the individual. In some cases, E-Verify will provide a response indicating a tentative nonconfirmation of the employee s employment eligibility, which means that the system is unable to instantaneously confirm that employee s eligibility to work. In the case of a tentative nonconfirmation, the employer and employee must both take steps specified by E-Verify in an effort to resolve the status of the query. Employers are also required to follow certain procedures when using E-Verify that were designed to protect employees from unfair employment actions. Employers may not verify selectively and must verify all new hires, both U.S. citizens and non-citizens. Employers may not prescreen applicants for employment; check employees hired before the company became a 7
participant in E-Verify; or reverify employees who have temporary work authorization. Employers may not terminate or take other adverse action against employees based on a tentative nonconfirmation. C. States Laws Concerning E-Verify Legislation went into effect in Arizona on January 1, 2008, requiring all employers to participate in E-Verify, with failure to do so potentially resulting in the loss of the employer s business license. Some states, such as Minnesota and Georgia, require all government contractors and subcontractors to participate in E-Verify. Illinois, on the other hand, passed a law that would effectively prohibit employers in the state from enrolling in the E-Verify program. In September of 2007, DHS sued Illinois and asked a court to declare the new law illegal. The law was scheduled to take effect on January 1, 2008, but Illinois has agreed to not enforce its law until DHS lawsuit is resolved. 8