Immigration Law Alert
August 2007
Author:
www.klgates.com
Are the ICE men coming?
Hayes C. Stover
412.355.6476
hayes.stover@klgates.com
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On August 15, 2007, the Bureau of Immigration & Customs Enforcement (“ICE”) of the
Department of Homeland Security (“DHS”) published amended regulations in the Federal
Register at 72 FR 45611. These regulations, first published for comment on June 14, 2006,
impose substantial new obligations upon employers to verify that their employees are legally
entitled to work in the U.S. A failure to follow the procedures set forth in the amended
regulations could result in substantial civil and, possibly, criminal penalties to employers.
The amended regulations become effective September 14, 2007.
Background
Until the Immigration Reform & Control Act (“IRCA”) was enacted in 1986, no federal
law prohibited U.S. employers from employing aliens not authorized to work in the U.S.,
hereafter referred to as illegals. IRCA imposed such a prohibition, and required employers
to verify the work eligibility of all employees through use of the now familiar I‑9 card. The
hope was that by preventing employers from hiring illegals, the magnet of employment
would disappear and the illegals would return home and cease coming.
As anyone who read a newspaper or listened to a television news program knows from the
Congressional debates this year, the number of illegals in the U.S. has substantially risen, not
fallen, since 1986. The I‑9 verification requirements were simply not adequate to achieve
the desired results. The reasons for the inadequacy are many and include innocent but lax
observance by employers, weak enforcement by the government, the desire for cheap labor
by some employers, and the absolute need by employers in certain industries to hire illegals
because of a lack of U.S. employees willing to do the work.
In recent years, ICE has been steadily increasing its efforts to crack down on the employment
of illegals. A series of raids on some large and well known employers resulted in the arrest of
many illegals, and the beginning of civil and criminal proceedings against some employers
and their managers. ICE recognized, however, that sporadic raids against employers would
not itself make a serious dent in the employment of illegals.
With that in mind, the 2006 regulations proposed new self enforcement obligations on
employers. The new regulations rest upon two bases. First, every individual in the U.S.
who is employed is required to have a social security number for tax reporting purposes.
Employers use these numbers when submitting wage, tax, and social security reports to the
government. Unfortunately, the use of false or stolen social security numbers is easy and
rampant. The Social Security Administration (“SSA”) has for many years sent employers
communications when the social security number used for an employee does not match the
information in the system. These “no match” letters were intended to prompt employers
to resolve the discrepancy. However, the obligations and penalties on employers receiving
the no match letters were weak to non-existent. Past no match letters specifically provided
that the letter was not a basis for firing an employee, and that the letter did not mean that
the individual was not authorized to work.
Immigration Law Alert
Second, IRCA and its implementing regulations
prohibit the “knowing” hiring or retention of illegals.
Knowing includes not only actual knowledge but also
“constructive knowledge” that may be fairly inferred
through awareness of facts and circumstances which
would lead a person by use of reasonable care to
know about a situation. 8 C.F.R. § 274a.1(l). Under
pre‑amendment regulations, constructive knowledge
can be inferred from an employer’s failure to comply
with the I‑9 requirements, or by showing that the
employer had available information showing that the
individual was an illegal.
The new regulations marry those two factors by using a
failure to properly respond to the receipt of a no match
letter to create a new basis for inferring constructive
knowledge.
The New Regulations
The new regulations add to § 274a.1(l) by providing
that constructive knowledge may be inferred when an
employer fails to take reasonable steps to verify status
after receiving notice from SSA that reported earnings
on an employee’s name and social security number
fail to match agency records or after receiving notice
from DHS (after DHS has conducted an audit of the
employer’s I‑9s) that the I‑9 supporting documents are
not valid, or were issued to another individual.
The new regulations then proscribe how the employer
can avoid a finding of constructive knowledge based
upon receipt of such a letter, so called “safe harbor”
actions. The regulations provide that the employer
who receives an SSA letter can avoid a constructive
knowledge inference by taking the following steps:
(a) Within 30 days after receipt of the letter, check to see
whether the employer has committed clerical error
and if so, notify SSA with the correct information
and verify with SSA that the new information is
correct. The steps should be noted on the old I‑9 or
on a new I‑9, but the employer should not otherwise
re‑verify the I‑9 information.
(b) If no clerical error is found, the employee must
be asked to verify the information given. If the
employee states that the records are incorrect, the
employer must correct, inform, verify, and make a
record as noted above.
If the employee maintains that the records are correct,
the employee is directed to resolve the discrepancy
with SSA. The employee is to resolve the discrepancy
within 90 days of the date the employer received the
letter.
If the employee is unable to resolve the issue with
SSA within 90 days, the employer must within three
additional days re‑verify employment authorization
by completing a new I‑9. However, in the new I‑9
processing, the employer cannot accept, despite
the document being listed on the I‑9 instructions as
acceptable, any document challenged in a letter from
SSA or DHS, any disputed social security number
or alien registration number, or any receipt for an
application for replacement of a document which
would establish employment authorization or identity.
In addition, any new document presented to establish
identity, or identity and work authorization, must
contain a picture of the employee.
An employer who receives a written notice from DHS
rather than from SSA must contact DHS and attempt
to resolve the questions raised. This step must be
completed within 30 days after receipt of the letter.
If the employer cannot verify with DHS within 90
days of the receipt of the letter that the documentation
questioned by DHS is valid, the employer must
complete a new I‑9 as described above.
In summary, an employer who receives an SSA or a
DHS letter and takes the required steps is protected
against a subsequent inference of constructive
knowledge based upon receipt of the letter. An
employer who does not take the required steps and
continues to employ the employee in question may at
a subsequent time be found to have had constructive
knowledge that the employee is illegal if in fact the
employee is illegal.
Observations and Conclusions
1. Compliance with the safe harbor provisions does
not guarantee that the employer will not be found
to have knowingly employed illegals, but provides
only that receipt of the letter will not be the basis for
inferring constructive knowledge.
2. The new regulations do not require the employer
to fire an employee about whom it receives a letter,
August 2007 | Immigration Law Alert
but continuing to employ the individual without
satisfactorily completing the proscribed steps may
lead to a finding of a knowing employment of an
illegal.
6. If the new regulations cause enough pain, there will
be increased pressure in Congress to address the
current fractured and poorly functioning system for
employing aliens.
3. SSA does not send copies of no match letters to ICE,
but in any subsequent audit by ICE questions about
the possible receipt of a letter will be raised.
7. DHS’s authority to issue the regulations will be
challenged in one or more court proceedings.
4. The regulations are unclear as to whether a letter
received prior to the effective date of the amended
regulations will trigger the obligations.
5. M any employers who cannot find an adequate
number of legal workers will be placed in a position
of either risking a finding of knowingly hiring
illegals, or having an inadequate work force.
8. Illegals who now work “on the books” and pay taxes
may join the underground economy.
9. Employers who terminate an employee based upon
receipt of a letter will be exposed to discrimination
charges and litigation.
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