Global Immigration Blog : Immigration Lawyers & Attorneys : Jackson Lewis Law Firm : Labor Certification, Adjustment of Status

Co-Author: Maggie Murphy

The DOL Administrative Review Board has decided that employers are responsible for paying wages to H-1B foreign nationals who—but for a delay in the Social Security Account enumeration and card issuance process—would be actively employed. The same rule likely will be applied to other nonimmigrant workers who experience delays in Social Security number processing.

The Board held the employer must pay the H-1B worker for her nonproductive activity during the time she was awaiting the delivery of her Social Security Card. Under 20 C.F.R. § 655.731(c)(7)(i), if the H-1B nonimmigrant is not performing work due to the employer’s requirement that she obtain a Social Security Card before commencing employment with the employer, the employer must pay the employee at the required wage for the occupation listed on the Labor Condition Application filed with the DOL. USDOL & Wirth v. University of Miami Sch. of Med., ARB Case No. 10-090, 10-093, ALJ Case No. 2009-LCA-026 (Dec. 20, 2011).

A Social Security Number is not required for employment verification (I-9) purposes, but many employers require it for payroll processing. H-1B employees are authorized to work upon lawful admission to the United States. Accordingly, to the extent that an employer requires a Social Security Number as part of payroll processing, it must be prepared to pay the employee if it elects to delay employment during the SSA enumeration process.

The DOL likely will apply this rule to other nonimmigrant categories, including the L-1, H-3, E-3, and O-1. Therefore, employers should consider practices that will allow these authorized workers to start employment while waiting for Social Security enumeration. Such practices include setting up a temporary payroll profile with a “dummy” number and updating the profile once the number is issued.

An employer that participates in E-Verify must verify its employees’ Social Security Numbers through the free federal program. Thus, such an employer needs the employee Social Security Numbers and should set a projected start date that allows enough time for Social Security processing.

Whatever the case, employers must now be mindful of payment responsibilities for foreign nationals sponsored to work for the employer in the U.S. Once the approved start date hits, so does the wage/payment requirement, requiring that employers who insist on Social Security Numbers from all employees take a more active role in tracking and advising employees how and when they should apply.
 

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Employers navigating the I-9 employment eligibility verification process for new hires are confronted with a gauntlet of confusing rules, standards, and exceptions to the rules that some have opined are deliberately designed to make the innocuous looking one-page form a magnet for errors. Such cynics cite the year-over-year increases in civil fines being levied by ICE on employers through the continuing national workplace audit campaign the agency is prosecuting as proof of a fatally flawed system.

While the social security number is an optional field on the form according to the latest M-274 Handbook for Employers, the forms will be considered deficient and employers may be subject to fines based on a variety of issues which may appear to be “harmless error” from a common sense perspective, including among others: missing date, signature on the wrong line, notation to “see attached” copies of identification, correct ID data listed in under the wrong list, etc. Employers who have been through the experience of an I-9 audit have become sensitive to the precision required in completing the forms fully, and ICE’s audit and public relations campaigns have conditioned employers to err on the side of completeness in this arena for fear of being heavily fined.

Unfortunately, rules governing I-9 form practice and fines do not focus exclusively on the issue of incompleteness. Employers who fail to walk the legal tightrope of “just enough, but not too much” risk incurring the wrath of the Department of Justice’s Civil Rights Division Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC). The DOJ has announced that a public employer has been sued for alleged Immigration–Related Employment Discrimination for too zealously checking the work authorization of foreign employees. The employer allegedly discriminated by dictating what documents a foreign employee must present at hire, contrary to the I-9 rule which mandates that the employee be given a choice of what to present. Similarly, lawful permanent residents were allegedly required to bring in updated work authorization documents when their current “green card” documents expired or they would risk termination, contrary to I-9 work authorization re-verification rules.

The bottom line for employers is that in their management of I-9 employment eligibility verification, keeping the “Goldilocks principle” in mind and treating all employees the same regardless of their citizenship or national origin is key to avoiding liability with either ICE on the one hand, or OSC on the other hand.

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The Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (responsible for enforcing the anti-discrimination provisions of the Immigration and Nationality Act) has released a Fact Patterns Flyer.

The flyer provides examples of recent OSC prosecutions that resulted in employer-paid settlements to the Department of Justice for what the agency describes as common immigration-status-based discriminatory conduct by businesses.

Presumably, the flyer was prepared to educate employers about the risks associated with faulty Form I-9-related compliance practices and provide employees with a list of conduct that may be the basis of a complaint and agency investigation. The list includes the following:

• When an employer demands specific documents from a new hire;
• When an employer asks certain employees for more documents than are necessary to complete the Form I-9;
• When an employer rejects work authorization documents from non-U.S. citizens, but accepts the same documents from U.S. citizens;
• When an employer demands that lawful permanent residents present new “green cards” after the original document presented expires, but does not demand the same of U.S. citizens;
• When an employer refuses to hire workers who sound or appear foreign;
• When an employer hires non-immigrant visa holders, but rejects U.S. citizens and other work-authorized individuals who apply for work;
• When an employer hires undocumented workers instead of work-authorized individuals;
• When an employer separates work-authorized workers for lying about their prior undocumented status, but does not fire other workers for lying about different aspects of their background;
• When an employer separates employees for whom it receives an E-Verify “tentative nonconfirmation” (TNC) notification on a selective basis;
• When an employer uses E-Verify to pre-screen applicants on a selective basis; and
• When an employer pre-screens all applicants, but does not hire applicants for whom it receives no-match notifications or E-Verify TNC notices.

Although the list is non-exhaustive, these real-world examples have resulted from successful investigations by DOJ and its standards and definitions for what constitutes violations of the law.

Employers may find the Fact Patterns Flyer helpful in assessing their conduct. Employers also may consider the following:

(1) Injured parties need only file a discrimination charge to begin the administrative adjudication process—there is no independent review of the veracity of the allegations completed by the agency prior to its demand to the employer for an informal response to the allegations. In other words, credibility of the initial claim is presumed.

(2) OSC also will initiate an independent investigation based upon information developed during the individual charge investigation, and will commonly liaise with other government agencies to support the charge that the employer’s compliance failures evidence a pattern or practice of discriminatory activity. Essentially, an employer must prepare for the possibility of a systemic investigation that flows from a single, individual claim by an allegedly-aggrieved employee.

Understanding the complexities of the verification process is only the beginning. An employer also must be able to point to standard policies and consistent operating procedures that may serve as a backstop to government allegations of company-wide discriminatory activity. Unless an employer may deflect OSC’s interest in examining its verification practices in every location of the organization with the support of sister-enforcement-agencies, like Immigration and Customs Enforcement, CIS Fraud Detection, Department of Labor Wage & Hour, and IRS auditors, the consequences of the investigation may jeopardize the business well beyond the one employee.
 

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The Department of Justice has announced a record anti-discrimination settlement agreement with Farmland Foods, Inc. involving allegations that the company engaged in a pattern or practice of discrimination during the I-9 process. According to the DOJ, Farmland, a major U.S. producer of pork products, allegedly required newly hired non-U.S. citizens and some foreign-born U.S. citizens at its Monmouth, Illinois plant to present specific and sometimes extra work-authorization documents not required by law. Farmland has agreed to pay $290,400, the highest civil penalty in an anti-discrimination settlement. It also has agreed to train its human resources personnel about proper I-9 procedure and provide periodic reports to the DOJ for monitoring purposes.
 

According to the lawsuit filed on behalf of the Office of Special Counsel for Immigration Related Unfair Employment Practices (OSC), Farmland extended a conditional offer of employment to a naturalized U.S. citizen on December 2, 2009 and asked the new hire to complete the I-9 form. At that time, the individual presented a driver’s license (List B) and an unrestricted Social Security card (List C). After the employee started orientation, Farmland (through its agent) submitted the individual to E-Verify and received a tentative nonconfirmation (TNC). Rather than having the employee go through the TNC process (which would have involved talking to a DHS representative or visiting SSA – actions not involving the employer), Farmland allegedly asked the employee to bring in her naturalization certificate and/or other documents to prove her citizenship. While it’s not clear from the complaint how the employer reacted, eventually the OCS was contacted.
 

According to the complaint, Farmland routinely has engaged in a pattern of discriminatory documentary practices in its Monmouth plant since at least December 1, 2009. Between December 1, 2009 and January 26, 2011, the OSC alleged that Farmland required non-U.S. citizens to specifically produce a “List A” document issued by the Department of Homeland Security in addition to other documents. Employees attesting to be a “lawful permanent resident” for example, would be required to produce an I-551 permanent resident card and employees attesting to be “an alien authorized to work” would be required to produce an I-766 employment authorization document. Meanwhile, the large majority of U.S. citizens hired were allowed to produce varied List B and List C documents without restriction.
 

According to the OSC, Farmland:
• Required 100% of non-U.S. citizens to produce a “List A”, while only 4.9% of U.S. citizens were required to do so.
• Required 100% of non-U.S. citizens to produce identity and work authorization documents in addition to a “List A” documents during the Form I-9 Employment Eligibility Verification process, while only 1.6% of U.S. citizens were required to do so.
• Required 88% of the non-U.S. citizen employees to produce a List A, B, and C document, while only 0.8% of the U.S. citizen employees were required to do so.
 

Interestingly, for the non-U.S. citizen employees, Farmland only recorded the List A document on section 2 of the Form I-9 and attached photocopies of the additional documents to the Form I-9. Thus, on the surface, this would not have appeared to be over-documentation. Regardless, Farmland’s demand for specific or excessive documents to establish work authorization clearly violated the anti-discrimination provision of the Immigration and Nationality Act (INA).
 

The lesson learned from this case is that it is not enough to have the I-9 boxes completed correctly. The process behind the I-9 is complex and should be examined. Over-documentation is a serious issue that the OSC will pursue. Experienced compliance counsel should be consulted to ensure your organization is in compliance with all applicable regulations.
 

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The United States Immigration and Customs Enforcement (“ICE”) has announced that, as at July 21, 2011, it has fined 14 employers in New England this year for hiring illegal aliens in violation of law.

The companies were the subject of an investigation and audit of their Form I-9 documents, which is part of ICE’s ongoing worksite enforcement strategy. Following investigation, the companies, located from Massachusetts to Maine, were subjected to fines ranging from $23,000 to more than $100,000.

Nationally, ICE has been pursuing a worksite enforcement strategy, launched in 2009, to reduce demand for illegal employment of aliens and to protect employment opportunities for America’s legal workforce. This strategy has focused on auditing and investigating employers suspected of hiring workers later determined to be unauthorized for employment in the United States.

As quoted by Bruce M. Foucart, Special Agent in charge of ICE in Boston:

“These settlements serve as a reminder to employers that ICE will continue to hold them accountable for hiring and maintaining a legal and compliant workforce. We encourage companies to take the employment verification process seriously.”

ICE’s continued focus on worksite enforcement warrants employers’ ensuring their compliance with the employment verification process. Employers must complete and retain a Form I-9 for every individual hired for employment in the United States. Each employee is required to provide the employer with proof that the employee is authorized to work in the United States. Failure to properly complete the employment verification process can lead, at a minimum, to fines or, depending on the seriousness of any uncovered violations, a criminal investigation of an employer by ICE.

The Global Immigration practice of Jackson Lewis routinely advises our clients in navigating the employment verification process.
 

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As more and more states pass legislation mandating use of E-Verify, a federal E-Verify mandate seems inevitable. Recently, Representative Lamar Smith introduced the first attempt at such a federal mandate, the Legal Workforce Act.

The Legal Workforce Act would preempt existing state E-Verify laws and repeal the current paper Form I-9 system, replacing it with a completely electronic system. It would be phased in as follows:

• Employers with 10,000 or more employees: 6 months after enactment
• Employers with 500-9,999 employees: 12 months after enactment
• Employers with 20-499 employees: 18 months after enactment
• Employers with 1-19 employees: 24 months after enactment

The bill also includes special provisions for agricultural employers, phasing those employers in after 36 months and treating seasonal workers as existing employees, as opposed to new hires. As with the current rules, the bill would grant employers safe harbor from prosecution for employing unauthorized workers if they used the E-Verify program in good faith.

In introducing the bill, Representative Smith cited high unemployment, voter support and strong bi-partisan support. He is quoted as saying, “With unemployment at 9%, jobs are scarce. Despite record unemployment, seven million people work in the U.S. illegally. These jobs should go to legal workers." It remains to be seen whether Smith will get the bi-partisan support needed to pass the bill. Presently, it still sits in committee.
 

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                                                           Author: Nicola Ai Ling Prall

With employers’ increased use of electronic Forms I-9 and more states mandating use of E-Verify, a number of electronic I-9 and E-Verify vendors are offering services to help employers with these demands. However, difficulty can arise for employers if the ownership of data and the terms of that ownership are not clear, as illustrated by a recent lawwsuit.

Furthermore, some background screening providers, applicant tracking system providers, and all-in-one human resources solutions providers are reselling the electronic I-9 and E-Verify functions to third-party vendors, which can further complicate issues regarding data ownership and access.

While these services are useful and can streamline the on-boarding process, employers must be diligent to ensure that they maintain access to all I-9 and E-Verify data.

If audited by the Immigration and Customs Enforcement (ICE) (see our earlier post, ICE to Issue 1,000 Audit Notices to Employers, Focus on Infrastructure Safety), employers have only three days to gather the requested information for ICE. Therefore, it is critical that employers can access their data quickly. When choosing an electronic I-9 provider or a system with a reseller arrangement, employers should ask:

1. Who owns the I-9 and / or E-Verify data?
2. Where is the data stored?
3. Is the data commingled with other employers’ data?
4. Can the employer request a backup of the I-9 and E-Verify data at any time?
5. What is the cost of a data backup?
6. In what format will the backup be provided?
7. What happens to the employer’s data if the vendor changes its resellers?
8. What happens to the employer’s data if the vendor or reseller goes out of business?

There are specific electronic I-9 retention system regulations that can affect every aspect of a vendor’s system and the employer’s relationship with the vendor. It is important that employers speak with experienced counsel before entering into an electronic I-9 or E-Verify vendor relationship.
 

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The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) office has announced it will notify 1,000 employers across the country the agency will audit their hiring records to determine compliance with employment eligibility verification laws. These Notices of Inspection (NOIs) often request not only I-9 documentation, but payroll records, copies of immigration filings, copies of Social Security Administration communications requesting corrections, information on independent contractors, and related information. All documentation normally must be produced within three business days of the employer’s receiving the Notice.

ICE says the employers targeted are those whose businesses have a key role in keeping national infrastructure safe. The 17 sectors singled out for the enforcement action include those associated with agriculture and food, financial services, commercial nuclear reactors, drinking water and water treatment, postal and shipping, healthcare, and transportation. According to ICE, “The inspections will touch on employers of all sizes and in every state in the nation, with an emphasis on businesses related to critical infrastructure and key resources.”

In February, ICE had investigated 1,000 employers. This latest action continues the upward trend of yearly audits, bring the number of I-9 audits for fiscal year 2011 to more than 2,300. The agency conducted 2,196 audits in fiscal year 2010 and 1,444 in fiscal year 2009. For more information on how to get your company prepared for such an audit, see our I-9 compliance tips.

Fraud Detection Unit

In addition to the I-9 inspections, U.S. Citizenship and Immigration Services, another arm of the DHS, has again stepped up its efforts to investigate and combat fraudulent use of immigration programs. The Fraud Detection Unit first started making random site visits in late 2009. A visit usually involves an unannounced drop-in by a USCIS agent or contractor who reviews the employment conditions of a nonimmigrant worker, usually H-1B employees. The agent will request to speak to the employee, review the workplace, and review payroll and related records. For a more detailed description of a site visit, see H-1B Employers: Prepare for Site Visits From USCIS.

What Employers Can Do

These government crackdowns on employers represent a key part of DHS’s immigration enforcement policy, emphasizing employer audits rather than the high-profile workplace raids of the past. It appears employers will continue to be targeted.  If you receive a Notice of Inspection, immediately contact your counsel. The window for response is short. It is critical that employers review thoroughly the documents gathered in response to the Notice and that the documents be well-organized and presented in the best light possible.

Employers who have not received a Notice this time around should take the opportunity to review and audit their records internally. For more information on how our Global Immigration Practice Group can assist you, see ourI-9 Compliance Brochure.
 

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Written by Nicola A. Prall

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OCAHO Reduces Fines Sought by ICE after I-9 Audit

Author: Nicola Ai Ling Prall, Esquire

With news of record-breaking immigration enforcement results and the new Employment Compliance Inspection Center, pressure on employers regarding Form I-9 compliance may seem unrelenting. However, a recently published decision by the Office of the Chief Administrative Hearing Officer appears to give employers greater negotiating power, a glimmer of good news. 

The Office of the Chief Administrative Hearing Officer has jurisdiction over cases involving allegations of knowingly hiring, recruiting or referring for a fee or continued employment of unauthorized aliens, and failure to comply with employment verification requirement (completion of Form I-9), in violation of section 274A of the INA (Immigration and Nationality Act). If an investigation by ICE (Immigration and Customs Enforcement) results in a finding of a violation of section 274A, ICE may issue a Notice of Intent to Fine (NIF) to the employer. The NIF details the violations and the fines for those violations. The employer must either pay the fine or request a hearing. 

 USA v. Snack Attack Deli, Inc., 10 OCAHO no. 1137, arose from an ICE inspection conducted in early 2009 on Snack Attack Deli, a Subway franchisee located in Fayetteville, North Carolina. ICE alleged that Snack Attack had committed 108 violations of section 274A. In Count 1, the agency alleged that Snack Attack hired 11 named individuals from 2006 through February 2009 and failed to ensure that those individuals properly completed section 1 of form I-9 or failed itself to properly complete section 2 or section 3 of the form. Count II alleged that Snack Attack hired 97 named individuals between 2006 and February 2009 for whom it failed to prepare forms I-9 at all. 

ICE sought $1,028.50 for each violation, a total fine of $111,078.00. These fines were close to the maximum that ICE could have assessed under the law. Furthermore, a fine of that size would have crippled Snack Attack’s business and likely lead to the loss of jobs for some of its employees. None of the violations involved allegations of knowingly hiring or employing unauthorized aliens. The entire fine was based on Snack Attack’s alleged failure to comply with employment verification requirements by improperly completing or failing to complete Form I-9.

While the administrative law judge (ALJ) granted the agency’s motion for summary judgment as to liability, the ALJ found the fines were disproportionate to the size of the business and that ICE did not properly consider the fact that Snack Attack had no unauthorized workers and no previous violations. Furthermore, the ALJ took into consideration non-statutory factors “such as the depressed economy and the difficulty any displaced employee would have in finding other work.” Therefore, instead of $1,028.50 per violation, the ALJ reduced the fine to $300 for each violation of Count 1 and $250 for each violation of Count II, a total fine of $27,150.00.

This decision is useful for employers facing potential fines from ICE investigations – especially as economic depression and high unemployment continue.

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The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) office has told 1,000 employers across the country the agency will audit their hiring records to determine compliance with employment eligibility verification laws. These Notices of Inspection (NOIs) often request not only I-9 documentation, but payroll records, copies of immigration filings, copies of Social Security Administration communications requesting corrections, information on independent contractors, and related information. All documentation normally must be produced within three business days of the employer’s receiving the Notice.

ICE takes the position that such inspections determine whether or not businesses are violating U.S. employment laws by hiring illegal workers and will discourage such hiring practices in the future. According to a statement issue by ICE, the audits are not aimed a particular targets, but “touch on employers of all sizes and in every stated in the nation – no one industry is being targeted nor is any one industry immune from scrutiny.” The agency has not released the names and locations of the businesses targeted in this round of audits. ICE has acknowledged that the 1,000 businesses receiving NOIs were selected by local Special Agents in Charge (SAC) offices.

This latest effort reflects ICE’s focus on increasing I-9 audits as part of a worksite enforcement strategy emphasizing criminal prosecution of employers who knowingly hire individuals without authorization to work in the U.S. In fiscal year 2010, ICE conducted 2,196 I-9 audits (compared with 1,444 in fiscal year 2009), which included at least two major I-9 audit initiatives: one in July 2009 targeting 654 businesses and another in November 2009 targeting 1,000 companies associated with critical infrastructure. The I-9 audit initiative has the support of Department of Homeland Security Secretary Janet Napolitano.

If you receive a Notice of Inspection, immediately contact your counsel. The window for response is short, but, in some cases, experienced practitioners may be able to assist in obtaining an extension of the document production period. It is critical that employers review thoroughly the documents gathered in response to the Notice, that it be well-organized and presented in the best light possible.

Employers who have not received a Notice this time around should take the opportunity to review and audit their records internally. Compliance efforts now will help avert potential fines that can range from $110 - $16,000 per violation, depending on the offense. For more information on how the Global Immigration Practice Group can assist you, see our I-9 Compliance Brochure.
 

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Approximately $50 million in financial sanctions for worksite enforcement violations were imposed by the federal government in fiscal year (FY) 2010, according to Department of Homeland Security (DHS) Secretary Janet Napolitano and U.S. Immigration and Customs Enforcement (ICE) Director John Morton. The agencies announced record-breaking immigration enforcement results that reflect the aggressive stance taken under the Obama Administration to combat the hiring of unauthorized workers. While the government continues to detain and remove unauthorized individuals, Secretary Napolitano emphasized that the Obama Administration also would continue to pressure employers, holding them accountable through I-9 audits, fines and debarment from immigration programs.

ICE has achieved the following in FY 2010:
• Removing 392,000 individuals, including 195,000 convicted criminal foreign nationals
• Bringing criminal charges against a record-breaking 180 owners, employers, managers and/or supervisors — up from 114 in FY 2009 and 135 in FY 2008
• Conducting more than 2,200 I-9 audits — up from a little more than 1,400 in FY 2009
• Imposition of approximately $50 million in financial sanctions
• Debarment of 97 businesses and 49 individuals in FY 2010, up from 30 businesses and 53 individuals in FY 2009

This is a reminder to employers to question and review their I-9 practices and policies. While ICE states that it conducts I-9 investigations of employers based on credible leads (such as complaints from disgruntled employees, tips from the public or cases having national security or public safety implications), they also reserve the right to initiate audits for other reasons, such as referrals from other government agencies that have investigated an employer in an unrelated matter or even randomly targeting industries generally known to have high reports of undocumented workers, such as in construction, hospitality, retail and food production.

To forestall any negative government actions in this area, an employer would be wise to conduct its own internal I-9 audit or engage legal counsel to do so. Start with an overall audit plan and implementation of the plan, and follow through on corrections of identified errors and maintenance of a thorough I-9 compliance policy. For more information on how the Global Immigration Group can assist you, see our I-9 Compliance Brochure. Preparation is key.
 

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Immigration and Customs Enforcement (ICE) has served more than 500 Notices of Inspection (NOIs) to U.S. companies over the past week. According to the agency, allegations that employers are hiring unauthorized workers and paying employees unfair wages or otherwise exploiting workers set off this latest round of inspection notices.

With this move, ICE furthers its stated objective of executing all measures necessary to ensure that lawful employment of all workers is maintained in the workplace, a central objective of the Obama Administration. No doubt this will be followed by additional rounds of mass NOIs. Consequently, this is a reminder to employers of the critical need to ensure I-9 form compliance. Among other activities, employers should take precautions to ensure that they are diligently conducting the employment eligibility verification review process at the time of hire, maintaining documentation, and ensuring proper review on an ongoing basis.

As part of an employer’s diligence, focus should be given to completing internal audits immediately to identify and correct any errors. Upon receipt of a NOI, an employer has only three (3) business days to provide I-9 Forms to ICE (an extension is available under limited circumstances). Therefore, the NOI should not be the primary trigger for a company’s I-9 concerns. A proactive review would provide an opportunity to confirm accurate record keeping, as well as allow an employer to target areas that need procedural development and internal training. The Global Immigration Group can provide assistance in navigating these processes.

An employer can address the retention of I-9s in a number of ways, but the approach selected should be uniform, consistent and, most importantly, in compliance with government rules and regulations. Developing an action plan should be paramount on a company’s to-do list. Take the opportunity to reflect on and assess what your next step should be. We will continue to monitor this and related developments.
 

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In April 2005 when Public Law 108-390 went into effect allowing for employers to sign and retain I-9 employment eligibility verification forms electronically, employers and immigration practitioners alike may have been justifiably confused as provisional guidance from the Department of Homeland Security’s ICE (Immigration Customs and Enforcement) division on their web page http://www.ice.gov/pi/news/factsheets/i-9employment.htm was introduced. ICE guided employers to “interpret the law”(!), and advised employers to “note that there is no single government-wide electronic signature or record-keeping standard. However, some federal agencies have provided electronic record-keeping standards for their own transactions with the public…[which] may serve as a helpful reference for employers until DHS issues regulations to govern the storage of Forms I-9.” For over a year, employers and their counsel had to guess about what standards would comply with the law and fit within the enforcement agency’s vague guidance. Despite tangible benefits in terms of paperwork reduction, many employers opted to wait for something more concrete before investing in an electronic I-9 program and institutional training.

In June 2006, ICE issued an interim rule which provisionally codified standards that employers wishing to use electronic I-9 completion and storage systems should observe. Building on their initial guidance, most of the standards outlined in the provisional rule reflected IRS electronic recordkeeping guidelines, and covered criteria such as accessibility, accuracy, security, and quality of data being captured and systems being used for electronic storage. http://edocket.access.gpo.gov/2006/E6-9283.htm.

Some four years later, an advance copy of final rules modifying 8 CFR 274a.2 has been issued (http://www.justice.gov/eoir/vll/fedreg/2010_2011/fr22jul10.pdf), so presumably interested parties have had sufficient time to comment on the interim rules prior to finalization, unlike some notorious instances of agency “legislation by decree” in which policy “clarifications” were later deemed to have unlawfully omitted the normal public comment period. http://www.jacksonlewis.com/legalupdates/article.cfm?aid=1579.

The final version of the rule contains standards which will be familiar to employers who currently use electronic I-9 systems and the vendors who market such systems. As before, the final rule “permits employers to complete, sign, scan, and store the Form I-9 electronically, as long as certain performance standards… are met.” Changes in the final rule are relatively minor, amounting in most instances to clarifications:
-employers must complete a Form I-9 within three business (not calendar) days;
-employers may use paper, electronic systems, or a combination of paper and electronic systems;
-employers may change electronic storage systems as long as the systems meet the performance requirements of the regulations;
-employers need not retain audit trails of each time a Form I-9 is electronically viewed, but only when the Form I-9 is created, completed, updated, modified, altered, or corrected; and
-employers may provide or transmit a confirmation of a Form I-9 transaction, but are not required to do so unless the employee requests a copy.

This rule does not include any changes to I-9 form content or acceptable documents, but an acceptable document change did occur in 2008 (73 FR 76505) and 2009 (72 FR 2838 - correction). Therefore, while there was nothing dramatic or surprising in the final rule, employers can now rest assured that electronic I-9 completion and storage standards appear to be final.
 

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New legislation that would expand penalties for employers who knowingly hire unauthorized workers has been introduced in the House of Representatives. The “Criminal Penalties for Unauthorized Employment Act of 2010” (H.R. 4627), introduced by Representative Frank Kratovil (D-Md.), would significantly increase imprisonment terms, criminal fines, and civil fines that can be levied against an employer or individual with “hiring authority.” A person with “hiring authority” is anyone who has “direct authority to make a decision to hire or to recruit or refer for a fee, an individual for employment.”

Currently, criminal penalties for knowingly hiring unauthorized workers apply only if a “pattern or practice” can be shown. An entity or individual may be fined $3,000 and an individual may be imprisoned for up to six months for the entire “pattern or practice.”

The proposed legislation would impose criminal penalties for each unauthorized worker, and criminal penalties would increase with each subsequent conviction:
- For a first offense, a fine of $2,500 and/or imprisonment of up to 1 year
- For a second offense, a fine of $5,000 and/or imprisonment for up to 2 years
- For a third or subsequent offense, a fine of $10,000 and/or imprisonment for up to 5 years

The bill also would increase the civil penalties assessed:
- For a first offense, a fine ranging from $1,000 – 5,000 (currently $250 – $1,000)
- For a second offense, a fine ranging from $5,000 – 10,000 (currently $2,000 – $5,000)
- For a third or subsequent offense, a fine ranging from $10,000 – 20,000 (currently $3,000 – $10,000)
 

Stay tuned as Jackson Lewis will continue to follow this legislation and update readers through this blog.

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Due to the dramatic increase in ICE worksite enforcement actions in 2009, employers are taking steps ensure their I-9 compliance, and utilizing such tools as internal audits, training, and implementation of I-9 software. I-9 software can often help to minimize the disorganization and clerical errors that can result in an absolute nightmare upon receipt of an ICE inspection notice. In response to growing employers’ compliance efforts, software companies are rushing “feature-rich” I-9 software packages to market. And while employers tend to scrutinize the user features available when selecting I-9 software, many are overlooking a vital feature – data security.

Once I-9 software has been implemented by your company, proper data security is required to protect your employees’ stored personal data. Minnesota state agencies using a Texas-based I-9 software provider with inadequate data security recently discovered that the personal data of nearly 500 employees may have been made accessible through the software provider’s web site, displaying employee names, dates of birth, hire dates, and Social Security numbers. This is a wake-up call to many employers that data security is a feature that cannot be overlooked when selecting I-9 software.
Employers should always ask their software provider to outline the software’s data security features. Compare them to features offered by other providers. Generally, you want to ensure that all user accounts are properly password protected, a sophisticated encryption method is used to encrypt the data, and if the data is stored remotely by the software provider, measures are taken to ensure that data is protected from external hackers and that the data is properly isolated to ensure that it is not erroneously accessed by another user.
I-9 software is an excellent tool to use in the quest for I-9 compliance, and a fear of a potential data compromise should not prevent you from implementation. Most software packages have adequate data security features, and a few have substantial ones. However, employers should be aware of the importance of data security when shopping for an I-9 software package, and should move data security to the top of their list of questions for their potential providers.
 

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