Latest Developments in I-9 Compliance: What Every Employer Needs to Know

What Obligations Do Employers Have Relating to Verifying the Employment Eligibility of All Employees

The Immigration Reform and Control Act (IRCA) of 1986 require all U.S. employers to verify the employment eligibility and identity of all employees hired to work in the United States after November 6, 1986. This employment eligibility is verified by completing an Employment Eligibility Verification form (Form I-9). Employers are required to retain I-9s for each employee for three years after the employee's date of hire, or one year after the date that employment is terminated, whichever is later. In the past, employers have been permitted to retain the I-9 in paper, microfilm or microfiche form. Under a recent Department of Homeland Security (DHS) interim rule, employers may now retain I-9 forms in electronic format. The rule also allows for both employer and employee to execute the attestation enclosed on the I-9 through electronic signature technology. According to the interim guidelines, employers have a variety of electronic Form I-9 options. For example, employers may continue to complete Form I-9s on paper, but store the forms electronically. Alternatively, employers may complete and retain the Form I-9s wholly electronically.

In order to properly complete Form I-9, employees must provide, and employers must personally inspect, original documents that attest to the employee's identity and his or her authorization to work in the United States. Employees are required to provide either a document that indicates both identity and work authorization (such as a United States passport, Permanent Residence Card or unexpired Employment Authorization Document), or two documents, one establishing identity (such as a U.S. driver's license) and one establishing employment authorization (such as an unrestricted U.S. Social Security Card). A list of acceptable documents appears on the reverse side of the I-9 form. IRCA contains civil and criminal penalties against employers who hire, or continue to employ, undocumented workers, as well as civil and criminal penalties for I-9 documentation errors, both technical and substantive.

Should Every Employer Perform A Regular Audit of Its I-9 Records to Ensure Compliance with IRCA?

We urge every employer to conduct a regular audit of its I-9 records to ensure that the company is in compliance with the IRCA requirements. I-9 audits can be conducted in house by your own personnel, or a law firm such as Buchanan Ingersoll & Rooney can conduct an I-9 audit on your behalf. For employers who have not been auditing I-9 records on a regular basis, we recommend that the employer have the records audited by a third party that can perform an entire audit of all I-9 records, or do a condensed audit, in which a select number of randomly chosen forms are audited. This will give employers confidence to know whether it is in compliance with IRCA.

If there are problems with the I-9 forms, employers will be advised as to the proper steps to be taken. These steps can help to ensure future compliance, and can also be used as a good faith defense should there be problems. We often hear from employers that the I-9 forms are completed and are in "good shape." Unfortunately, the reality is that few employers are properly completing the forms, and few employers are actually in compliance with the federal regulations. To avoid possible civil and criminal penalties, employers should ensure that the employment eligibility of current and newly-hired employees is verified properly.

What New Laws Have Been Passed That Pertain to Verification of Employment Eligibility?

On January 1, 2007, a Colorado law took effect that requires additional employment verification for any new employee hired in Colorado on or after that date. The law does not apply to employees hired prior to that date.

The law requires Colorado employers to meet the following requirements, in addition to the aforementioned federal I-9 requirements:

1. Maintain copies of eligibility documents

Under federal law, employers are not required to maintain copies of eligibility documents. The new Colorado law, however, requires employers to maintain hard copies or electronic copies of the eligibility documents provided by an employee. Copies of the documents should be retained under the same retention guidelines for the Form I-9 (three years from the date of hire, or one year from the date of termination, whichever is later).

2. Sign an affirmation of legal work status

Within twenty (20) days after hiring a new employee, Colorado employers must complete and sign an "Affirmation of Legal Work Status." The Colorado Department of Labor and Employment (CDLE) have provided a sample Affirmation Form on its website. The form can be downloaded here.

Employers must affirm that they:

Have examined the legal work status of each new employee hired after January 1, 2007.
Have retained file copies of the documents they relied upon to complete the Form I-9.
Have neither altered nor falsified the employer's identification documents.
Have not knowingly hired an unauthorized alien.

The employer must complete and sign the affirmation, in addition to completing the I-9. The affirmation can be kept in either written or electronic form and must be retained for the term of hire of each employee. Colorado employers are urged to complete and retain the Affirmation of Legal Work Status form. The Affirmation of Legal Work Status form should be retained under the same retention guidelines for the Form I-9 (three years from the date of hire, or one year from the date of termination, whichever is later).

3. State penalties for non-compliance

Under HB 1017, CDLE can conduct random audits of employers in Colorado to obtain documentation that they have complied with both the federal and new state requirements. Any employer, who with "reckless disregard," fails to submit the documentation when requested, or submits false or fraudulent documentation, will be subject to a fine of not more than $5,000 for the first offense and not more than $25,000 for any subsequent offense.

What are the main differences in employer responsibility between the federal law and Colorado HB 1017?

1. HB 1017 imposes "reckless disregard" standard for non-compliance

Under the Immigration and Nationality Act of 1952 (INA), an employer is liable for "knowingly" hiring unauthorized aliens, or for continuing to employ such aliens after learning that they are not authorized to work in the United States. Employers (and recruiters and referrers for a fee) must examine eligibility documents and attest that they appear to be genuine and relate to the individual. If a document does not reasonably appear on its face to be genuine and to relate to the person presenting it, the employer may not accept it. The term "knowledge" is construed broadly and includes not only actual knowledge but also "constructive" knowledge, i.e., knowledge that may be reasonably "inferred through notice of certain facts and circumstances which would lead a person, through the exercise of reasonable care, to know about a certain condition."

Under the new law Colorado employers are held to a "reckless disregard" standard, a stricter standard than the federal law. Any employer, who with "reckless disregard," fails to submit the proper eligibility documentation when requested, or submits false or fraudulent documentation, may be subject to state penalties.

2. HB 1017 does not provide a "good faith" defense to employers

In general, an employer is considered to have complied with IRCA requirements if there was a "good faith" attempt to comply. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), which amended some of the provisions of IRCA, also allows an employer a good faith defense when the employer is found to have made technical or procedural errors in preparing or completing Form I-9. IIRIRA requires that if the employer made a good faith attempt to comply, the government must explain the problem to the employer and allow the employer at least 10 business days to correct it. If the employer fails to correct the error, sanctions may be imposed. An employer cannot use a good faith defense if it has engaged in a pattern or practice of violations of this law. Practically speaking, the good faith defense allows employers to accept eligibility documents on their face without explicit verification. However, if a document does not reasonably appear on its face to be genuine and to relate to the person presenting it, the employer may not accept it.

Under the new Colorado law, employers must examine and verify the legal work status of each newly hired employee within twenty days of hire. Unlike under the federal law, documents cannot be accepted simply on their face. CDLE suggests utilizing two free online databases to verify the information provided by an employee, the Social Security Number Verification Service (SSNVS) and the U.S. Citizenship and Immigration Service's "Basic Pilot Program." A more detailed discussion of these services is provided below:

The Social Security Number Verification Service (SSNVS)

(http://www.socialsecurity.gov/employer/ssnv.htm)

The site is maintained by the Social Security Administration. There are two Internet verification options employers can use to verify that employee names and Social Security numbers match Social Security's records. Employers can either verify up to 10 names and SSNs (per screen) online and receive immediate results, or upload batch files of up to 250,000 names and Social Security numbers and receive results the next government business day. Employers need to register to use SSNVS and request an access and activation code. Codes are mailed to the employer approximately two weeks from registration.

If a SSN fails verification, employers should:

Compare the failed SSN to their employment records to make sure there is no typographical error; if there is a typographical error, employers should resend only the correct data, not the entire submission.
If employment records match what was submitted, employers should ask the employee to check his/her Social Security card and inform them of any differences between the employer records and his/her card. If the records and the card match, the employee should check with a local Social Security Office to determine and resolve the issue. Employers should tell employees to inform the employer of any changes and the employment records should be revised accordingly. The Social Security Administration provides a sample letter that employers can provide to an employee. This letter can also be found at http://www.socialsecurity.gov/employer/ssnv.htm under the heading "More Information," "Sample Letter to Give to Employees."
If the employee is unable to provide a valid SSN, employers should document their efforts to obtain the corrected information. This documentation should be retained for a period of three years.

Note: During the verification process and corresponding time limits, the employee is assumed to be work eligible for purposes of state and federal law. The Social Security Administration specifically notes that employers should not use SSNVS to take punitive action against an employee whose name and Social Security number do not match Social Security's records. A mismatch does not make any statement about an employee's immigration status and is not a basis, in and of itself, for taking any adverse action against an employee. Doing so could subject the employer to anti-discrimination or labor law sanctions.

The 'Basic Pilot Program'

The U.S. Citizenship and Immigration Services (USCIS) administer the Basic Pilot Program, which verifies employment eligibility by cross-checking information with the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases. The Internet-based system is available in all 50 states and is free to employers.

The program may only be used to verify the employment eligibility of newly hired employees and cannot be used for pre-employment screening of job applicants! This program should also not be used to verify the employment of current employees.

Under the program, the employer signs a Memorandum of Understanding (MOU) with SSA and DHS that spells out the responsibilities of each party. Employers should carefully read the MOU and understand its terms before registering for the Basic Pilot Program. For example, employers registering for the Basic Pilot Program agree to only accept "List B" documents that contain a photograph. Once the employer completes the Form I-9, the employer logs on to a secure DHS website and enters the employee's information and the documents presented. The information is then transmitted immediately to SSA. If the SSN and the name match SSA records, the employer receives a message within two to three seconds that the employee is authorized to work and the process is finished.

If the SSN and name match, but the SSA cannot verify that the employee is work authorized (i.e., the SSN may have been issued "not for employment purposes"), the employer gets a message that DHS is attempting to verify work authorization. DHS usually responds within 24 hours, but the law gives it three days, since it has to check its records by hand if the automated check does not match the name and immigration document. If DHS finds a match, it tells the employer, and the process is finished.

If the procedures do not provide verification of employment eligibility, the inquiry will result in further instructions to the employer. In some cases, the employer will be directed to contact the DHS to follow alternative verification procedures. In other cases, the employer will receive notification of a "tentative nonconfirmation" of employment eligibility. In that case, the employer asks the employee whether he or she wishes to contest the tentative nonconfirmation. If contested, the employee must contact the SSA or DHS within 8 government working days of notification to resolve any discrepancy in SSA or DHS records. The employer should make a second inquiry using the Basic Pilot procedures 10 government working days after the date of the referral in order to obtain confirmation, or final non-confirmation.

Tentative nonconfirmation does not mean that a person is not authorized to work, and employers cannot treat it as proof that the individual is not employment-authorized. Employers cannot terminate an employee based upon nonconfirmation, until the individual has had time to follow the procedures for correcting any misinformation. The employee must follow the procedures for contesting the nonconfirmation, if he or she desires to continue the employment.

If the employee does not contest a tentative nonconfirmation or the tentative nonconfirmation is not successfully contested, it becomes a final nonconfirmation. The employer may not take adverse action against the employee until there is a final nonconfirmation. Once a final nonconfirmation is issued, the employer may terminate the employee without civil or criminal liability. If the employer does not terminate the employee after a final nonconfirmation, the employer must notify the DHS. If the employer fails to do so, it will be subject to a civil penalty between $500 and $1,000. Keeping a person on payroll that has had a final nonconfirmation creates a rebuttable presumption that the employer is employing an unauthorized individual.

Since each case has its own particular set of facts and circumstances, we strongly recommend that employers seek advice from immigration counsel before terminating any employee.

Practical Tips for Employers

Complete Form I-9 within three days of hire as mandated under federal law. Immediately verify the employee's legal work status using SSNVS. If the employee's SSN cannot be verified through SSNVS, use the Basic Pilot Program to confirm their work authorization status with SSA/DHS. Colorado employers would also be required to complete the Colorado "Attestation Form."
Make a careful, reasoned decision about whether to participate in the SSNVS and/or Basic Pilot Program. Consider carefully the ramifications of the Memorandum of Understanding. Discuss the employer's options with immigration and labor counsel.
Keep a computer "screen shot" of the SSNVS and Basic Pilot verifications to prove that you have properly "verified" employment eligibility. This screen shot should be attached to the I-9 documentation.
Colorado employers would complete the CDLE's sample "Attestation Form."
Maintain the Form I-9, corresponding verification documents, (and, for Colorado employers, the "Attestation Form") securely and separately from the employee's personnel file.

Colorado Employers Have Additional Requirements Relating to Public Contractors

CDLE has reminded employers that House Bill 1343 went into effect on August 7, 2006, and imposes additional verification requirements on state contractors. Specifically, any person or entity who has entered into a public contract for services with the State of Colorado (or any state agency or political subdivision) on or after that date must verify the legal status of all new hires using the Basic Pilot Program. Colorado employers may contact us for additional information regarding HB 1343 and the requirements under the new law.

What Is The Outlook for the Future? Will Additional States Begin to Require Participation in the Basic Pilot Program in Order to Verify Employment Eligibility?

The State of Georgia has mandated that public employers and their contractors who have 500 or more employees must participate in the Basic Pilot Program effective July 1, 2007. Other states, such as Louisiana, Tennessee, and Pennsylvania, have laws prohibiting state contracts to be awarded to employers who knowingly employ an undocumented worker. The growing trend is certainly toward states requiring use of employment verification programs. It is likely that these state laws will be challenged for unlawfully seeking to pre-empt federal law. IRCA specifically prohibits the states from enacting stricter civil or criminal penalties than those adopted by Congress, and immigration has traditionally been strictly a federal matter. Unless these laws are struck down, however, employers doing business in states with state-specific employment eligibility requirements must comply with these laws.

We continue to monitor the status of employment eligibility verification requirements in Colorado and all of the states and will update you with the latest developments. In the meantime, please feel free to contact us with any questions you might have regarding the new requirements or about the I-9 process in general.