Multiple Government Agencies Are Now ‘On Patrol' To Police Immigration Compliance

In the wake of 9/11, many Americans expected Congress to implement laws to reduce the number of foreign nationals who would be eligible to come to the United States. Editorial pages and the media air waves were peppered with demands that the United States take swift action to reduce the levels of immigration, both with respect to "green cards" and for those who qualify to work and study in the United States on temporary visas. However, Congress has done very little tinkering with the mechanics of the visa quota and qualification systems. No serious effort has been launched to reduce the number of permanent/immigrant visas available through family or employment-based immigration. Likewise, the long list of visas which authorize foreign nationals to work and study in the United States (E-1, E-2, F-1, H-1B, H-2B, H-3, L-1, O-1, etc.) remains intact, and there are no significant proposals on the horizon that would change the legal standards for these visa categories. There are no indications that the current Congress intends to ‘subtract' from the visas available pursuant to pre-9/11 legislation.

Public perception would suggest otherwise. If you speak with immigrants or company representatives who handle immigration they will invariably provide a long list of examples of how the legal terrain has changed making immigration to the United States more difficult, complicated and uninviting. Although some of these complications are the result of legislative changes (at a federal or state level), the most significant change is simply one of attitude. What federal agencies tolerated in the past, they no longer will accept. Laws which were essentially ignored are now enforced.

Human resources professionals who have long worked on employment-based immigration matters have seen a sharp increase in state and federal administrative vigilance on an increasing basis since late 2001. The Immigration & Naturalization Service (INS) is sporadically, but strategically, enforcing employer sanctions laws which have essentially laid dormant in most parts of the country for the last several years. Employers have seen the Social Security Administration (SSA) act with renewed vigor to weed social security "mismatches" out of the system. Consequently, the threat of sanctions from the Internal Revenue Service (IRS) is real and could be daunting for employers in certain industries. Even the issuance of a state driver's license has become a "hot" topic in immigration law seminars across the country as companies grapple with the increasingly strict state laws that make it more difficult for their foreign workers (and family members) to secure and renew driver's licenses and state identification cards. The auditing power of such agencies as the Office of Special Counsel (OSC) of the Department of Justice and the Wage and Hour Division of the U.S. Department of Labor are also being exercised on a more frequent basis.

It would be a gross overstatement to say that the horrible events of September 11, 2001 brought about these changes. Nothing could be further from the truth. As far back as May 1999, SSA submitted a Management Advisory Report to Congress regarding the use of a Social Security Number (SSN) to commit fraud in the United States. That report identified significant vulnerabilities in SSA's enumeration process that were being exploited by those seeking to work illegally in this country. SSA clamored for the attention and increased support from Congress and the INS in yet another report issued in September 2000. This second, more detailed report called for more heightened scrutiny in the document verification process used to request social security cards and numbers.

Likewise, well in advance of September 11, 2001 many states, including Minnesota, revised their laws and administrative procedures to further restrict eligibility for state issued driver's licenses and identification cards. In Minnesota and many other states, foreign nationals were required (well before September 11, 2001) to present concrete evidence of their identity and immigration status to secure issuance of a driver's license.

The auditing functions of the INS, OSC and DOL have also been propelled by the dramatic changes in the economy. The "implosion" of many companies in the high-tech sector, with consequential layoffs of workers, has led to a sharp increase in the number of complaints filed with federal agencies regarding corporate compliance with H-1B legislation for, among other things, the payment of salaries in compliance with the prevailing wages in the labor market. The terrorist attacks in 2001 did not generate the number of audits or complaints.

But to the extent that 9/11 was not the fuel which "ignited" these examples of increased government vigilance, it has certainly been a high-octane accelerant to bring about an unparalleled "collision" of agency actions that are impacting U.S. employers at an increasing pace. For the most part, the rules and laws are essentially the same today as they were prior to September 11, 2001. But the stakes are higher. The political pressure is greater. And the level of scrutiny continues to rise to unprecedented levels.

INS: SELECTIVE ENFORCEMENT TO SEND A MESSAGE

Some changes in INS investigative and enforcement activity include the following:

I-9 Audits

The number of I-9 audits has progressively decreased over the last decade throughout the United States. The INS increasingly became more selective in who it would audit and which cases it would select to take to an Administrative Law Judge (ALJ) or a U.S. Attorney for the enforcement of sanctions. Despite the well-recognized increase in the number of undocumented workers, I-9 actions became relatively rare for most industries.

For most companies, that remains the state of affairs in the post-9/11 era. However, certain industries and occupational classifications have been heavily targeted by the INS for audits and scrutiny regarding I-9 processes and record keeping. In the wake of 9/11, the INS first targeted airports and companies that employ airport security personnel. I-9 audits have also targeted airlines, overnight courier companies, and other entities whose personnel have access to airports or items that make their way onto aircraft (including food service, packages, etc.). I-9 audits have been pursued in other areas identified as important to national security, including entities engaged in research regarding chemicals and weapons, and critical energy or infrastructure locations.

Employers in industries that fall outside the scope of these high-priority locations cannot, however, become complacent with respect to I-9 compliance. Employers of all sizes and in essentially any industries are susceptible to high-priority I-9 audits for a variety of reasons. For example, the Joint Terrorism Task Force, which encompasses personnel from many federal and state agencies and law enforcement departments (including the INS), is continually identifying individuals for further investigation. Such individuals may be suspected of activities which support terrorism, or may simply be sought for information about particular events or other people. I-9 audits can provide the INS and the Joint Terrorism Task Force with valuable information on foreign nationals who have been targeted for investigation or questioning. A properly completed I-9 record can pinpoint a great deal of information about these individuals relating to specific time frames. The I-9 "links" an individual to particular U.S. and/or foreign documents. Thus, even if the target of the government's investigation used falsified documentation, the INS can obtain document numbers, names, dates and places of birth, SSNs and other information from an I-9 audit that can then be used to accelerate an investigation, allowing government personnel to run further checks and to conduct a more comprehensive comparative analysis with results of other investigative activities. An employer that has failed to meet its I-9 obligations may, therefore, stall or otherwise hinder a government investigation.

Employers, therefore, need to be aware that in many instances the INS may have concerns that go far beyond I-9 paperwork compliance and the eligibility of individual workers to seek employment in the United States. The I-9 process has taken on paramount importance in the post-9/11 era because of its unique ability to provide an excellent "snapshot" of the identity of particular individuals, with a trail of document numbers and names, which can provide investigators with a wealth of information and leads. Just a few years ago there was widespread support in Congress to explore a repeal of I-9 obligations and employer sanctions. Now, there is an unchallenged expectation that runs throughout the federal government that employers must ‘do their part' in this era of Homeland Security by making sure that I-9's are done correctly for all workers.

Getting Serious with the Imposition of Criminal Penalties

Employers who commit violations in the I-9 process or knowingly employ unauthorized foreign workers have, since 1986, been potentially subject to both civil and criminal penalties. These sanctions were created through the passage of the Immigration Reform and Control Act (IRCA) in 1986, but the criminal penalties of the law have only been imposed sporadically in the Upper Midwest region of the United States. However, the INS St. Paul District Office recently sent a strong message to employers in this region of the country that it will not shy away from seeking criminal penalties if employers act with impunity and disregard for the law. As such, in a case brought in a Federal District Court in Minnesota in 2002, a restaurant manager and his eatery were fined over $30,000 for hiring unauthorized workers. This total included a $9,000 fine against the restaurant manager himself under the criminal penalty provisions of the Immigration and Nationality Act. A U.S Magistrate levied the fine based on findings that the manager knowingly hired foreign nationals who lacked authorization to work in the United States. This case moved forward very quickly, with the cooperation of the U.S. Attorney's Office, and was part of the continuing INS investigation at the Minneapolis-St. Paul International Airport. These efforts were replicated in a nationwide push by the INS and other agencies in the wake of 9/11 terrorist attacks to make sure that employees at facilities such as airports, power plants and water-treatment plants have proper authorization to work in the United States. This case emphasized the government's power to impose personal liability on individual managers and executives, with the added threat of imprisonment.

SSA: FEDERAL PROSECUTORS, SSA AND IRS SHAKE THE DUST OFF OLD LAWS FOR A NEW LEVEL OF ENFORCEMENT

On June 25, 2002, the Inspector General for the Social Security Administration (SSA) told a House Judiciary Subcommittee that "the SSN is our national identifier, and protecting the integrity of that identifier is as important to our homeland security as any border patrol or airport screening." The Inspector General, Mr. James G. Huse, Jr., explained that the country's "failure to protect the integrity of SSN's" had caused "enormous financial consequences" for the federal government, states, American businesses and the general public. Citing extensive reports that had been submitted to Congress in 1999 and 2000, but which had essentially been ignored, Mr. Huse confirmed that senior SSA officials "stand ready to do more" in cooperating with Congress, federal prosecutors, other federal agencies and the business community to put an end to the rampant, improper use of SSN's and related problems of integrity in the wage reporting process.

The proportion of employer payrolls which include incorrect or invalid SSN's is growing at an alarming rate. As of July 2002, SSA reported that "suspended" earnings (i.e., wages reported to incorrect or invalid SSN's) exceeded $374 billion. Although that figure encompasses suspended earnings from 1937 through 2000, nearly $50 billion of those wages were posted in the final 12 months before the report was issued, indicating that the problem is becoming more acute. Although there are several reasons for these mistakes, detailed reports issued by the Office of the Inspector General (OIG) and SSA confirm the belief "that illegal work, rather than identity theft, may be the primary cause for suspended wages" for industries throughout the United States.²

Investigations conducted by OIG and the Federal Bureau of Investigation (FBI) determined that several of the 9/11 highjackers used improperly obtained SSN's. Their investigations into the events of that day, and the homeland security efforts at preventing future attacks have confirmed, in the opinion of OIG, "the importance of the SSN to any attempt at assimilation into American society" by those who may plan to do harm to this country and its people. This link between the misuse of SSN's and the most horrifying terrorist attack on American soil will undoubtedly sustain increased government efforts to restore the integrity of the social security enumeration system on many fronts.

Federal Prosecution of Social Security Fraud

The United States Attorneys' Bulletin recently published an article which advocates the use of a long-standing social security fraud statute in the battle against terrorism. Special Assistant U.S. Attorney Mr. John K. Webb admitted in his article that it would seem "unlikely… at first [that] a little-known felony fraud section of the Social Security Act [could emerge] as a highly effective weapon in the domestic war against terrorism." But his extensive article documents how federal authorities have used this statute (42 U.S.C. § 406, 1-189 of the Social Security Act) to charge and detain foreign nationals targeted in the domestic war against terrorism. As such, this law has been identified by United States Attorneys as "an increasingly popular tool for prosecutors" which is "more flexible than other felony statutes," such as the laws pertaining to identify theft.

Special Assistant U.S. Attorney Webb was, in fact, publicizing something that has been well known to prosecutors in the Dakotas and Minnesota for many years, as the social security fraud statutes have been used many times by federal prosecutors in this part of the country to prosecute U.S. citizens and foreign nationals alike, and certainly well before 9/11. However, there is no doubt that most employers, citizens and foreign nationals would be unaware of the potential legal ramifications for misusing a social security card or number. Specifically, under the Social Security Act, a person is subject to criminal penalties if he or she:

• willfully, knowingly, and with an intent to deceive, uses a SSN on the basis of false information furnished to SSA;
• falsely represents, with an intent to deceive, a number to be the SSN assigned to him or her or to another person; or
• knowingly altered a social security card issued by the SSA, bought or sold a card that was, or was purported to be, a card so issued, counterfeited a social security card, or possessed a social security card or counterfeit social security card with an intent to sell or alter it.

42 U.S.C § 408(a)(7)(A)-(C).

An individual who wrongfully uses or misrepresents a SSN can also face criminal penalties under another set of federal laws that make it a criminal offense to make false statements in any matter under the jurisdiction of a federal department or agency of the United States. Thus, the misuse or misrepresentation of a SSN by a foreign worker can easily form the basis of two separate felony charges. At a minimum, these statutes, which according to Mr. Webb's article have rarely been used by United States Attorneys throughout the country, can be extremely effective to validly keep someone in custody who is suspected of terrorism, or having information that may assist in a terrorist investigation. This gives federal authorities more time to gather evidence to determine if more serious charges should be brought.

In the weeks following 9/11, OIG and SSA worked closely on a special task force with the FBI, the INS and other federal agencies to audit the use of SSN's by security badge holders at airports throughout the United States. This investigation resulted in the indictment and arrest of dozens of individuals, primarily foreign-born nationals, employed by private companies operating or providing services at airports. The initial sweep was conducted at the Salt Lake City airport, and the investigation ultimately led to similar actions and arrests in Phoenix, Los Angeles, Miami, Boston, San Diego, Charlotte, Las Vegas and San Francisco. Individual operations have since been conducted in Minnesota and many other states around the country. In all of these operations, the principal charges used to indict those using false identification documents was the social security fraud statute. Clearly, the vast majority of these individuals were never suspected of having any association with terrorism. However, there is every indication that the social security fraud statute will be increasingly used by federal authorities to further protect the integrity of the social security enumeration system and to provide the threat of criminal prosecution to weed out individuals who are not properly authorized to work in the United States. Consequently, an increasing number of industries will be targeted for these types of investigations and prosecutions.

SSA "No-Match Letters" Continue to Identify Fraudulent Numbers in the Work Place

The SSA reviews all employers' W-2 forms and credit social security earnings to workers. If a name or SSN on a W-2 form does not match SSA records, the earnings go into a suspense file, and the agency tries to resolve discrepancies in the following months or years. It has now gotten to the point that SSA is unable to match employee information with SSA records for 6 to 7 million workers each year.

In the past, SSA would only send ‘no-match' letters to employers if records indicated incorrect matches for 10% or more of a company's work force. However, the number of no-match letters went from 40,000 in 2000 to over 800,000 in 2002 as the agency changed its policy to send no-match letters to any employer with one or more indication of a mistake. The no-match letters explain that the employer submitted at least one W-2 form in which a name or SSN did not match SSA records. The letter provides a list of the names and SSN's of all employees whose records do not match, and requests that the employer provide corrected information to SSA within 60 days. The letter cautions employers that these notices do not, by themselves, provide a basis for the employer to take adverse personnel action against the employees and confirm that the no-match letters are not (again, by themselves) an indication that a particular employee is without proper immigration status to work in the United States.

SSA reports that a small percentage of the no-matches result from typographical or other errors that may be due to name changes, compound surnames, etc. However, OIG and SSA officials have concluded that intentional misuse of SSN's by foreign nationals who are not authorized to work in the United States "is a major contributor" to the exponential growth of "suspended" wages. Some immigrant rights groups and union activists have aggressively "lobbied" the business community to do very little in response to receiving SSA no-match letters. However, it is quite clear that employers have a legal obligation under the Internal Revenue Code to report accurate information to SSA and the IRS. As such, once an employer finds that an employee has provided an incorrect SSN (as identified through a SSA no-match letter), the employer should immediately notify the employee and ask that the issue be resolved within a timely fashion. The employer may also have additional legal obligations based on the circumstances. SSA no-match letters do not typically arrive in a ‘vacuum.' Company managers may receive other information which indicates that a particular employee is not authorized to work in the United States (before or after receipt of an SSA no-match letter). The employer may have a legal obligation, after an appropriate investigation, to take further steps to verify the employment eligibility of the individual or even terminate his or her employment. Certainly, employers should not make any immediate employment decision based on receipt of an SSA mismatch letter. But if a subsequent investigation indicates that the employee was unlawfully working in the United States, and the employee has refused to come forward with other acceptable documentation or a reasonable explanation for the mismatch, the employer may have no choice but to terminate the employee, or the employer could face penalties for continuing to employ a foreign national that the company knew or should have known was not authorized to work in the United States.

If the employee merely reported an incorrect SSN, or there was some other discrepancy that can be resolved, the employer must then file a separate W-2C with the IRS for each year the employer reported the incorrect information. It is also advisable for the employer to provide SSA with written notice of all corrections and updates. Finally, the employee should be advised to contact SSA directly to make sure that the individual's benefits and social security entitlements are properly reported and protected.

IRS: Federal Tax Authorities Will Act as the Enforcement Arm of SSA

Many employers have expressed concern that they will be subject to sanctions or penalties by SSA for any failures to properly to respond to no match letters. That concern is valid, but misplaced. SSA has no enforcement authority. SSA is a benefits agency, and was never authorized by Congress to sanction or otherwise penalize even the most egregious offenders of social security laws and regulations. SSA must rely exclusively on the IRS to enforce penalties for inaccurate wage reporting and upon the INS to enforce immigration laws. Prior to 9/11, senior INS officials showed little interest in collaborating with SSA on these issues. Likewise, the IRS was extremely reluctant to devote its resources to seek penalties against employers based on social security no matches. Times have changed.

In Minnesota INS officials have challenged the approvability of applications to secure lawful permanent resident status submitted by individuals suspected of using fraudulent social security cards or numbers. In these cases the INS has alleged that the fraudulent use of social security cards or other immigration documents constitutes a "crime of moral turpitude," which can be used as a legal barrier to adjusting one's status to that of a lawful permanent resident (which most people refer to as a "green card"). Likewise, as discussed above, federal prosecutors across the United States are using charges, or at least the threat of indictments under the social security fraud statutes in immigration-related and criminal proceedings in an increasing number of cases involving foreign nationals.

The IRS has sent more of a mixed message. Senior IRS officials have held planning sessions with SSA to more aggressively use IRS enforcement resources to prosecute and penalize employers, especially those who repeatedly submit erroneous name and/or social security information in wage reports. The IRS has publicly announced that it will begin to assess penalties on employers for social security no match problems. It is possible that any such penalty notices may be restricted to the tax year 2002 and thereafter. According to the IRS, notices of proposed penalties will be issued as of June 2004 for tax year 2002-W2's. However, there are indications of on-going debates within the IRS on how best to proceed. Some IRS officials have suggested that the agency may further delay the issuance of the first penalty notices. There are reports that the IRS plans to institute some level of de minimis exceptions.

Senior SSA officials are insistent that it will be quite easy for SSA and the IRS to identify the highest levels of abuse. For example, in a November 2002 OIG report submitted to the House Representatives, SSA was already able to identify a few dozen employers who were responsible for literally hundreds of thousands of the no match reports. Likewise, SSA will easily be able to identify the employers who have failed to take action to correct no matches from year to year.

Although it is uncertain how aggressive the IRS will be in carrying out its enforcement actions on SSA-related issues, there is no disputing that IRS and SSA are working in closer collaboration than ever before. In addition, there is mounting political pressure in the nation's capital to see the IRS take action in 2004 by issuing proposed penalty notices for employers who consistently submit wage reports with name and SSN errors. Senior OIG and SSA officials have enormous support in the Bush Administration and on key committees in Congress, as they firmly believe applying such penalties will have a swift "ripple effect" on employers. In light of these developments, employers who receive no match letters must document their good faith and diligent efforts to notify employees. Companies can negate IRS liability if they act promptly and take reasonable steps to provide the IRS and SSA with corrected information.

SSA Delay in Issuing SSN's for Foreign Nationals Legally Authorized to Work in the United States

On September 1, 2002 SSA implemented a nationwide policy change for processing SSN applications submitted by all foreign nationals. No laws were passed or amended. As employers and foreign workers have experienced in other administrative settings, SSA has simply chosen to exercise administrative authority which it always had so that further verifications can be conducted before a number is given to a temporary visa holder. In the past, SSA staff would only delay issuance of a social security to complete more labor-intensive "secondary verification" of a nonimmigrant's U.S. immigration status to check suspect documents. With the policy shift, all SSA offices are now required to verify a foreign nationals immigration documents and status with the INS's Systematic Alien Verification for Entitlements (SAVE) information service and data base for processing an application for a SSN or a replacement card. A more rigorous check is required for foreign nationals who were either born in or most recently resided in countries such as Iran, Iraq, Sudan, and Libya.

SSA had resisted completing these types of background checks for foreign workers due to the inability of the SAVE system to provide up-to-date and accurate information. The ‘lag time" between an INS approval and the point at which SSA could verify a person's legitimate work eligibility was deemed as an unjustified penalty to the work-eligible nonimmigrant and his or her employer. However, the concern for fraudulent documentation has risen to such a level that SSA reports explicitly state that the focus of the agency and its field offices must shift from "the traditional emphasis" on customer service to national security. This policy change has had a direct impact on employers and foreign nationals throughout the country, especially in rural and smaller metropolitan areas. Offices outside of major cities appear to have greater difficulties in efficiently verifying a foreign worker's immigration documents and valid status. This results in delays in the issuance of SSN's, complicating the foreign worker's initiation of employment in the United States. Although authorized to work in the United States upon proper admission by the INS, the employee cannot be placed into a company payroll system without a SSN. Likewise, the lack of a SSN makes it essentially impossible to open bank accounts, apply for credit cards, apply for mortgages, secure a driver's license (at least in some states), and otherwise move forward with life in this country.

With the policy change that went into effect as of September 1, 2002 all SSA field offices are required to verify with the INS all immigration documents presented by nonimmigrants who are applying for SSN's. This process is known within SSA as the Total Document Verification program. To reduce the work load for INS and SSA personnel, and to speed up the process of issuing SSN's, the INS is providing SSA electronic access to portions of its data base and systems. Agency officials acknowledge that these verifications have, in some cases, caused lengthy delays in the issuance of SSN's, but insist that such delays are isolated and will not be significant problem as the "bugs' in the SSA-INS procedures are corrected.

In applying for a SSN's, a nonimmigrant/foreign worker applicant completes SSA Form SS-5, Application for a Social Security Card, and presents documents to the SSA that address the following required identifiers:

• Age - a document, at least one year old, which shows name and date of birth or age. [The most common documents for foreign nationals are foreign birth documents, passports or INS records.]
• Identity – a recent document verifies identity (but not a birth certificate). [The most common documents for foreign nationals are passports or INS records.]
• Evidence of work authorized or lawful alien status – an INS document that shows class of admission and eligibility to work. [For most nonimmgrants, this would include INS Form I-94 or Form I-688B, the Employment Authorization Document/Card.]

  Nonimmigrants who are unable to produce their I-94 Card will not be able to secure a SSN. In implementing this new nationwide policy, enormous responsibility is now being placed on SSA field offices, as the agency's internal procedures require field offices to make a determination on whether the documents presented by a nonimmigrant worker appear valid. Individual offices are encouraged to report any individuals or documents which may be "suspect." If the documentation appears valid, SSA must still verify the nonimmgrant's INS documents by submitting a query that will ultimately access the appropriate INS data base. If the query verifies the nonimmigrant's status and there are no discrepancies between the information from the response and the document(s) presented, the SSN application is processed. From that point SSA officials state that the nonimmigrant should receive a social security card within five (5) work days. If the electronic query does not provide confirmation within ten (10) days, there are a series of steps to further identify "suspect" or "fraudulent" cases, thereby putting a stop to the SSN application process.

  Data gathered through an informal survey conducted in September 2002 indicated that SSA field offices were only able to verify nonimmigrant information from the INS for approximately 60 per cent of such applicants within ten (10) days of their nonimmigrant admission into the United States. These findings, along with experiences reported by foreign nationals and payroll administrators across the country, confirm that SSA's emphasis on security has certainly resulted in significant delays in the issuance of SSN's for individuals who have complied with all federal requirements to be lawfully admitted into the country to work on valid visas. It is imperative that foreign workers applying for SSN's or replacement cards take their original documentation with them to verify their age, identity, immigration status and eligibility to work in the United States to avoid further unnecessary delays in the issuance of their SSN and card.

  DMV: STATE MOTOR VEHICLE AGENCIES ENTER THE IMMIGRATION FRAY

  In the 1990's a number of organizations and interest groups called for tighter rules on the issuance of driver's licenses and state-issued identification cards, particularly for foreign nationals. Complaints about the relative ease in securing these documents came from a variety of groups who were motivated by different interests. In general, there was widespread agreement that a state-issued driver's license had become the primary identification document used in connection with financial transactions (including opening accounts), securing employment, and otherwise accessing services and benefits in both the private and public sector. Banks and financial institutions cautioned that the relative ease in securing a driver's license was aiding people who were inclined to engage in fraudulent transactions and identity theft. Federal and state welfare agencies voiced great concern for the integrity of their programs, as there was evidence of people assuming different identities to access benefits in more than one state under different names and addresses. Law enforcement and INS personnel certainly added to the chorus of complaints that lax standards in verifying the name and identity of driver's license applicants thwarted their efforts to track and prosecute foreign nationals engaged in criminal activity.

  For years many states had rules that enabled foreign nationals who had entered the United States illegally (or who overstayed their visa status) to legally apply for and receive driver's licenses without any difficulties or negative repercussions. In addition, the application procedures in many states would make it relatively easy for a person (including U.S. citizens or foreign nationals) to present false documentation to secure a license with an assumed name and identity. As the reported numbers of unauthorized aliens present in the United States increased through the 1990s, anti-immigration groups identified the driver's license (and the ease through which an illegal alien could obtain a valid driver's license) as one of the most important and strong "magnets" sustaining illegal immigrants in the United States. Accordingly, immigration officials, law enforcement departments, and other special interest groups began to lobby state motor vehicle departments and Congress to (a) tighten state rules to make it more difficult for unauthorized aliens to secure valid driver's licenses; (b) implement a uniform system for issuing driver's licenses and identification cards across the country; and (c) limit the validity date of all non-permanent residents' licenses to the same date as the expiration of their nonimmigrant or temporary visa status.

  Catch 22: No SSN, No Driver's License

  In response to heightened security concerns, approximately half the states now require that driver's license applicants present proof that they are lawfully present in the country before the license can be issued. Some of the states that have joined this list in the last year include Louisiana, Ohio, Indiana, and Minnesota. Many states are mandating that all applicants for a driver's license also submit proof of a valid U.S. SSN. This trend has continued despite strong criticism for SSA.

  SSA discourages the use of SSN's by other agencies of the federal and state governments for purposes that are not directly related to work or the receipt of government benefits. For many years, SSA has discouraged states from using SSN requirements for driver's licenses. But the lack of a viable alternative has led to more states utilizing, and in fact requiring, SSN's as part of the licensing.

  At the same time that more and more states have added the SSN requirement for securing a driver's license, SSA has further restricted the issuance of SSN's. There are now very few situations which would allow a foreign national who resides legally in the United States but who is not authorized to work to secure a SSN. SSA believes that the issuance of SSN's to nonimmigrants who lack work authorization leads to SS fraud, unauthorized employment and other illegal activity. Under current SSA guidelines, essentially only those foreign nationals who are legally authorized to work in the United States can secure SSN's.

  These trends have created a number of difficulties for the tens (and perhaps hundreds) of thousands of temporary, nonimmigrant visitors who legally reside in the United States at any given point of time. These legal visitors include spouses and children (up to age 21) of business owners, executives, professionals, and other work-authorized aliens (who may be in the United States working pursuant to, for example, TN, H-1B, H-3, E-1, or other visas); family members of university and graduate school students in the United States (on F-1 visas), and family members of business visitors (on B-1 visas), or non-business visitors and tourists (on B-2 visas, which would include people who come to the United States for medical reasons). Many of these nonimmigrant, temporary visitors are legally authorized to reside in the United States for long periods of time, as their spouses or parents may be able to secure INS approvals and extensions of status to legally work in the United States for one to seven years. Recent legislation allows spouses of some work-authorized foreign nationals to apply for authorization to work in the United States, but these are limited exceptions which apply only to spouses (not children) of L-1, E, and certain J-1 visa holders.

  Despite the financial benefits brought to the U.S. economy by these visitors, SSA, in March 2002, promulgated a change in its rules regarding SSA issuance to legal visitors who lack work authorization. Citing concerns over the fraudulent use of SSN's, SSA changed its rule so that it no longer issues a SSN to a foreign national for purposes of securing a state driver's license.

  The developments in state licensing procedures and SSA policy have, therefore, created significant problems for law-abiding, lawful temporary visa holders. In many states, they cannot get driver's licenses. This hinders commerce in America and is especially frustrating to visitors from countries that do not impose such restrictions on U.S. citizen visitors. Without a social security number, foreign nationals find it difficult or impossible to open bank and other types of accounts, apply for credit cards, and otherwise find secure ways to conduct their affairs in the U.S. These events are viewed with increasing disdain by foreign visitors, especially those from Canada, Australia and Europe who view such administrative changes as ‘bureaucratic overkill,' unjustly inconveniencing America's staunchest allies and friends.

  Foreign nationals who have been caught in the middle of this "collision" of motor vehicle and SSA rules have brought suit to challenge SSA in U.S. District Court for the District of Columbia. (See Iyengar vs. Barnhart, Civil Action No. O-20825.) In this case, several foreign nationals who reside legally in the United States, but who are not eligible to work in this country, are challenging SSA's recent policy decision to no longer issue SSN's to such aliens for purposes of obtaining a state driver's license. This challenge is brought under the Administrative Procedure Act, and is based on the plaintiffs' having their applications for driver's licenses rejected in the States of Illinois and Alabama. Further litigation has been initiated in other jurisdictions. However, several state legislatures are already considering proposals to amend state laws and licensing procedures to make sure that all persons who legally reside in the U.S. are eligible for driver's licenses and state-issued identification cards, even if they are not eligible to receive a SSN.

  Standardization of State Driver's Licenses Succeeding Where the ‘National ID Card' Has Failed

  In the wake of 9/11, there was widespread support for the implementation of a National Identification (ID) Card with the goal of providing extensive personal and biographic information on a single, consistently-produced card for all U.S. citizens and any and all foreign nationals entering the United States. In this country alone, there are over 6,000 versions of birth certificates, more than 200 different and valid forms of state-issued licenses and identification cards, and at least 40 versions of the Social Security card in circulation. There are at least 3 dozen identity and work authorization documents issued by the INS, in addition to a wide variety of foreign documents which provide proof of a person's name, age, and other identification features. There is little doubt that the concept of a National ID Card could garner sufficient support in Congress to become a reality, at least in law. But there also seems to be little doubt that the technology is not available to make it a reality. In addition, many policymakers have questioned whether the cards would do anything to improve national security. The concept of a National ID Card is still very divisive. Interest in the National ID Card has shifted, in large part due to the rapid advancement of technology used in issuing state driver's licenses and identification cards.

  The American Association of Motor Vehicle Administrators (AAMVA) has brought motor vehicle representatives together from around the country to form a Task Force on Identification Security. This Task Force has recommended a number of measures, including the establishment of a set of national, uniform procedures for dealing with driver's license applications submitted by non-citizens. The AAMVA has thrown its support behind U.S. Representative Jeff Flake's proposed legislation, H.R. 4043, that would tie the expiration of a driver's license or state-issued identification card to immigration documents held by non-citizens. The AAMVA takes the position that a driver's license is essentially "the passport" to move about freely within American society. Most state motor vehicle administrators share a deep concern that non-U.S. citizens who obtain a driver's license are essentially facilitated in their effort to remain mobile within U.S. borders long after their authorized stay has expired. The AAMVA is working with Congress to stamp out weaknesses in the driver's license systems though Mr. Flake's bill, which passed the House Subcommittee on Immigration and Claims in 2002. If passed into law, this bill would prevent federal agencies from accepting any state-issued driver's licenses or other identification documents unless the state involved has policies that require those documents to expire upon expiration of the foreign national's valid nonimmigrant visa, as specified on the visa.

  Minnesota is one of several states taking the lead to implement many of the measures recommended by the AAMVA Task Force. In July 2002, the Minnesota Department of Public Safety (DPS) adopted a rule governing proof of identity and residency for driver's licenses and vehicle records. The rule was one of several steps taken by Minnesota DPS to help ensure that individuals who receive state-issued licenses are entitled to receive them and are authorized by immigration authorities to live in the United States.

  Minnesota's driver's license rules now include the following features:

  A person's possession of a valid out-of-state driver's license or identification card will no longer be accepted as stand-alone identification that will permit immediate issuance of a Minnesota driver's license. First-time Minnesota applicants must present a primary and secondary form of identification to verify both identity and immigration/residency status.

  • Foreign nationals who are in the United States on temporary, nonimmigrant visas will have the words "Status Check" stamped onto any driver's license or identification card issued by the State of Minnesota. Their visa expiration date will be included on all state-issued cards, and the validity date for the driver's license or identification card will be the same as the visa or immigration status expiration date.
  • For all foreign nationals who are in the United States on temporary, nonimmigrant visas, they will need to provide proof of extended authorization to remain in the country in order to receive any extensions or further issuance of state-issued cards.
  • As part of the identification process, all applicants must have a full face picture taken. Previous rules provided exceptions to individuals based on religious obligations. These exceptions have now been eliminated. However, the Minnesota rule does not require the complete removal of headwear worn for religious or medical reasons. When necessary, such individuals will be asked to pull the headwear back far enough so as not to obscure the face and so that the photograph will provide a better, unobscured view of the person's head.

The American Civil Liberties Union (ACLU) has charged that the efforts to standardize state driver's license procedures is nothing but a "back door attempt" to institute a National ID card. The ACLU charges that the National ID would do nothing to prevent terrorism, and would only create a more massive bureaucracy that would be prone to errors. However, the main objection of the ACLU and other civil liberty organizations is that the National ID Card would force citizens and legal immigrants to give up privacy.

Polls show that the American public does not stand with the ACLU on this issue. In Minnesota, the new governor, Tim Pawlenty, and the House Republican majority have identified driver's license legislation as a top priority, as the rule implemented in 2002 has yet to be "sealed" with statutory approval.

For employers, the practical impact of these rule changes are as follows:

• Nonimmigrant employees and their families will need to renew their state driver's licenses on a more frequent basis. For example, those authorized to work in the United States in TN status pursuant to the North American Free Agreement (NAFTA) cannot receive authorization to work in increments of more than 12 months. TN workers have always needed to renew their employment authorization with INS on an annual basis. They now must also renew their driver's licenses on an annual basis once they receive INS approval for a new year of work authorization.
• Questions on the legitimacy of identity and other documentation will arise more frequently. Foreign national workers will need to bring more documentation to motor vehicle offices. There are already reports of authentic documentation having been improperly rejected by motor vehicle personnel. For many nonimmigrants, the process to obtain and renew licenses will simply take more time and be subject to more questions. It is advisable for employers to alert their foreign national workers to plan accordingly.
• Opponents of the new licensure rules in Minnesota have expressed concerns that the "Status Check" designation and visa expiration information on licenses could lead to unwarranted questioning, unlawful discrimination or other adverse actions. The rules are simply too new for any reliable information to be published on the validity of these concerns. However, certainly many foreign nationals are concerned that the special designations on their identification documents will unnecessarily stigmatize them.
• The new driver's license rules in Minnesota and any other states which include visa expiration on state-issue documents will undoubtedly impact the I-9 process for employers. The driver's license and state-issued identification cards are among the most common documents presented by new employees when completing the Employment Eligibility Verification (Form I-9). The inclusion of visa expiration information on the driver's license will raise novel issues regarding the acceptability of an expired driver's license as a List B/Identity document for purposes of an I-9 completed by a non-permanent resident. In addition, the information on such a driver's license could impact an INS determination on an employer's actual or constructive knowledge of an employee's lack of eligibility to be employed or continue working. These and other issues (which will involve an interplay between the new format of many state driver's licenses and an employer's obligations with respect to I-9's) have not been addressed by the INS. But these issues will undoubtedly raise some difficult questions for companies as more states incorporate immigration and visa status information on state-issued documents.

OSC AND WHD: GETTING TO KNOW MORE FEDERAL AGENCIES WHO ENFORCE IMMIGRATION LAWS

Most companies that routinely file visa petitions to employ foreign national workers have never had any contact or audits conducted by the Office of Special Counsel (OSC) of the U.S. Department of Justice or the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL). But the Legal Departments of these companies are beginning to see a sharp rise in the number of investigative and audit letters from OSC and WHD.

These federal offices have a number of things in common, but they have very different jurisdictional bounds and purposes. OSC and WHD have the authority to protect the legal interests and wage rates of both U.S. citizen and noncitizen workers. They have subpoena power and the right to access a broad range of employment, personnel, immigration and payroll documents. Both OSC and WHD enforce laws that overlap with enforcement and jurisdictional responsibilities of other federal agencies, such as INS and EEOC. Under the administrative procedures, both OSC and WHD have authority to pursue claims on behalf of aggrieved citizens or foreign workers, but complainants also have the right to proceed with lawsuits if OSC and WHD choose not to proceed with litigation against the employer before an Administrative Law Judge (ALJ).

Another characteristic that is common to both agencies is that they are receiving a greater number of complaints, and are, consequently, proceeding with more investigations, audits and litigated cases than ever before. Despite the similarities referenced above, OSC and WHD have very different legislative mandates.

OSC is the Division of the U.S. Department of Justice that investigates complaints filed under the Unfair Employment Practices (UEP) provisions of the Immigration and Nationality Act (Act). These provisions were implemented as a way to safeguard workers against unlawful discrimination based on national origin or citizenship status. The UEP provisions of the Act "dovetail" with Title VII protections under the jurisdiction of the EEOC. The OSC, for example helps ensure that citizens, lawful permanent residents and certain other work-authorized groups of foreign nationals are not subjected to unlawful discrimination in the I-9 process. OSC has been instrumental in evaluating the legality of ‘U.S. Citizen Only' employment policies (which are typically not legal); and OSC investigates claims of discriminatory preferences based on citizenship status.

WHD comes into play in the immigration context by virtue of its obligation to enforce the Labor Condition Application (LCA) aspects of the H-1B process. In petitioning for an H-1B (professional) worker, all employers are legally obligated to verify the prevailing wage for the offered position pursuant to local labor market standards. The employer must pay the prevailing wage, or the actual wage paid to its workers for that job, whichever is higher. An LCA must be filed with the DOL. Extensive records must kept on the employer's premises. WHD is authorized to audit employers and investigate complaints of noncompliance.

Examples of increases in scrutiny and enforcement actions by OSC and WHD include the following:

• In November, 2002, OSC announced an agreement with Swift & Company, a division of ConAgra, to settle allegations of workplace discrimination in what was purported to be the largest workplace discrimination settlement in a case brought by OSC for Immigration Related Unfair Employment Practices. Swift agreed to pay $174,000 in civil penalties and over $10,000 in back pay. The company also agreed to take part in employment discrimination training for its human resources staff, along with other steps to address the discrimination claims of certain individuals. The settlement was reached after a two-year investigation. The OSC investigation was prompted by a complaint submitted by a U.S. citizen who alleged that Swift had refused to hire her because it incorrectly believed that she was an undocumented worker. The Complaint filed by OSC alleged that Swift had engaged in a pattern or practice of citizenship discrimination and other unfair documentary practices against U.S. citizens and work-authorized foreign nationals who were believed to look or sound "foreign." OSC concluded that such individuals were subject to greater scrutiny during the I-9 employment verification process as compared to individuals who appeared to be U.S. citizens.

  This settlement stands as a strong reminder to employers that they cannot impose a different or higher-level of scrutiny on new employees in the I-9 process simply because a person looks, sounds or otherwise appears to be a foreign national. Likewise, employers are reminded that new employees, whether they are U.S. citizens, lawful permanent residents or foreign nationals here in the United States, have the legal right to choose which documents to present for purposes of completing Section 2 of the I-9. It is unlawful pursuant to the UEP provisions of the Act for employers to demand to specific types of documentation or otherwise restrict what they will accept from the list of acceptable documents specified by the INS on Form I-9.

• WHD announced in December 2002 that it had collected over $175 million in back wages during the course of the year. This was by far the largest amount collected by WHD in 10 years, and constituted a 33 per cent increase from 2001. DOL Secretary Elaine Chao said that these figures "demonstrate a trend of more investigations" in many parts of the country. She added that the DOL and WHD "would like to see that trend repeated in other areas." Thus Secretary Chao committed that more WHD investigators would be inspecting "more work places across the country" so that employers demonstrate an appropriate level of responsibility to their U.S. and foreign national employees.

  The most stunning decision in 2002 came with the ALJ decision in Matters of Wage and Division vs. Mohan Kutty, Nos. 2001-LCA 00010 through 2001-LCA0025 (OALJ October 9, 20002). In this case, the Office of Administrative Law Judges ruled that the employer was liable for back wages to a number of foreign national physicians to the tune of over $1 million, and for civil money penalties of over $100,000. The decision demonstrated that ALJ's will take a very expansive view of the statutes of limitation as applied to LCA audits. In addition, the decision was favorable to workers in the assessment of damages, as costs not directly related to the H-1B petition (namely, J-1 waiver fees) were deemed within WHD's discretion as being considered as "employer expenses." This decision also included an important assessment of whether piercing the corporate veil was warranted in the case (the ALJ ruled that it was). Finally, in applying the standards to decide civil money penalties pursuant to 20 C.F.R. § 655.810, the ALJ concluded that the level of the fine should be $4,000 per violation for willfully failing to pay the required wage; $4,000 per violation for retaliation against employees; and $800 per violation for failing to maintain public access files. The ALJ deemed penalties at these levels as "eminently reasonable" based on the facts of the case.

CONCLUSION

In light of these developments, employers must review their company practices and record-keeping procedures to determine the potential for being caught up in this "collision" of federal and state government action by the INS, IRS, SSA, DMV, OSC, WHD, DOL and/or other agencies. Companies need to make sure that appropriate personnel in their Legal, Human Resources, Payroll and other affected departments are properly educated and trained with respect to the legal issues involved. Responsibilities need to be identified for individual employees in these and other departments, and procedures need to be put in place to make sure that compliance with the different agency mandates can be assured.

There is no question that all of these agencies will continue to exercise an increasing level of scrutiny, with a growing number of investigative actions and audits. Employers who do not review their records and operating procedures in advance (and increase internal scrutiny accordingly) could face potentially serious liability on one or more administrative fronts. Companies that have demonstrated good faith efforts to comply with their obligations for matters under the jurisdiction of these agencies have regularly found that they can avoid the issuance of Notices of Intent to Fine, and any serious liability, by cooperating with investigations, and through negotiated settlements. Proactive measures, instituted in advance of government audits or investigations, have proven themselves to be effective in avoiding undue damage to a company's integrity if and when it might experience a "collision" with one of the multitude of government agencies now "policing" immigration compliance.