Update on Employment Eligibility Verification

PROPOSED RULE WOULD REQUIRE ACTION ON SOCIAL SECURITY NO-MATCH LETTERS

When employers send social security information on their employees to the Social Security Administration (SSA) in the form of W-2 earnings reports, SSA confirms that the names and social security numbers match the information in the SSA database. If the name associated with a social security number in the database does not match the name submitted by the employer, the agency notifies the employer of the discrepancy by way of a Social Security No-Match Letter.

Existing law does not provide a clear standard for an employer's responsibility to respond to No-Match Letters, and many employers have failed to respond at all. In an attempt to compel employers to resolve no-match issues, Immigration and Customs Enforcement (ICE) published a proposed regulation in June 2006 setting forth procedures for employers to follow upon receipt of a No-Match Letter. Public comments were accepted through August 14, 2006. A final rule has not yet been issued, and no proposed effective date has been announced. However, publication of the final rule is expected within the next three to six months.

Expanded Definition of "Constructive Knowledge

Under the Immigration and Nationality Act, employers may not "knowingly" hire or employ any individual who does not have authorization to work in the U.S. The term "knowing" is not limited to an employer's actual knowledge of an employee's lack of authorization to work. The government can charge an employer with having "constructive knowledge" of an employee's unauthorized status when the employee's Employment Eligibility Verification Form (I-9) is missing or improperly completed, simply because the employer failed to comply with regulations governing employment eligibility verification.

The proposed regulation, published in June 2006, expands the situations under which an employer will be found to have constructive knowledge. Under the proposed regulation, if an employer receives a Social Security No-Match Letter and fails to take "reasonable steps" within a prescribed period of time, and the employee identified in the letter is found to lack work authorization, the employer will be deemed to have constructive knowledge of the employee's unauthorized status.

Safe Harbor Provision

The Safe Harbor provision describes "reasonable steps" that an employer can take upon receipt of a Social Security No-Match Letter to avoid a finding of constructive knowledge.

Within the first fourteen days after receipt of a No-Match Letter, the employer must take three steps to resolve the discrepancy identified by SSA.

1. First, the employer must check its internal records and transmissions to SSA for clerical errors, such as misspelled names or typographical errors. If clerical errors are discovered, the employer must correct the error, inform SSA of the corrected information, and verify with SSA that the corrected name and/or social security number match the information in SSA's database.

2. If the first step does not resolve the discrepancy, the employer must ask the employee to confirm that the name and social security in the employer's records are correct. If the employee identifies errors, the employer must again correct the records, inform SSA of the corrected information, and verify that the corrected information confirms the employee's eligibility to work.

3. If the employee states that the employer's records are correct, the employer must ask the employee to deal with SSA directly to resolve the discrepancy. The employee must then return to the employer with evidence that the discrepancy has been resolved.

4. If, within 60 days of receipt of the No-Match Letter the employer has not successfully verified with SSA that the employee's name matches a valid social security number, and that the number is valid for work authorization, the employer must complete a new I-9 for the employee within three days. The employer must verify the employee's eligibility for employment just as if the employee was a new hire, with restrictions on the documents that may be presented:

• The employee may not present a document containing the social security number that triggered the No-Match Letter to establish identity or employment authorization.

• The employee may not present a document without a photograph to establish identity.

The employer must examine the new documents presented by the employee and determine whether the documents are genuine and establish that the employee is authorized to work in the U.S. If the employee is unable to present genuine evidence of employment eligibility within 63 days of receipt of the No-Match Letter, the employer is required to terminate the employee.

Between a Rock and a Hard Place: Worksite Enforcement and Discrimination Lawsuits

At this point, the employer may find itself in a very uncomfortable position. If the employee is unable to produce evidence of employment authorization, or the employer doubts the authenticity of the employee's documents, the employer should terminate the employee to avoid a finding of constructive knowledge of the employee's lack of employment authorization. If the employer accepts questionable documents as genuine, or simply decides not to pursue the matter further, the employer may be held liable for employment of unauthorized workers. Under ICE's current worksite enforcement strategy, the individual employer representatives involved in a decision not to terminate may find themselves personally charged with civil and/or criminal violation of immigration laws, as well as a variety of others.

On the other hand, if the employer does go forward with a decision to terminate the employee, the employee may claim to be the victim of discrimination. The employer may be rewarded for its attempts to comply with immigration laws by being the target of charges filed with the Department of Justice's Office of Special Counsel for Immigration Related Unfair Employment Practices.

Whether the final decision is to accept the employee's evidence of work authorization or to terminate the employee for failure to provide such evidence, it is extremely important to establish a set procedure for responding to Social Security No-Match Letters, apply those procedures consistently in every case, and to keep meticulous records on the entire employment eligibility verification process.

For further information on complying with I-9 employment eligibility verification rules, see the article A 'Top Ten' List of Things to Remember For I-9 Compliance.

ELECTRONIC EMPLOYMENT ELIGIBILITY VERIFICATION PROGRAMS

Since announcing its comprehensive immigration enforcement strategy in April 2006, the Department of Homeland Security (DHS) has redoubled its worksite enforcement efforts on several fronts. The recent drastic increase in investigations and raids on worksites has come hand-in-hand with a new push for increased employer cooperation. Employers are being encouraged to sign up for Basic Pilot, a government-operated electronic eligibility verification system. In addition, Immigration and Customs Enforcement (ICE) is campaigning for companies to register for IMAGE, a comprehensive program intended to combat employment of unauthorized workers and the use of fraudulent identity documents. Both Basic Pilot and IMAGE are currently voluntary, although the intention of both DHS and many in Congress is to expand them into a nationwide mandatory employment eligibility verification program.

Basic Pilot, launched in 1997, allows employers to electronically verify employees' authorization to work in the U.S. by checking the employee's information against Social Security Administration (SSA) and DHS databases. Basic Pilot has several weaknesses, including its inability to identify cases of identity theft and the fact that SSA and DHS databases are often inaccurate and outdated. Further, while employers have been told that Basic Pilot only provides information to employers and does not provide information to DHS, USCIS Director Robert Divine announced last year in testimony before the House Small Business Committee that the program is being expanded to allow ICE to launch investigations of potential fraud. President Bush's proposed 2008 budget for DHS, released on February 5, includes $30 million to support and expand Basic Pilot.

The ICE Mutual Agreement Between Government and Employers program (IMAGE) is a program through which government and employers cooperate to reduce unauthorized employment and the use of fraudulent identity documents. Essentially, IMAGE provides ICE with direct access to employer I-9 records in exchange for protection for employers from liability for hiring and employing unauthorized workers.

As part of the IMAGE program, ICE provides training and education on proper hiring procedures, fraudulent document detection, and anti-discrimination procedures. Employers, in return, must adhere to a list of requirements, including the following:

• Register for and use Basic Pilot for all hiring
• Submit to an I-9 audit by ICE
• Verify the social security numbers of their existing labor forces using the Social Security
• Number Verification System (SSNVS)
• Arrange for annual I-9 audits by an external auditing firm or a trained employee not otherwise involved in the I-9 process
• Self-report violations and discovered deficiencies to ICE
• Establish a Tip Line for employees to report activity relating to the employment of unauthorized aliens
• Submit an annual report to ICE which tracks results and assesses the effect of the employer's participation in the IMAGE program.

DHS has marketed both Basic Pilot and IMAGE to employers as a way to avoid raids and other enforcement actions, and to ensure the stability of their workforces. Experiences with Basic Pilot and IMAGE have been varied. While some employers report positive experiences, others have discovered that cooperating with ICE does not guarantee workforce stability.

Swift & Company, a nationwide meat processing company, has participated in Basic Pilot since 1999. In 2002, Swift was the target of discrimination charges filed with the Department of Justice's Office of Special Counsel alleging that it acted too aggressively in verifying the work authorization status of new hires. Four years later, ICE determined that Swift had not been aggressive enough. In December of 2006, ICE raided Swift plants in six states and arrested and detained well over a thousand workers. Swift stands to lose up to $30 million in lost production, recruitment, and training costs.

Smithfield Packing Company of Tarheel, North Carolina, a leading pork producer, registered for IMAGE in June 2006. After Smithfield submitted to the required I-9 audit, ICE followed up by arresting 21 of the company's workers. According to the company, a substantial percentage of its employees are facing termination because of discrepancies on their job applications.

ICE's investigations division has claimed that the upside for participating employers is that "they're better equipped to know whether their workforce is legal, and ICE is less likely to be on their doorstep unexpectedly, interfering with their business." While cooperation with ICE appears to have protected managers and employer representatives involved in the hiring process from liability for employment of unauthorized workers – none at Swift or Smithfield have faced civil or criminal charges – protection from interference with business operations is clearly not guaranteed. Employers should be cautious and examine all benefits and risks of registering for Basic Pilot or IMAGE before agreeing to government scrutiny of I-9 procedures.