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The 109th Congress is considering sweeping changes to the Immigration Reform and Control Act (IRCA) of 1986, the law that requires employers to verify the employment eligibility and identity of all employees hired on or after Nov. 7, 1986. Although the proposals are aimed at preventing the unauthorized employment of undocumented aliens, if enacted, they will meaningfully encumber the hiring process for all U.S. employers. IRCA requires employers to review and verify documents presented by an employee to establish his or her employment eligibility and identity, and to retain a properly completed Form I-9 for three years from the date of hire or one year from the date of termination, whichever is later. Employers must accept the documents proffered by the employee, so long as these appear genuine and are among those listed on Form I-9. An employer currently is not required to verify the authenticity of the documents. An employer determined to have knowingly hired, recruited, referred for a fee or continued to employ an unauthorized alien may be subject to fines, capped at $11,000 for each unauthorized alien. Varying fines are levied against employers that fail to properly complete, retain and/or present Forms I-9 for inspection; request more or different documents than an employee has chosen to present from the lists on Form I-9; or forge, counterfeit, alter or falsely make any document. Criminal penalties are also prescribed for employers convicted of engaging in a pattern or practice of knowingly hiring or continuing to employ unauthorized workers, or knowingly committing document fraud with respect to eligibility-verification documents. Proposals would enlarge employer’s responsibilities The congressional proposals are unprecedented undertakings, both in terms of administrative implementation and the burden on employers. They require employers to participate in an electronic Employment Eligibility Verification System (EEVS) administered by the Department of Homeland Security (DHS). As envisioned, an employer would submit the name, date of birth, Social Security number and alien identification number for noncitizens to the EEVS within three working days after hire. The Social Security Administration (SSA) would confirm whether these match the information on file, while the DHS would confirm whether the name and alien identification number evidence employment-authorized status. If the information does not match, a tentative nonconfirmation will be issued. The employer must provide information about a nonconfirmation to the employee in writing. At that time, the employee may contest the finding or, if uncontested for 10 days, the employer must terminate the employee. An employer that chooses not to terminate may be subject to penalties for knowingly or with reckless disregard hiring an unauthorized alien. A key issue is that the proposals rely on an expansion of the existing Basic Pilot Program, an Internet-based verification system that has been marred with problems, including an inability to prevent identity fraud. See Government Accountability Office, “Weaknesses Hinder Employment Verification and Worksite Enforcement Efforts,” GAO-05-813 (2005), www.gao.gov/new.items/ d05813.pdf. See also U.S. Citizenship and Immigration Services (CIS), Report to Congress on the Basic Pilot Program (Washington June 2004), www.uscis.gov/ graphics/aboutus/repsstudies/piloteval/ BasicFINAL0704.pdf. According to a July 25 statement by DHS officials before the U.S. House of Representatives Government Reform Committee’s subcommittee on regulatory affairs, the Basic Pilot Program currently is used by only 10,000 of the nearly 7 million U.S. employers. According to the CIS report, the SSA was able to automatically verify the employment eligibility of fewer than 50% of work-authorized non-U.S. citizens. The system was able to immediately verify only 88% of records submitted by employees claiming to be U.S. citizens. See CIS, DHS, statement before the House Committee on Ways and Means on Impacts of Border Security and Immigration on Ways and Means Programs (July 26, 2006). The CIS report also confirmed that most of the nonconfirmations for U.S. citizens stem from errors in the databases, name changes or lack of timely updates to old data. The percentage of nonconfirmations is alarming. Under one congressional proposal, 120 million employees would need to be verified by 2012. A 10% error rate in EEVS verifications could result in 12 million people being denied employment for some period. By comparison, only 7.1 million Americans were unemployed as of August 2006. See U.S. Department of Labor, Bureau of Labor Statistics “The Employment Situation: August 2006″ (Sept. 1, 2006). The House bill, H.R. 4437, requires compliance with the EEVS for all employees within three to six years after enactment and caps fines for hiring or continuing to employ unauthorized aliens at $40,000 and/or imprisonment for no less than one year if found to have engaged in a pattern and practice of knowing unlawful hiring or failing to use the EEVS. See Border Protection, Antiterrorism, and Illegal Immigration Control Act of 2005, http://thomas.loc.gov/ cgi-bin/bdquery/z?d109:h.r.04437:. Few provisions in the House bill protect workers from discrimination and unjust termination stemming from inaccurate records in the SSA or DHS databases. The only relief available to such employees would be a claim under the Federal Tort Claims Act, a time-consuming and burdensome process. The Senate bill, S. 2611, requires compliance with EEVS with respect to new hires 18 months after the date that $400 million has been appropriated and made available to DHS (and for some employers, all hires as early as 180 days after). See Comprehensive Immigration Reform Act of 2006, http://thomas.loc.gov/cgi-bin/ bdquery/z?d109:SN2611:. The Senate bill caps fines for hiring or continuing to employ unauthorized aliens at $20,000. A pattern and practice of knowing unlawful hiring or failure to use EEVS subject an employer to a criminal penalty of no more than $20,000 for each unauthorized alien and/or imprisonment for no more than three years. The bill extends the retention period for Forms I-9 to five years from the date of hire or one year from the date of termination, whichever is later. It also requires employers to assist DHS with enforcement efforts by mandating that companies provide DHS with information about any employees with final nonconfirmations. The Senate bill, however, does include anti-discrimination protections and provides funding to educate employers and employees about anti-discrimination policies. It also includes due process protections allowing employees to challenge errors in the DHS and SSA databases, providing for an administrative and judicial review process, and permitting employees to seek compensation for lost wages due to agency error. In addition, the Senate bill includes provisions against misuse of information and identity theft, including making a felony any unauthorized use of EEVS data, e.g., pre-screening applicants for employment. Both the House and Senate bills envision increased data sharing among the Internal Revenue Service, DHS and the SSA; however, the IRS and SSA interpret � 6103 of the Internal Revenue Code, 26 U.S.C. 6103(i) et. seq., to bar release of confidential taxpayer information. This means that DHS cannot obtain tax returns and taxpayer-return information without an ex parte order by a federal district judge or magistrate judge. The IRS believes that such sharing would decrease tax collections and compliance, while others feel that it may result in fishing expeditions by federal agencies. Proposed DHS regulations pave the way On June 14, DHS proposed regulations setting forth guidance for employers upon receipt of no-match letters from the SSA (letters indicating that submitted Social Security numbers don’t match government data) or upon receipt of information from DHS concerning nonconforming documents submitted by employees during the I-9 process. See Safe-Harbor Procedures for Employers Who Receive a No-Match Letter, 71 Fed. Reg. 34281 (June 14, 2006). They expand employers’ obligations under the current law by imputing “constructive knowledge” of unlawful hiring to any employer that receives a no-match letter and fails to follow the outlined procedures. These ”safe harbor” procedures provide that the employer may attempt to resolve the no-match within 14 days, and, if it cannot resolve it based on the documents presented, may have the employee try to resolve the discrepancy within another 14 days by visiting a local SSA office. If the matter remains unresolved within 60 days of receipt of the no-match letter, the employer’s “safe harbor” exists only if it reverified the employee within 63 days of receipt of the letter, provided that the employer may not use any document containing the Social Security number or alien number noted in the no-match letter or any document without a photograph. Critics find it unreasonable to assume that the EEVS, built on the shaky foundations of the Basic Pilot Program, could be any more accurate. The EEVS, like its predecessor, cannot detect identity fraud and therefore will not prevent the employment of unauthorized workers. If enacted, the legislative and regulatory proposals will be a significant burden to employers, as they will have to train staff to use the Basic Pilot Program as well as implement procedures on how to resolve no-match and temporary nonconfirmation notices. Almost certainly, employers will need staff dedicated solely to ensuring EEVS compliance and safeguarding data from misuse. Erroneous nonconfirmations, delays in verification or ensuing terminations will require more expenditures, including the costs of recruitment, training and lost production time. Zlatko Hadzismajlovic is an associate in in the New York office of Newark, N.J.-based McCarter & English. He practices immigration and labor and employment law.

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