Employers are barred from hiring people not legally authorized to work in the U.S. But they're also forbidden from discriminating against noncitizen job-seekers. This article describes the procedures and best practices they should follow to avoid getting caught in the middle.

With immigration reform on center stage, employers face increased scrutiny of their hiring practices in an area traditionally overlooked or not carefully monitored by human resources officials or employment law practitioners: immigration-related employment discrimination. Employers can't ignore their obligations to ensure that workers are authorized to work in the U.S.

The key to avoid getting caught in the squeeze? Employers and practitioners who counsel them must carefully follow the Form I-9 requirements when verifying the employment eligibility of new hires, making sure not to impose more demanding requirements on noncitizens. They should also avoid overreacting when agencies notify them about mismatched documents for immigrant workers.

A recent case underscores the high stakes for employers. In early 2013, a large hospitality company reached an agreement with the Department of Justice (DOJ) to resolve allegations the company violated the anti-discrimination provisions of the Immigration and Nationality Act (INA).¹ The DOJ concluded that the employer treated non-U.S. citizens differently from U.S. citizens in completing Form I-9, required by the INA's employment eligibility verification processes.² The company required noncitizens to produce specific documents but did not make similar requests of U.S. citizens.³

Under the terms of the agreement, the company agreed to pay $250,000 in civil penalties, to compensate victims for lost wages, to undergo DOJ training on the anti-discrimination provisions of the INA, and to subject itself to DOJ and United States Citizenship and Immigration Services (USCIS) monitoring of its employment eligibility verification practices for three years.⁴

This article describes the requirements of Form I-9, warns about the surprising dangers of using some of the various systems (e.g., E-Verify) to verify the accuracy and authenticity of employees' Social Security numbers, and describes best practices for employers to use when they discover a mismatch in employee documents.

Form I-9 requirements for employers

The ban on hiring undocumented workers. The Immigration Reform and Control Act of 1986 (IRCA) bars employers from hiring individuals, including undocumented aliens, who are not legally entitled to work in the United States. Employers must verify that individuals are eligible to work by obtaining an Employment Eligibility Verification Form, known as Form I-9, and inspecting the required supporting documents within three days of the employee's hire date.

Employers must retain the Form I-9 for three years after hiring the worker or for one year after termination, whichever is longer.⁵ The law contains no exceptions for temporary or part-time employment, or for foreign employers that pay U.S.-based employees directly.⁶

Employees must provide employers with documents that show (1) identity and (2) employment eligibility. Employees must also complete Form I-9 attesting under penalty of perjury that they are either U.S. nationals or aliens authorized to work in the United States. Employers may not knowingly hire or continue to employ a person who is not authorized to work in the United States.⁷ Under USCIS regulations, "knowingly" means either "actual knowledge" or "constructive knowledge."⁸

The ban on discriminating based on origin, citizenship. The Immigration and Nationality Act ("INA"), which the IRCA amended, prohibits employers from discriminating in hiring, firing, recruiting, or referring based on national origin or citizenship status.⁹ The anti-discrimination provisions apply to all employers with four or more employees.¹⁰

Employers who violate these provisions may be subject to civil penalties, back pay awards, hiring orders, the imposition of injunctive relief to end discriminatory practices, and attorney fee awards.¹¹ The USCIS, which is part of the Department of Homeland Security (DHS), enforces the law, while the Department of Justice Civil Rights Division's Office of Special Counsel for Immigration-Related Unfair Employment Practices enforces its anti-discrimination provisions.

Getting the required documents. Most employers and practitioners are familiar with the general I-9 requirements, but a few of them bear mentioning as a reminder. First, an employer cannot employ an individual who fails to produce the required documents, or a receipt for replacement documents (in the case of lost, stolen or destroyed documents), within three business days of the date employment begins.¹² Again, however, employers must apply these rules uniformly to all employees, and not just to those who do not appear to be citizens. Employers who do not enforce the rules for all new hires not only violate the IRCA, but also risk discrimination charges under the INA.

In no event should an employer allow a new employee to begin working until the Form I-9 is complete. Employers must terminate any employee immediately upon receiving actual knowledge that the employee is not authorized to work, such as if the employee admits to having submitted false documents for I-9 purposes.

Section 2 contains three lists of acceptable documents: "List A" documents, which include U.S. passports and prove both identity and employment eligibility; "List B" documents, including state-issued driver's licenses, which prove only identity; and "List C" documents, such as a Social Security card, which prove only employment eligibility.¹³

To properly complete section 2, the employer must view either one List A document or one each from List B and List C.¹⁴ Employers must accept any unexpired documents from the "Lists of Acceptable Documents" presented by the employee that reasonably appear on their face to be genuine and to relate to the person presenting them.¹⁵ The employer cannot demand to see any specific document. Notably, no provision of the IRCA or the Internal Revenue Code requires an employee to have a Social Security number at the time of hire (though an employee without one must apply within seven days).¹⁶

When employees must appear. To complete Form I-9, the employee must physically appear before the employer.¹⁷ An employer must receive original documents to complete Section 2 of the Form, not copies (though certified copies of a birth certificate are acceptable).¹⁸ In situations where it is not possible for a new employee to physically appear at the employer's offices to complete the Form I-9, employers may designate agents to carry out their IRCA responsibilities.¹⁹ Agents may include notaries public, accountants, attorneys, personnel officers, or onsite managers. Employers should never accept documents faxed or e-mailed by a new employee, or allow an employee to complete Section 2.

When documents have an expiration date. If the employee presents a document with a date of expiration, the employer will need to re-verify the employee's continued eligibility on the date of expiration (and no later).²⁰ The best practice is to notify employees approximately 90 and 30 days in advance of the expiration of the need to provide an updated version of the expiring document.

Without incurring discrimination liability under the INA/IRCA or Title VII, the employer cannot demand to re-verify any other documents.²¹ For instance, if an employee presents a driver's license from List B and an expiring document from List C, the employer can only re-verify the List C document and must not re-verify the List B document. Any re-verification should be noted in Section 3 of the Form I-9. An employer who has previously re-verified documents and entered them in Section 3 of the original Form I-9 can use a new Form I-9 for subsequent re-verifications, but must only complete Section 3 on the new form, not Section 2, and should keep the new Form with the original. Certain special rules may apply for rehired employees.

Employers must keep forms on file. Employers do not submit Form I-9 to the USCIS or any other agency. Instead, employers must keep the form for three years from the date of hire or one year from the date the employee terminates employment, whichever is later.²² Several agencies may at any time request access to review the forms with three days' notice, or without notice with a proper warrant, and the employer must supply them.²³

Although not part of the Form I-9 process, agencies such as USCIS and SSA may notify employers about questions those agencies have about wage reporting or information provided by the employee on Form I-9. Employers in those situations must follow special procedures to avoid violating IRCA's provisions and to reduce the risk of any-discrimination liability under IRCA or Title VII.

Verifying Social Security numbers or other documents: the risks

Employers generally have no obligation to use E-Verify, the Social Security Number Verification Service (SSNVS), or any other third-party background check service to verify Social Security Numbers. For reasons described below, verification is fraught with danger. Employers' only obligations under the IRCA and other related laws are to complete Form I-9 as required.²⁴

The Social Security Number Verification Service (SSNVS). Indeed, SSNVS cannot be used to verify SSNs for employment eligibility.²⁵ SSA will verify SSNs and names solely to ensure that the records of current or former employees are correct for the purpose of completing IRS Form W-2.²⁶ It is illegal to use SSNVS to verify SSNs of potential new hires. Using SSNVS to verify a new employee's employment eligibility may subject employers, and their employees who use SSNVS, to civil and criminal penalties.²⁷

The proper and timely completion of Form I-9 for each employee provides an employer with an affirmative defense to an allegation that it knowingly hired an unauthorized alien.²⁸ This defense is only a rebuttable presumption. The IRCA does not protect employers that have actual knowledge that a person lacks authorization (such as employers that knowingly accept forged documents).²⁹

E-Verify. The U.S. Citizenship and Immigration Services website describes E-Verify as "an Internet-based system that compares information from an employee's Form I-9, Employment Eligibility Verification, to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility" (www.uscis.gov/e-verify). Assuming that a company is not a federal contractor, does not expect to become one, and does not operate in one of the states that require the use of E-Verify, then the use of E-Verify is strictly optional.³⁰

In Illinois, participation in E-Verify is voluntary, though current state law discourages its use.³¹ The state's original law barred Illinois companies from using E-Verify (PA 95-138), though a federal court blocked it.³² Nonetheless, the current law carries penalties for privacy and discrimination violations that occur due to an employer's use of E-Verify.³³

The biggest drawback to voluntary adoption of E-Verify for practitioners and employers is that it does not replace the Form I-9 procedure.³⁴ Instead, it adds another significant burden to the process. An employer's use of the E-Verify system may be free of charge, but implementing and overseeing the proper use of E-Verify, particularly in large organizations, requires extensive training, auditing, and daily oversight to ensure that employees do not to use it at the wrong time, for the wrong purpose, or on the wrong people.

Moreover, E-Verify can increase a company's legal liability, and make even minor errors easier to detect. Because the government stores E-Verify participants' hiring data, agencies can review it for hiring errors that previously might not have been detected.

For example, a manager's failure to complete the Form I-9 and initiate an E-Verify inquiry until the fourth or fifth day after employment begins (a common error) would trigger a paperwork violation and the possibility of a civil fine.³⁵ The odds that the Department of Homeland Security would discover or audit such an innocent mistake under the traditional Form I-9 process is relatively low compared with the odds of easy, automatic detection under E-Verify.

Another issue for E-Verify users, particularly in Illinois and California, is the potential for unintended privacy and immigration discrimination violations. An employee can trigger significant civil liability for a company by misusing the E-Verify system. Under both federal and state laws, employers using E-Verify must safeguard data from both the Form I-9 and the E-Verify databases.³⁶ The more sensitive data a company retains, the more it must scrupulously protect it.

When there's a mismatch: best practices for avoiding discrimination

Employers and practitioners may learn (sometimes directly from the employee) that a current employee's Social Security number does not match the name on the Social Security account, or may receive notification about documentation problems from an SSNVS inquiry or other government sources.³⁷ As the SSNVS Handbook warns, mismatched documents say nothing about the employee's immigration status or work authorization, and "is not a basis, in and of itself, for you to take any adverse action against an employee, such as laying off, suspending, firing or discriminating" against him or her.³⁸ They cannot be ignored, however.

Employers that learn of a mismatch can observe the following best practices for each employee within a reasonable period after learning about it. These practices help rebut a charge that an employer has constructive knowledge that an individual is working illegally. Under the current regulations, timing is critical in these steps to avoid any accusation that you have ignored knowledge that an employee is not eligible for employment.³⁹

Step 1 - Check your own records. Check the employee's personnel records immediately to see whether the discrepancy was caused by a typographic transcription, or similar clerical error in the records or in communications to the SSA. If there is a clerical error, you must 1) correct the records, 2) inform the SSA, 3) verify with the SSA that the discrepancy has been resolved, 4) make a record of the manner, date, and time of the verification (this includes documentation of telephone conversations, correspondence, computer-generated printouts, e-mails, and Social Security Number Verification System screen shots), and 5) store the record with the employee's Form I-9.

If there are no clerical errors, move on to Step 2 immediately. If an employee confirms that the records are incorrect, you should correct the records within 30 days if possible.

Step 2 - Verify your records with the employee. The appropriate procedure differs depending on whether or not your records are correct.

If your records are not correct -

• Notify the employee promptly (ordinarily within five business days after completing the internal records review) of the no-match problem and request that the employee confirm that your records are correct.⁴⁰

• If the employee confirms that your records are not correct, take the steps discussed in Step 1 above to correct the records and to inform the SSA as soon as possible, generally within 30 days.

If your records are correct -

• If the employee confirms that your records are correct, ask him or her to pursue and resolve the matter personally with the SSA within 90 days. Be sure to provide the employee with the completion deadline, and document your efforts. The employee may pursue the matter by contacting a local SSA office and providing the SSA with original documents or certified copies required by the SSA, such as documents that prove age, identity, citizenship or alien status, and other relevant documents, such as proof of a name change.

• Once the employee has contacted the SSA, he or she should inform you of any changes made by the SSA. Then, correct your records accordingly and resubmit the corrected data by following Step 1 above. If the employee does not resolve the discrepancy within 90 days (either by having you correct the mistaken records or by pursuing and resolving the matter with SSA), move to Step 3.

Step 3 - Reverify. If the employee does not resolve the discrepancy within 90 days, document this fact and complete a new Form I-9 for the employee just as you would for a new hire. Of course, you should not accept a document containing the questionable SSN for purposes of this employment verification.

If the employee cannot complete the new Form I-9 within three days, then you either must terminate him or her, since the IRCA prohibits employers from knowingly continuing to employ a person who is not authorized to work in the United States, or run the risk that you will be accused of knowingly continuing to do so.⁴¹

Conclusion

Practitioners should encourage employers to adopt a written immigration compliance policy and train all managers and staff on the importance of adhering to it. Employers should avoid "citizen only" or "permanent resident only" hiring policies. In most cases, it is illegal to require job applicants to have a particular immigration status. Most importantly, neither practitioners nor employers should ever ignore information relating to discrepancies between an employee's name and Social Security number.

The cardinal rule is to be consistent with all employees and new hires. Following the proper Form I-9 procedures and these best practices will help practitioners and employers minimize the risk of discrimination charges.

Doug Hass (dah@franczek.com) is a labor and employment law attorney with Franczek Radelet in Chicago and Associate Faculty at the College of Business and Professional Studies, Ashford University.

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1. U.S. Department of Justice, Justice Department Reaches Settlement with South Carolina Food Service Provider to Resolve Immigration-Related Unfair Employment Practices, (Jan. 7, 2013), http://www.justice.gov/opa/pr/2013/January/13-crt-026.html.
2. Id.
3. Id.
4. Id.
5. 8 C.F.R. § 274a.2(b)(2)(i)(A).
6. See § 274a.2(b)(1)(i).
7. See § 274a.10 (prescribing civil and criminal penalties).
8. § 274a.1(l)(1).
9. 8 U.S.C. § 1324b(a).
10. § 1324b(a)(2)(A).
11. § 1324b(g)-(h).
12. See 8 C.F.R. § 274a.2(b)(1)(ii)-(iii).
13. § 274a.2(b)(1)(v).
14. Id.
15. See § 274a.2(b)(1)(ii)(A), (v).
16. 26 C.F.R. § 31.6011(b)-2(a)(1)(ii) ("Employee account numbers").
17. See § 274a.2(b)(1)(i).
18. § 274a.2(b)(1)(v).
19. § 274a.2(b)(1)(ii).
20. § 274a.2(b)(1)(vii).
21. 8 U.S.C. § 1324b(a)(6) (INA/IRCA); 42 USC § 2000e(b) (Title VII).
22. § 274a.2(b)(2)(i)(A).
23. § 274a.2(b)(2)(ii).
24. See § 274a.2(b).
25. See SSA, Restrictions on Using SSNVS (last visited Apr. 8, 2013), http://www.ssa.gov/employer/ssnvrestrict.htm
26. Id.
27. See 20 C.F.R. § 401.45(b)(5).
28. 8 C.F.R. § 274a.4.
29. 8 U.S.C. § 1324a(a)(1)(A).
30. See 8 C.F.R. § 52.222-54 (requiring E-Verify only for federal contractors); Pub. L. No. 104-208, § 402(a), 110 Stat. 3009-656 (providing that "the Attorney General may not require any person or other entity to participate in" E-Verify).
31. See 820 ILCS 55/12.
32. United States v. Illinois, 92 Empl. Prac. Dec. P 43, 510, 2009 WL 662703 (C.D. Ill.).
33. 820 ILCS 55/15.
34. See 73 Fed. Reg. 67651-52 (2008) ("Participation in E-Verify does not exempt the employer from the responsibility to complete, retain, and make available for inspection Forms I-9 that relate to its employees. . . .").
35. 8 U.S.C.A. § 1324a(e)(4).
36. See, e.g., 77 Fed. Reg. 47419 (2012) (protection of E-Verify data under the federal Privacy Act); 820 ILCS 55/12.
37. SSA previously sent out "no-match" letters to employers, but has suspended the practice due to budgetary reasons. See SSA POMS NL 00901.050, https://secure.ssa.gov/poms.nsf/lnx/0900901050.
38. SSA SSNVS Handbook, What To Do if An SSN Fails to Verify, http://www.ssa.gov/employer/ssnvshandbk/failedSSN.htm; see also Department of Justice Office of the Special Counsel, Name and Social Security Number (SSN) "No-Matches" Information for Employers, http://www.justice.gov/crt/about/osc/pdf/publications/SSA/Employers.pdf ("employers should not "[a]ssume the no-match conveys information regarding the employee's immigration status or actual work authority" or "[u]se the receipt of a no-match notice alone as a basis to terminate, suspend or take other adverse action against the employee.")
39. These procedures were outlined in revised regulations that DHS promulgated in 2007 and later rescinded. 72 Fed. Reg. 45611 (Aug. 15, 2007 (amending 8 C.F.R. § 274a.1(2)). Neither the SSA nor any other governmental agency has provided specific guidance on how much time to give a worker to resolve the discrepancy or on what to do if the discrepancy cannot be resolved. The rescinded regulations allowed up to 90 days. However, for E-Verify purposes, SSA can put a tentative nonconfirmation of work authorization in place for up to 120 days, suggesting that this might be a reasonable period of time to resolve discrepancies in some circumstances.
40. The SSNVS has a sample notice that employers may use. SSA, Sample Letter Employers Can Give to Employees, http://www.ssa.gov/employer/sampleltr.doc (last visited Apr. 8, 2013).
41. New El Rey Sausage Co., Inc. v. INS, 925 F.2d 1153, 1157-58 & n.7 (9th Cir. 1991) (citing Mester Mfg. Co. v. INS, 879 F.2d 561, 567 (9th Cir. 1989)) ("While the hiring can be considered in good faith since the false nature of the documents was unknown, the continuing employment is done with the knowledge that the document is false."); accord Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 152 (2002) (an employer is compelled to discharge a worker upon discovery of the worker's undocumented status).