That a sophisticated All-American employer, Disneyland in California, was recently slapped with a $ 390,000 fine by the Immigration and Naturalization Service for paperwork violations should serve as a warning to all employers. Haphazard attention to the INS employment verification requirement (to which all employers in the country are subject) can lead to serious fines (one firm in Georgia was fined over a million dollars) and, in extreme cases, to jail terms.
The risk of being targeted by the INS recently increased significantly with the February 3, 1994 unveiling by Attorney General Janet Reno of a new 7 million plan to increase enforcement of U.S. immigration laws.
Under the Immigration Reform and Control Act of 1986 (“IRCA”), all employers are subject to penalties for knowingly hiring or continuing to employ aliens who are not authorized to work in this country. Pursuant to this mandate, all employers must verify that every person hired is either a U.S. citizen, permanent resident, or a foreign national with authorization to work in the U.S.
To meet IRCA’s employment verification requirements, the INS requires all employees to complete Form I-9, the Employment Eligibility Verification Form. Within three business days of commencing employment (or on the first day of employment if a job will last less than three days), the employee must present identity and employment eligibility documents. The employee is given the choice to present various documents (such as a social security card or driver’s license) from lists of “acceptable documents.” The employer may not require additional or different documents than the ones presented by the employee. The employer is then responsible for examining the documents to determine that they are genuine and relate to the specific employee.
Employers must keep I-9 Forms on file and available for INS inspection for the longer of three years or one year after employment is terminated for each employee. Copies of identity and employment eligibility documents are not required to be kept on file. If an employee has temporary employment authorization, a reverification of employment eligibility must be conducted prior to expiration of the employment authorization.
Concern by many members of Congress that employment verification requirements would lead employers to discriminate against U.S. workers who are “foreign” looking or sounding led to the inclusion of a key anti-discrimination provision in IRCA. Reverse discrimination against U.S. citizens is also prohibited. “Unfair immigration-related employment practices” such as refusing to hire a protected individual because of national origin or citizenship status or refusing to accept documents that are legally acceptable are prohibited. Generally speaking, employers may not use IRCA obligations as an excuse for discharging or not hiring a protected individual. The law does, however, provide an exemption from the anti-discrimination prohibition in cases when an employer gives preference to a U.S. citizen over an equally-qualified non-citizen. But such a preference might still violate Title VII of the 1964 Civil Rights Act and employers should be extremely cautious in such hiring practices.
Though fines as large as the one imposed on Disneyland are unusual, IRCA’s penalties can, nonetheless, be quite serious. The INS employs 1300 agents charged with spending a majority of their time on IRCA enforcement. In addition to complaint driven investigations, the INS randomly chooses to examine 2,500 businesses each year for IRCA violations. Fines range from 0 to ,000 per violation and up to six months imprisonment for knowingly hiring or employing aliens lacking work authorization. Paperwork violations, like those committed by Disneyland, are penalized by fines of between 0 and 00 per violation, with each mistake on an I-9 Form counting as a separate violation. Companies violating the anti-discrimination provision are subject to fines of up to ,000 per worker plus attorney’s fees.
The best way for an employer to avoid IRCA problems is to establish a meaningful I-9 audit system. Such a program should include at least the following elements:
- education of all personnel officials on the purpose of IRCA and how to comply with its requirements
- establishment of a scheduling system to automatically remind an employer when reverification of employment authorization is necessary
- conduct of a thorough, periodic review of all employee I-9 Forms or, for large companies, a review of a random sampling of I-9s.
I-9 audits should review and evaluate the employer’s current IRCA compliance procedures with respect to obtaining, completing and retaining I-9 Forms. If all I-9s are being reviewed, the I-9s should be compared to a tracking form listing all present and past employees to ensure that the verification process was never forgotten. Deficiencies in specific forms should be corrected and procedures enacted to ensure future compliance.
Finally, employers should pay special attention to I-9 issues in the settings of mergers and acquisitions. In cases where an acquiring company assumes successor liability, there is no requirement to complete new I-9s for employees of either company if the records of the acquired employer are maintained. Nevertheless, liability for the acquired company’s errors is assumed and the prudent acquiring firm should reverify each employee with a new I-9. Furthermore, the acquiring company should consider requesting indemnification from the acquired company for inherited IRCA-violations and should conduct an I-9 review as part of its normal due diligence. In cases where the acquiring company does not assume any of the acquired company’s liabilities, the acquiring company must get new I-9s. It should also review I-9s during due diligence and negotiate indemnification language as a precautionary measure in case successor liability is imposed by a court.
Disclaimer: This newsletter is provided as a public service and not intended to establish an attorney client relationship. Any reliance on information contained herein is taken at your own risk. The information provided in this article has not been updated since its original posting and you should not rely on it until you consult counsel to determine if the content is still valid. We keep older articles online because it helps in the understanding of the development of immigration law.