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(A revised version of the following article appeared in the National Law Journal in 1995.)
Today, immigration officers arrived at your office and asked to see documents proving that your new employee is authorized to work for you. How closely did you examine the documents that he presented to you, they ask. Didn't you know that you can be fined for filling out the paperwork wrong, they inquire. As investigators demand to review your personnel files and payroll records, you start to wonder about the possibility of large fines and even criminal prosecution. How could it be so wrong to hire the best person for the job?
If the latest rhetoric on Capitol Hill is any indication, both the Congress and President Clinton are intent on bolstering the "employer sanctions" provisions of our immigration laws. When Congress enacted the Immigration Reform and Control Act of 1986 (IRCA), it placed employers in the schizophrenic role as both enforcers and targets of our immigration laws. Employers are charged with the duty of reducing the employment "magnet" for illegal immigrants and are obligated to exercise great caution not to hire an unauthorized worker. At the same time, they may not discriminate against foreign-born job applicants or request that an applicant present a particular work-related document. In short, IRCA's mandate to employers is to make sure that a job applicant is authorized to work before you hire him, but don't ask too many questions least you commit discrimination or document abuse. The real world translation of this mandate is "damned if you do and damned if you don't".
IRCA's employer sanctions provisions have long been criticized, by supporters and detractors alike, not only as ineffective in stemming the tide of illegal immigration, but as a cause of discrimination in the workplace. Yet in today's anti-immigrant atmosphere, leading legislators are looking not to repeal these harsh provisions but to beef them up. Immigration bills now working their way through legislative committees would impose stricter sanctions on employers who hire unauthorized workers. Chief among these legislative proposals is one which would appropriate nearly $100 million annually to the Immigration and Naturalization Service (INS) for enhanced monitoring and enforcement of employer compliance with the immigration laws. This particular bill would add 365 new INS agents to investigate alleged employer sanctions violations, and it would also decrease the number of documents that employers could accept to verify work authorization. The underlying strategy seems to be: Tighten the rules, throw the net wider, hit employers harder, and the pull of the employment magnet for illegal aliens will ultimately diminish. If a few employers get burned in the process, this is a small price to pay to rid the U.S. of illegal immigrants.
The revisiting of employer sanctions comes at a time when immigration has become a hot-button issue. The intersection of immigration law and election rhetoric does not bode well for employers, whose counsel are advised to familiarize themselves with these sections of the immigration laws if their business clients are to avoid its sanctions. Corporate counsel should be prepared for INS audits that may soon come their way. This article provides a starting point for counsel to review their clients' obligations under the immigration laws.
The most obvious way to run afoul of the law is to knowingly hire an unauthorized alien. IRCA's employer sanctions provisions are incorporated into the main body of immigration law -- the Immigration and Nationality Act ("the Act" or "INA") -- at section 274A(a). That section provides that it is unlawful for an employer to hire an "alien" (read "non-citizen") knowing that he or she is not authorized to work for him. To do so is a "knowing" or "substantive" violation of the law.
Nearly ten years after the passage of IRCA, many employers erroneously assume that not knowingly hiring or continuing to employ illegal aliens is the full extent of their immigration obligations. To the contrary, it is unlawful to hire anyone without complying with certain "employment verification procedures." Section 274A(b) directs each employer to verify that every employee hired after November 6, 1986 is authorized to work in the United States. This obligation applies to citizen and alien job applicants alike.
This verification takes place when the employer and employee complete the "Employment Eligibility Form," commonly known as form "I-9". The I-9 serves two functions: First, it allows employers to assist the INS in enforcing the immigration laws. Second, the I-9 may be used as evidence against an employer who fails to properly complete and store the forms, whether or not any of its employees are illegal aliens.
The Immigration Act of 1990 added section 274C which makes it illegal to forge, counterfeit, or alter documents required to prove identity and employment eligibility. Though a full discussion of this topic is beyond the scope of this article, it is mentioned here to further emphasize the need for counsel to be conscious of their clients' growing obligations under the immigration laws.
If it determines that an employer has engaged in a "pattern and practice" of knowing violations, INS is authorized to fine an employer up to $3,000 for each unauthorized alien and impose a prison sentence of up to six months on the employer.
Although INS has made little use of criminal sanctions to enforce IRCA, the agency recently brought felony charges against the owner of a medical clinic in Los Angeles who allegedly had knowingly accepted phony green cards and social security cards for I-9 purposes.
Where large number of workers are involved, these fines can add up quickly. Consider the Georgia peach grower who was fined $1.1 million by INS or the Orange County roofing company who was assessed $1.2 million in 1994.
The focal point of the inquiry is on whether the employer "knowingly" hired or continued to employ unauthorized workers.
INS construes actual knowledge broadly. It can include mere lapses in an employer's attentiveness, such as permitting an employee to work beyond the expiration date of an INS-issued employment authorization document (EAD). Actual knowledge is also deemed to include simple lapses in good judgment, such as when an employer accepts documents of questionable validity in support of form I-9 out of fear that challenging the documents would violate its duty not to discriminate.
An employer is equally liable under the law even though it lacks actual knowledge that an employee is not authorized to work. INS regulations define knowledge to include "constructive knowledge": "knowledge which may fairly be inferred through the notice of certain facts and circumstances which would lead a person, through the exercise of reasonable care, to know about a certain condition." Constructive knowledge may be found, but is not limited to, situations where the employer: (a) fails to complete or improperly completes the I-9, (b) has information available to indicate that the alien did not have authorization to work such as an Application for Alien Labor Certification, or (c) acts with "reckless and wanton disregard" of the law by allowing a third party to introduce an unauthorized alien into the work force. In at least the first two of these three scenarios, it is easy for an employer to commit inadvertent errors -- errors that nonetheless incur penalties.
Case law has roughly defined what is meant by actual or constructive knowledge. In Mester Manufacturing Co. v. INS, 879 F.2d 561 (9th Cir. 1989), an employer was orally notified by the INS that he had accepted fraudulent documentation from several employees in completion of their I-9's. The employer argued that mere oral representations -- even when made by the INS -- should not impute knowledge to the employer. The Ninth Circuit rejected this argument and held that once the employer was made aware of the problems with the employee's documentation, the knowledge requirement was satisfied, regardless of how this knowledge was obtained. Under this reasoning, employers have a duty to inquire further about the validity of the proffered documents, especially when the INS itself notifies them of potential violations.
Sometimes, it is less than clear whether an employer possesses constructive knowledge. In Collins Food International v. INS, 948 F.2d 549 (9th Cir. 1991), the Ninth Circuit overruled the decision of an administrative law judge and held that knowledge will not be imputed to an employer where an unauthorized alien provided documents for an I-9 that appeared to be genuine. The INS contended that the employer should have noticed that the employee's name was misspelled on his social security card, and that if the employer had examined the back side of the card with an example contained in the INS Handbook for Employers, he would have detected that the card was fraudulent. The court, however, cautioned that if such an expansive definition of constructive knowledge were adopted, IRCA's twin goal of deterring discrimination against citizens and authorized aliens would be compromised.
INS regulations are clear, however, that constructive knowledge exists where the employer acts in "a reckless and wanton manner." In United States v. Cafe Camino Real, 2 OCAHO 307 (Mar. 25, 1991), the Chief Administrative Hearing Officer construed the reckless and wanton standard to apply to an employer who failed to make an effort to satisfy itself that an employee was authorized to work. In this instance, the employer hired a worker based upon the representations of a friend, made no effort to verify the employment eligibility of the worker, and did not complete an I-9. The administrative law judge (ALJ) deemed such glaring irresponsibility on the part of the employer to be a knowing violation of IRCA.
Fines can be levied when the employer fails to complete its portion of the I-9 or neglects to confirm that each employee has completed his/her section of the form. Serious fines are often imposed where INS identifies paperwork violations designed to "frustrate" the law -- such as amendments made to an I-9 by an employer after being notified of an I-9 audit by the INS. However, employers have been fined hundreds of thousands of dollars for a few knowing violations accompanied by a large number of paperwork violations, even when most of the paperwork violations pertained to the employment of U.S. citizens.
The employer must physically examine each document presented by the employee to determine whether it appears to relate to the employee, appears to be genuine and is listed on the back of the I-9. However, the employer is not required to be a document expert. Section 274A(a)(3) of the Act merely requires that an employer make a good faith determination that a document is valid.
Employers must walk a very fine line in their examination of documents. An employer can only accept documents from the I-9 list, but may not specify which documents will be acceptable for employment verification. It is only when an employee presents documents not appearing on the list that the employer may ask for additional proof of identity and/or employment authorization. An employer who requests specific documents, such as a drivers license and a social security card, may be charged with document abuse and fined accordingly.
An employer must refrain from overzealous scrutiny of documents. The rejection of a questionable document which later proves to be genuine may result in a violation of the anti-discrimination provisions of IRCA. Also, pursuant to § 274B, an employer who singles out a particular nationality or ethnic group for a higher level of scrutiny will face sanctions under that provision. Citizens and noncitizens must be treated identically in completing the I-9.
After examination of the documents provided by the employee, the employer must complete section two of the I-9, specifying which document or documents an employee provided to show identity and employment eligibility, the issuing authority, document number and expiration date. Documents from List A establish both identity and employment eligibility (e.g., U.S. passports and Alien Registration Cards). If an employee presents a document from List A, the employer should not request to see any documents from List B or C. However, if the employee does not present a document from List A, he must provide the employer with one document from List B and one from List C. List B documents, including drivers licenses and school identification cards, establish identity, but do not demonstrate employment authorization. Conversely, List C documents, such as social security cards, establish employment eligibility but do not prove identity.
Section three of the I-9 should only be completed by employers who are updating and reverifying the employment authorization of an employee whose previous authorization has expired. For example, when an INS-issued work authorization card is scheduled to expire, the employer must examine a document from List A or List C, and complete section three of the I-9. To avoid running afoul of the document abuse provisions of the law, if an employee presents a social security card (a List C document), the employer may not demand to see whether the INS has actually extended the employee's work authorization card (a List A document). Since a social security card does not contain an expiration date, the employer's completion of the reverification section of the I-9 does not conclusively establish that the employee has actually received an extension of his employment authorization.
There is an inherent tension between INS's interpretation of the constructive knowledge requirement and the employer's obligation not to discriminate or commit document abuse. To illustrate, let's assume that an employee holds a temporary work visa for which he was sponsored by the employer. The particular visa is of limited duration and may not be extended. Upon the expiration of the visa, the employer calls in the employee to reverify his employment authorization. The employee presents a social security card, a List C document. Does the employer, knowing that he has not sponsored the worker for an extension of his visa, have an obligation to question the employee further concerning his authorization to work? If he fails to do so, INS may have grounds to claim that he had constructive knowledge of the employees illegality. However, if he does question the employee, he is opening himself up to a discrimination or document abuse charge. After all, the employee may have obtained work authorization through an alternate means.
INS regulations provide that employers must retain every I-9 in its original form or reproduced on microfiche. For large employers hiring hundreds or thousands of employees, the paperwork generated by the employment verification procedures can be quite voluminous; and, in the computer age, microfiche is the technological equivalent to the 8-track tape -- bulky and obsolete. However, since INS regulations are inflexible on this issue, committing I- 9s to CD imaging or utilizing other options made available by current technology could be a costly mistake. Instead, employers should establish a simple, sensible, and reliable office procedure for completion and retention of their I-9 forms.
While no general advice can substitute for specific advice from the employer's legal counsel, the following recommendations are offered to help employers avoid immigration violations:
Be mindful that the employer need not, and probably should not, examine these documents prior to the date of hire. Asking questions concerning the potential employee's age and ethnicity may leave the employer wide open to a charge of discrimination in the event that the candidate is rejected. The Ninth Circuit has held, in Collins Food, supra, that an offer of employment does not constitute a "hire" and therefore does not require employment verification prior to the commencement of employment.
If a supporting document turns out to be fraudulent, the photocopy will establish that the employer examined the document and that it appeared to be genuine on its face. Since an employer is not required to be a document expert, a photocopy helps to establish that the employer examined the document and had no visual cues to doubt the document's authenticity. Photocopying the documentation may help to insulate an employer from sanctions liability.
The employer must examine original or certified, rather than photocopied, documents in completing the I-9. In New El Rey Sausage v. INS, 925 F.2d 1153 (9th Cir. 1991), the Ninth Circuit held that an employer must exercise "due care" in accepting documentation provided by the employee and cannot simply accept the representations of an employee regarding employment eligibility.
Furthermore, the employer should always make a photocopy of the original I-9 and its accompanying documents for its own personnel records, separate from the records it keeps in the event of an INS audit. INS requires inspection of the original documents and is very likely to confiscate the originals in the course of an investigation, leaving the employer and employer's counsel with no records from which to build a defense.
Employers should recall that termination of employment does not necessarily mean that the individual's I-9 may be immediately discarded. Remember the rule: maintain the I-9 for three years after hire or one year after termination, whichever comes later.
While the law permits private entities to reproduce the official form, the reproduction must conform in size, wording and language with the officially printed form. An employer may not reproduce the form on company letterhead or create a "new and improved form" better suited to fit the company's needs. An altered or modified version of the I-9 form is likely to be treated as a violation of IRCA. With respect to employers sanctions, good intentions may be of limited value.
The INS Field Manual for Employer Sanctions sets forth guidelines for targeting employers for I-9 inspections. INS investigators follow leads from various public and private sources. The Department of Labor (DOL) is a favorite INS resource for ferreting out employers of illegal aliens. DOL officers conduct routine inspections for employer compliance with the wage and hour laws. Such inspections often include a cursory review of an employer's I- 9 files. While DOL officers do not cite employers for IRCA violations, they do advise INS of employer missteps. The DOL will also notify the INS of possible IRCA violations upon receipt of an application for alien labor certification, the first step in the process of obtaining permanent residence for a foreign worker, if DOL suspects that the employee is presently working illegally for the sponsoring employer.
INS does not always wait for a lead. INS has implemented a "General Administrative Plan" whereby it draws employers from a national database of several million employers. The Plan targets specific industries with a reputation or history of hiring unauthorized workers (food, textile and garment, in particular), but no company is safe from the provisions of the plan which authorize employers to be selected randomly for audits.
It is not unusual for an INS investigator to initiate an investigation by phone or to simply appear at the employer's office. By asserting its legal right to three days notice, the employer will have the opportunity, as provided by INS regulations, to choose the location of the inspection as well as to review, and even correct, technical mistakes on the I-9's. The correction of mistakes before the actual inspection may permit the employer to mitigate the amount of the fine. However, under no circumstances should an employer destroy an I-9 which has been incorrectly completed or backdate a newly completed I-9.
At the time of the inspection, INS investigators will ask to see the original I-9's and review them for possible violations. If the I-9's are on microfiche, the employer is obligated to provide a microfiche reader-printer at the inspection sight. The investigator's authority is limited to review of the I-9 records. This authority does not permit the investigator to enter a non- public area of a building without either the employer's consent or possession of a valid search warrant. Similarly, an investigator may not speak to the employees on company premises unless the employer consents or he is in possession of a court-issued warrant, subpoena or where "exigent circumstances" exist. (See footnote).
After the inspection, INS will contact the employer if there are discrepancies between INS records and employee documentation. A common scenario is where a green card supporting the I-9 appears to belong to someone other than the employee. Should this happen, the employer should ask the specific employee in question to clarify his or her status in the event that INS is mistaken or request new and different documentation to verify employment eligibility. The employer should be prepared to terminate employment immediately if any employee fails to comply with this request. Otherwise, the employer could be charged with knowingly employing an unauthorized worker.
The NIF will recite all of the facts and alleged violations and set a proposed penalty. Upon service of the NIF, an employer has 30 days to contest the NIF and to ask for a hearing before an Administrative Law Judge (ALJ). An employer's failure to request such a hearing will result in a final order.
If an ALJ rules against an employer, the employer has 45 days to file a petition in the Court of Appeals for the appropriate circuit for review of the order.
Second, the ALJ will look to the good faith of the employer. While good faith cannot itself be defined, it has been held that good faith can be ascertained by analyzing employer conduct on an ad hoc basis. In an IRCA setting, an ALJ may mitigate the amount of the fine where the employer had "honest intentions" of complying with its obligations under the immigration laws, but failed due to inadvertence or understandable error.
Third, an ALJ may consider the gravity of the violation and will often employ a "totality of the circumstances" test to determine the seriousness of the offense. For example, factors such as the ratio of employees to I-9 violations and whether the employer completed the I-9's have been used to determine the seriousness of the violation. In United States v. Raul E. Valladares Jr., 2 OCAHO 316 (Apr. 15, 1994), the employer incorrectly completed seventy- four I-9 records. In response to INS' proposed penalty of $22,050, the ALJ lowered the penalty to $4,500, reasoning that the employer's attempt to complete the I-9s -- even incorrectly -- is less of a violation than a total failure to complete the I-9's.
Fourth, the ALJ will determine whether a particular employer has engaged in previous violations of IRCA. Past failings may lead to a finding of bad faith.
Finally, the ALJ will determine whether a paperwork violation actually involved the hiring of an unauthorized alien. ALJs often are more lenient when the employee who was the subject of the paperwork violation was authorized to work. Where there is no harm, the ALJ is unlikely to call a foul. (See footnote for actual cases lowering penalty amounts.)
Section 274B(a)(3) defines a protected individual as a person who is either a U.S. citizen, lawful permanent resident, temporary resident, refugee, or asylee. The anti-discrimination provisions of IRCA do not protect employees holding temporary working visas or persons lacking employment authorization.
There is a growing body of case law regarding IRCA's anti- discrimination provisions. In one recent case, Yefremov v. NYC Department of Transportation, No. 92B00096 (OCAHO Sept. 21, 1993), a naturalized citizen born in Russia challenged her termination alleging that the employer had discriminated against her because of her status as a naturalized citizen. The employer countered that the employee's performance was unsatisfactory given her inability to speak the English language. Ultimately, the ALJ dismissed the claim, ruling that the employer, a multi-ethnic organization, did not discriminate on the basis of the employee's citizenship status.
Another case involved a law firm's decision not to hire a "foreign lawyer". In Kamal-Griffin v. Curtis, No. _______ (OCAHO Aug. 17, 1993), a law firm required candidates for employment to have exceptional experience, particularly if their education was obtained outside of the United States. The law firm rejected the complainant's application because, as a "foreign lawyer," she did not have the experience necessary for the position. The complainant argued that this treatment constituted discrimination based upon citizenship status. The ALJ, however, rejected her argument, holding that the reference to "foreign lawyer" applied to her background and training, not to her immigration status. The ALJ found he had no authority to determine or "second-guess" an employer's business decision with respect to hiring practices based upon experience.
As these cases illustrate, employers must be especially careful in how they render and phrase hiring and termination decisions. Employers who engage in practices or policies that consider immigration status of the worker may trigger IRCA's anti- discrimination provisions. For example, in the first case to find a "pattern and practice" of discrimination under IRCA, an ALJ held that an employer who discharged a U.S. citizen after she failed to produce a birth certificate violated § 274B. The ALJ found that an employer cannot require an employee to produce more or different documentation than required by the I-9. (See footnote). As a result, the ALJ fined the employer $10,000.00 for document abuse.
The purpose of the anti-discrimination provisions of IRCA is to ensure that employers do not use the I-9 procedures to discriminate against existing or potential employees. Given the often competing expectations of the employer sanctions provisions and the anti- discrimination provisions, it makes good sense for employers to adopt standardized I-9 procedures which apply to all their employees.
In the Immigration Act of 1990, Congress responded by adding section 274C to the law. This section makes it unlawful to:
INS regulations define "document" broadly, so almost any instrument may qualify as a document for purposes of the fraud provisions. A "document" can be an application for immigration benefits or it can be a specific item proving immigration status. Currently, an allegation of document fraud must be examined carefully under the various criminal statutes that define forgery and the other misdeeds designated in the document fraud provisions.
In 1995, the Chief Administrative Hearing Officer (CAHO) issued an important decision on civil document fraud under section 274C. In United States v. Remileh, No. 94C00139 (CAHO Feb. 7, 1995), the INS alleged that an employee presented a fraudulent birth certificate to his employer to satisfy the I-9 requirement. The employer accepted the document and duly completed the I-9. The INS argued that the attestation of an employee to false information on the I-9 constitutes a falsely made document under section 274C. The CAHO disagreed, ruling that it was the underlying document, the birth certificate, and not the I-9 that was the fraudulent document.
However, the 1996 immigration law amended section 274C to provide that making a false statement on an I-9 may trigger the enforcement provisions of that section of law. This change affects employees and employers alike. If the government can prove knowledge of the false statement of the part of the employer, the employer could be liable for sanctions under section 274A and for document abuse under section 274C.
Employers should implement and refine their systems for complying with federal immigration laws just as they routinely comply with other federal laws and regulations. Establishing a program for compliance with IRCA is not unlike the purchase of earthquake insurance: Although you can hope that you will never be audited, it is better to be prepared, just in case the big one hits.
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