Vetting the work force

Complying with immigration laws has become a critical subject. The Department of Homeland Security (DHS) increasingly has focused its immigration enforcement efforts on employers who hire unauthorized workers and during the past months has brought several high-profile enforcement actions against employers alleged to have knowingly employed unauthorized workers. Those actions, coupled with DHS's recent updating of the I-9 form and activity surrounding the no-match letters issued by the Social Security Administration (SSA), should give you reason to take notice.

The requirements

The Immigration Reform and Control Act (IRCA) prohibits employers from hiring or employing non-U.S. citizens who are not authorized to work in the U.S. To that end, IRCA requires employers to verify the identity and employment eligibility of each employee hired by completing the I-9 form and conducting a "reasonable" review of relevant documents.

Given that the I-9 form recently was revamped for the first time in more than 10 years, it is an opportune time to audit your processes and procedures to ensure you are properly using the most updated forms.

As of Dec. 26, 2007, all employers were required to begin using the updated I-9 form, which is available for free at www.uscis.gov. Old forms can be maintained for existing employees (assuming the forms were properly completed), but the new form must be used for anyone hired on or after Dec. 26, 2007. Continued use of the old form will subject you to civil penalties and potentially increased scrutiny from DHS.

Regardless of the version of the form used, the I-9 requirements apply to every employee hired after Nov. 7, 1986. You do not need to complete I-9 forms for independent contractors or individuals employed through a third party (such as leased or temporary employees) provided you do not know such individuals are unauthorized to work. (The mere fact that you don't need an I-9 form does not abrogate your obligation not to knowingly employ unauthorized workers.) Otherwise, all employees should have properly completed I-9 forms in your files.

To avoid potential discrimination issues, never ask an applicant to complete an I-9 form and do not complete the form before an employee's first day of work. Also, do not request or review an applicant's work authorization documents or clarify which documents will be used in the I-9 process. Pre-employment questions should be limited to whether the applicant is authorized to work and/or will require you to be a sponsor for authorization purposes.

Completing the form

Upon hiring a new employee, your obligations begin immediately. Section 1 of the I-9 form must be completed by the employee on his or her first day of work. Section 1 asks for basic information: name, address and Social Security number. You must complete Section 2 of the I-9 form on or before the employee's third day of work. Section 2 requires employers to physically view documents confirming each employee's identity and employment eligibility.

Only certain documents may be accepted for Section 2 purposes. This information was revised on the new I-9 form. Lists A, B and C have been updated to reflect what documents you can accept for verification purposes. (See "Acceptable documents," page 48.)

List A contains documents that are appropriate to verify both identity and work authorization. If an employee presents a document from List A, that is all he or she needs to present. An employee who presents such a document (such as a permanent resident card, or green card) cannot be asked for further documentation.

List B, in contrast, contains documents that verify identity only, and List C contains documents that verify work authorization only. Therefore, they must be presented in tandem. If an employee presents a document from List B, he or she also must present a document from List C and vice versa. If an employee is not able to present a document from Lists B and C or a document from List A, his or her employment must terminate at that time.

When presented with the documents, you must ensure they are originals (not copied, laminated or metal Social Security cards or other documents) and facially valid. However, in lieu of an original document, you may accept a receipt showing a replacement copy of a lost or stolen document has been ordered (a receipt for a pending application is insufficient), and the original must be produced within 90 days.

With respect to facial validity, you are not required to be an expert and you are not obligated to follow up to confirm a document's authenticity. But if you have reason to doubt a document's validity, you must investigate further before accepting the document.

Once satisfied that you have valid documents, complete Section 2 of the I-9 form and record the type of documents presented, document numbers and any expiration dates.

If an employee presents documents that expire, you must reverify the employee's work authorization upon the expiration date. It is your obligation to track and follow up on document expiration dates and terminate employees who cannot present updated, unexpired documents. (This obligation does not apply to expiration dates on documents that do not affect work authorization, such as a U.S. passport, per­manent resident card or identity-only documents.)

You are not obligated to make copies of any documents presented, but if you do, do so for every employee.

An option

In addition to completing I-9 forms, you can enroll in the voluntary E-Verify system sponsored by DHS and the SSA. E-Verify (formerly Basic Pilot) allows employers to electronically compare employees against the millions of records in the SSA and DHS databases. If you enroll in E-Verify, you must use it to verify the work authorization of every new hire with­in the same three-day period that you must complete the I-9 form. E-Verify cannot be used to check current employees' work authorization.

Two states have enacted laws regarding E-Verify.

As of Jan. 1, employers in Arizona must use E-Verify for all new hires. The law has been challenged in court as unconstitutional by several immigration-rights groups, but, as of press time, it remains effective.

Illinois has taken the opposite approach. It passed a law prohibiting employers from enrolling in E-Verify until the DHS and SSA databases can return results that are 99 percent accurate within three days. DHS filed a lawsuit to invalidate the Illinois law (which was set to become effective Jan. 1), and Illinois has agreed not to enforce the law until the case is resolved.

Red flags

All employees' I-9 forms must be pro­cessed in the same manner with the same requirements. You may not lessen the burden for U.S. citizens or limit your work force to U.S. citizens. You also may not discriminate in terms of which documents you require or subject certain employees—such as those with foreign accents or of certain races—to more scrutiny than others.

Once you complete an I-9 form, be sure it is kept for three years after the employee's date of hire or one year after the employee's date of termination, whichever is longer. Although such forms may be kept in your general personnel files, because they are subject to review by various government agencies (who you generally do not want rifling through your files) and because of their unusual retention obligations, we recommend you maintain them in separate confidential files.

I-9 forms can be inspected by the U.S. Department of Labor (DOL) and DHS at any time. No warrant is necessary, but you are entitled to at least three days to produce the forms upon request. For this reason, it is a good idea to clean up any discrepancies before you find yourself with just three days to pull together the forms.

What if you blow it?

If you are found to employ unauthorized workers, you could face civil, criminal and personal penalties.

Civil fines for knowingly employing unauthorized workers can range from $250 to $10,000 per employee. Fines for failing to properly complete, retain and/or make available I-9 forms can be up to $1,000 for each employee for whom an I-9 form is missing or the I-9 requirements are not met (including employees hired after Dec. 26, 2007, on the basis of an old I-9 form).

The fines increase dramatically and the specter of criminal liability looms for repeated or pattern violations.

SSA no-match letters

You may be informed about potentially unauthorized employees through an SSA no-match letter. Generated by the SSA, these letters advise employers that certain employees have W-2 income reported under Social Security numbers that do not match the particular employees. Although the SSA has no enforcement powers per se, it may share information with the Internal Revenue Service and DHS, each of which do have such powers.

Recently, DHS published a final rule detailing how employers must respond to no-match letters. DHS indicates employers who fail to follow the rule risk being found to have knowingly employed unauthorized workers. However, various labor unions, immigration-rights groups and others filed a lawsuit to stop enforcement of DHS's final rule. As a result, the court stayed implementation of the final rule until the case is resolved, and the SSA has temporarily suspended the issuance of no-match letters.

The battle rages on, and it seems certain such letters will be issued again in some form. Smart employers will take advantage of the temporary lull to get their files in order with respect to procedures for responding to such letters if they arrive.

How to respond

Although not official, DHS's final rule would require you to follow a three-step procedure to respond to a no-match letter:

1. Immediately upon receipt, verify the discrepancy in the listed Social Security number is not the result of a typographical, transcription or other clerical error. If it is, you need only report the error to the SSA, and you are done.
2. If the discrepancy is not the result of a clerical error, within 30 days of receipt of the no-match letter, request that the affected employee confirm his or her name and Social Security number are correct in your records. If the employee says there is an error, correct your records; verify the corrected information matches the SSA's records; and record the manner, date and time of your verification, filing such records with the employee's original I-9 form. If the employee says there is no error, tell the employee he or she must resolve the discrepancy with the SSA within 90 days of the date the no-match letter was issued. If the employee returns with corrected information within 90 days, once you verify and record the information, you are done.
3. If the employee cannot verify or correct the matter with the SSA within 90 days, you must, within an additional three days, verify the employee's employment authorization by following a modified I-9 procedure. Under this procedure, you must reverify the employee's work authorization without using documents that contain the Social Security number flagged in the no-match letter and/or documents from List A or List B that do not have a photograph of the employee in question. If the employee is able to reverify under these procedures, you are done; if not, you should consider terminating the employee.

Although these rules are not yet formally in effect, consider following them or some other predetermined, uniform process for responding to no-match letters. Failing to do so—or worse, ignoring the letters—could result in a finding that you had "constructive" knowledge the employee in question was not authorized to work.

The biggest concern with DHS's procedures relates to the implied termination of an employee when the only evidence of unauthorized status lies in a no-match letter. It is clear that at this time the mere issuance of such a letter is not evidence the employee is not authorized to work. Therefore, it is critical you follow the procedures fully and offer the employee every opportunity to correct any errors and/or rectify the situation.

You also must be sure any action you take—whether correcting a typographical error or making a wholesale change in the applicable number—is carried through to all aspects of the individual's employment using such number as a basis.

For example, there may be tax consequences if a person used the wrong Social Security number to report income, or the employee's benefits may be affected by being classified and identified with a new or corrected number. Whatever the case, it is important to follow through with any necessary corrections or consequences.

Do yourself a favor

The information regarding I-9 forms and the formulation of a solid SSA no-match response process should not be new to you. But with immigration being a key issue within DHS, DOL and political campaigns and enforcement efforts keeping immigration in the headlines, you would be wise to revisit the issue.

Closing the first quarter with an audit of your immigration paperwork and processes certainly would be a good way to ensure 2008 is off to a good start and that you save yourself much time and headaches down the road.

Victoria L. Donati and Jason C. Kim are partners in the employment law group of the Chicago-based law firm Neal, Gerber & Eisenberg LLP. Michael F. Hughes is an associate of the same firm.

Acceptable documents

The Department of Homeland Security (DHS) recently changed the requirements for completing an I-9 form. Following are lists of suitable documents an employee can present to prove work authorization. An employee either must produce a document from List A or produce documents from both Lists B and C.

List A

• U.S. passport (expired or unexpired)
• Permanent resident card (green card) or alien registration receipt card (Form I-551)
• Unexpired foreign passport with a temporary I-551 stamp
• Unexpired employment authorization document that contains a photograph (Forms I-766, I-688, I-688A or I-688B)
• Unexpired foreign passport with an unexpired arrival-departure record (Form I-94) bearing the same name as the passport and containing an endorsement of the person's nonimmigrant status if that status allows the person to work

List B

• Driver's license or identification card issued by a state or outlying possession of the U.S. provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address
• Identification card issued by federal, state or local government agencies or entities provided it contains a photograph or information such as name, date of birth, gender, height, eye color and address
• School identification card with a photograph
• Voter registration card
• U.S. military card or draft record
• Military dependent's identification card
• U.S. Coast Guard Merchant Mariner card
• Native American tribal document
• Driver's license issued by a Canadian government authority

List C

• U.S. Social Security card issued by the Social Security Administration (other than a card stating it is not valid for employment)
• Certification of birth abroad issued by the Department of State (Form FS-545 or Form DS-1350)
• Original or certified copy of a birth certificate issued by a state, county, municipal authority or outlying U.S. possession and bearing an official seal
• Native American tribal document
• U.S. citizen identification card (Form I-197)
• Identification card for use of resident citizen in the U.S. (Form I-179)
• Unexpired employment authorization document issued by DHS (other than those in List A)