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A hot political issue is now becoming a legal issue for employers.  Several recent developments put immigration status of employees in the spotlight.  This update will focus on the recent Immigration & Customs Enforcement “no-match letter” regulation and the same agency’s announcement of increased worksite enforcement efforts.

“No-Match” Letter Regulation

For many years, the Social Security Administration has sent “no-match letters” (officially  “Employer Correction Requests”) to employers whose wage reports do not match SSA records in either: name, number or birth date.  The letter specifically stated that the fact of the discrepancy did not mean the employee was not authorized to work and should not be the grounds, in and of itself, to terminate employment.

However, the immigration enforcement consequences of receiving such a letter were less clear.  Immigration & Customs Enforcement (“ICE”) gave no clear guidance to employers as to their obligation under the employment verification system when these letters were received.  Employers also must comply with the anti-discrimination provisions that are part of the same law that requires employers to check authority to work (the Immigration Reform & Control Act of 1986).  Thus, employers were wary of asking for additional or different documents to resolve the discrepancy; as such request could be considered “document discrimination.”

On August 15, 2007, ICE published a final rule to address these concerns.  See 72 Fed. Reg. 45612.  This regulation claims to give employers a “safe harbor” if they comply with the steps outlined in it when a no-match letter is received.  Employers are advised to follow the safe harbor procedures set forth below, but should also realize the limited utility of the rule in that it is very narrowly drafted and does not in any way exempt the employer from liability if it has actual knowledge or constructive knowledge, determined by other facts and circumstances, that it is employing an unauthorized worker.

What the regulation actually does is amend and clarify the definition of “constructive knowledge” for the purposes of determining whether an employer “knowingly” employed an unauthorized worker.  Often it is very difficult for ICE to prove “actual knowledge”, e.g. obtain a tape recording of a conversation admitting as much or some other incriminating evidence.

Therefore, the regulations also allow ICE to levy fines or bring criminal charges based on “constructive knowledge”.  This is defined as “knowledge that may fairly be inferred through notice of certain facts and circumstances that would lead a person, through the exercise of reasonable care, to know about a certain condition.”  See 8 C.F.R. §274a.1(l).

The regulations provide examples of when an employer would have constructive knowledge.  One of these examples is that the employer “[f]ails to take reasonable steps after receiving information indicating that the employee may be an alien who is not employment authorized.”  See 8 C.F.R. §274a.1(l)(1)(iii).  An example of such information was added to include:  “Written notice to the employer from the Social Security Administration reporting earnings on a Form W-2 that employees’ name and corresponding social security account numbers fail to match Social Security Administration records.”  See subsection (B).

The Safe Harbor Procedures

Although identifying the receipt of a no-match letter as proof of constructive knowledge, the rule then states that if the employer takes “reasonable steps” after receiving such a letter, the receipt of the letter alone will no longer be considered constructive knowledge.  This is the “safe harbor” provision.

To take “reasonable steps,” the employer must do the following:

 (A) Check its records to determine if the discrepancy is the result of a clerical error on the employer’s part.  If so, the employer must within 30 days of receipt of the letter (1) inform SSA of the corrected information, (2) verify with SSA that the corrected information matches its records, and (3) make a record of the manner, date and time of such verification, and store this record with the employee’s I-9 form (since SSA will not make such a record).  The employer may update the existing I-9 form or complete a new form, but should not perform a new I-9 verification.

 (B) If the discrepancy does not appear to be a clerical error, the employer must notify the employee to correct his/her records with SSA.  If the employee informs the employer that its records are incorrect, then the employer must perform the steps listed in (A) above.

If the employer’s information is correct according to the employee, then the employer must (1) notify the employee of the date the letter was received and that he/she must resolve the discrepancy with SSA within 90 days of that date, and (2) check SSA records by the 90th day to see if the name and account number now match. 

If the discrepancy has not been corrected within 90 days of the date of receipt of the letter, the employer must re-verify the employee as follows:

  (a) The employer must complete a new I-9 form for the employee within 93 days of receipt of the letter (i.e., the employee has 90 days to fix the problem and if not fixed, the employer must re-verify within 3 days).

  (b) The employer may not accept a social security card or any other document that contains the disputed social security number, or a receipt for a replacement document.

  (c) The employee must present a document containing a photograph to satisfy the I-9 verification requirements (i.e., to establish identity or to establish both identity and work authorization).

  (d)  The employer must retain the I-9 in accordance with the usual retention rules.  Note that when completing the I-9, the date employment commenced should be indicated as the date the employee first began working for the employer, and this would be the date to key the retention requirement (i.e., 3 years from date of commencement of employment or one year from date of termination, whichever is longer).

Other Examples of Constructive Knowledge

In addition to the receipt of a no-match letter, the regulation also points to receipt of written notice from Department of Homeland Security that the document used for I-9 verification belongs to someone else or has not been assigned to a person as grounds for a finding of constructive knowledge.  The steps the employer is to take in this situation are the same as outlined above, but with reference to DHS rather than SSA.

The final example of constructive knowledge is when the employee requests employer sponsorship for labor certification (the “PERM” process) or an employment-based visa application.  We assume this would be constructive knowledge only if the employee is not currently in a valid temporary work-authorized status, although the regulation is silent on this point.  In this situation, no remedial steps are possible.

Implementation & Practical Tips

The new rules will become effective September 14, 2007.  We understand that SSA is expecting to start sending no-match letters referencing the new rule during the first week of September.  Because the rule does not addresss retroactivity, we advise employers to comply with the new procedure for letters received prior to September 14 if they have not been resolved by that date.

Note that this rule applies only to receipt of the no-match letter or written notice from DHS.  It does not apply to discrepancies discovered from use of Basic Pilot or other electronic verification systems.

Because there will be no official “receipt date” for the letter (it will be dated the day it is generated), employers should be sure to date-stamp the letter when it reaches the worksite.  The preamble specifically rejected beginning the count from the date the appropriate employer representative receives the letter.  Also employers should save the envelope to show postmark.

We also suggest adopting a standard procedure for handling no-match letters, including preparing form letters now so that precious time is not lost in complying with the safe harbor provisions.  We have provided sample letters attached to this update.

Note that we have already heard of ICE contacting employers who have filed labor certifications (PERMs) for employees apparently not authorized to work.  The Department of Labor is authorized to contact ICE in this situation and is already doing so.

Enforcement Consequences

The preamble to the rule is careful to state that nothing in the rule requires termination of employment.  However, if the employer either fails to follow the safe harbor procedure, or fails to terminate the employment if the procedure does not end in resolution of the discrepancy or a successful new verification, the employer risks enforcement consequences if the employee turns out to not be authorized to work.  Consequences include fines and possible criminal penalties.  Note that ICE and U.S. attorneys are more frequently charging employers with criminal violations such as harboring as fines are now considered to be ineffective.  See ICE’s website, www.ice.gov and the discussion below regarding stepped-up enforcement announced by ICE.

The rule also states that if the employer follows the safe harbor procedure for all employees, then these actions will not be considered discriminatory.  The rules does not allow employers to request more or different documents than required for the I-9 (except as specifically stated), or to refuse to accept documents that appear to be genuine on their face.  Note, however, that ICE is not the agency enforcing the anti-discrimination provisions of the employment verification law.  This duty falls to the Office of Special Counsel, which still may investigate charges of discrimination despite ICE’s statements in its rule.

Following the safe harbor provisions is not the only way that an employer could take reasonable steps to ascertain whether an employee is authorized to work.  ICE will take into consideration all of the facts and circumstances surrounding the situation to determine employer liability.  However, in most cases it will be advisable to follow the steps indicated in the rule.

Resources

Employers wishing to verify social security numbers may access SSA’s verification system at http://www.ssa.gov/employer/ssnv.htm

U.S. Citizenship & Immigration Service maintains a database for verification of documents (the Systematic Alien Verification for Entitlements or SAVE program) at https://www.vis-dhs.com/EmployerRegistration

ICE will work with employers to audit your workforce and then sign you up for the Basic Pilot Program to check new employees (the IMAGE program).  Information is available at http://www.ice.gov/partners/opaimage/index/htm

The Basic Pilot Program may be accessed at http://uscis.gov/graphics/services/SAVE.htm

ICE has launched an interactive “Safe Harbor Center” at http://faq.ice.gov/cgi-bin/ice_faq.cfg/php/enduser/std_alp.php?p_sid=6IbfqOIi

We caution all employers to carefully consider whether to sign up for electronic verification programs before starting them.  Once you are signed up, de-registering could be problematic. 

Increased ICE Worksite Enforcement

On August 9, 2007, the Department of Homeland Security issued a Fact Sheet entitled "Worksite Enforcement" which highlights recent ICE enforcement efforts targeted at businesses that employ undocumented immigrants. (Copy attached)

Julie Myers, Assistant Secretary for Homeland Security at ICE, stated that these “worksite enforcement actions target a key component of the illicit support structure that enables illegal immigration to flourish” and vowed that ICE “will continue to bring all of our authorities to bear in this fight using criminal charges, asset seizures, administrative arrests and deportations.”

The Fact Sheet highlights more than a dozen businesses targeted in workforce enforcement operations, ranging from temporary employment agencies, to textile, construction and food processing plants.  The operations varied, ranging from 12 contract workers at the Camp Joseph T. Robinson Army National Guard Base in North Little Rock, Arkansas, being placed in removal proceedings, to the arrest of 160 individuals charged with being unlawfully present in the U.S. at a Fresh Del Monte Produce plant in Portland, Oregon.  In the Del Monte case, grand jury indictments were also returned against 10 former workers charged with possession of fraudulent immigration documents.

Additional information on ICE worksite enforcement is available at http://www.ice.gov/pi/news/factsheets/worksite.htm